[Federal Register Volume 67, Number 23 (Monday, February 4, 2002)]
[Notices]
[Pages 5137-5138]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-2557]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45336; File No. SR-CBOE-2002-04]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Board Options 
Exchange, Inc. To Extend Its Participation in the Interim Intermarket 
Linkage Program

January 25, 2002.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on January 17, 2002, the Chicago Board Options Exchange, Inc. (``CBOE'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the CBOE. The Exchange 
filed the proposed rule change pursuant to Section 19(b)(3)(A) of the 
Act,\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6). The CBOE requested that the 
Commission waive the rule's requirements of a 30-day operative delay 
and a five-day pre-filing notice.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The CBOE proposes to extend its participation in the interim 
intermarket linkage program to the earlier of January 31, 2003, or the 
complete implementation of the permanent intermarket linkage in the 
options market.\5\
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    \5\ The Commission approved the Plan for the Purpose of Creating 
and Operating an Intermarket Options Linkage (``Linkage Plan'') in 
July 2000. See Securities Exchange Act Release No. 43086 (July 28, 
2000), 65 FR 48023 (August 4, 2000).
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the CBOE included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The CBOE has prepared summaries, set forth in Sections 
A, B, and C below, of the most significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On January 30, 2001, the Commission approved a rule change by the 
CBOE proposing to implement certain aspects of an intermarket options 
linkage on an interim basis.\6\ The interim linkage was approved on a 
pilot basis until January 31, 2002. The Exchange now seeks to extend 
the interim linkage pilot until the earlier of: (a) January 31, 2003; 
or (b) the implementation of the ``full'' options linkage contemplated 
by the Linkage Plan.
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    \6\ See Securities Exchange Act Release No. 43904 (January 30, 
2001), 66 FR 9112 (February 6, 2001) (File No. SR-CBOE-00-58).
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    As the CBOE and the other options exchanges continue to work 
towards the full implementation of the Linkage Plan, the Exchange 
believes it would be beneficial to continue to operate the interim 
linkage. The CBOE notes that the interim linkage uses existing market 
infrastructure to route orders between market makers on the 
participating

[[Page 5138]]

exchanges. Thus, the CBOE believes continuing the operation of the 
interim linkage would have no adverse effect on the implementation 
progress of the full linkage. Moreover, the CBOE believes the full 
benefits of the interim linkage are yet to be fully realized because 
only recently have all of the options exchanges begun participating in 
the interim linkage. The CBOE believes that as the list of option 
classes trading under the interim linkage program expands, the program 
will benefit a greater number of investors until the implementation of 
the full linkage.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act,\7\ in general, and furthers the objectives of 
Section 6(b)(5),\8\ in particular, because it should promote just and 
equitable principles of trade, serve to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, protect investors and the public interest.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The CBOE does not believe that the proposed rule change will impose 
any burden on competition not necessary or appropriate in furtherance 
of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Because the foregoing proposed rule change does not (i) 
significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, if consistent with 
the protection of investors and the public interest; provided that the 
self-regulatory organization has provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least five 
days prior to the date of filing of the proposed rule change, or such 
shorter time as designated by the Commission, the proposed rule change 
has become effective pursuant to Section 19(b)(3)(A) of the Act \9\ and 
Rule 19b-4(f)(6) \10\ thereunder.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \11\ does not 
become operative prior to 30 days after the date of filing or such 
shorter time as the Commission may designate if such action is 
consistent with the protection of investors and the public interest. 
The CBOE has requested, in order to permit the uninterrupted operation 
of the interim linkage, that the Commission accelerate the 
implementation of the proposed rule change so that it may take effect 
prior to the 30 days specified in Rule 19b-4(f)(6)(iii).\12\ The 
Commission finds that the proposed rule change is consistent with the 
protection of investors and the public interest and, therefore, has 
determined to make the proposed rule change operative as of the date of 
this notice.
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
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    A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally 
requires that a self-regulatory organization give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change. However, Rule 19b-4(6)(iii) \14\ permits the Commission to 
designate a shorter time. The CBOE seeks to have the five-business-day 
pre-filing requirement waived with respect to the proposed rule change. 
The Commission has determined to waive the five-business-day pre-filing 
requirement.
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for inspection and copying in the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
CBOE. All submissions should refer to File Number SR-CBOE-2002-04 and 
should be submitted by February 25, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-2557 Filed 2-1-02; 8:45 am]
BILLING CODE 8010-01-P