[Federal Register Volume 67, Number 212 (Friday, November 1, 2002)]
[Notices]
[Pages 66692-66693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-27808]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46727; File No. SR-CBOE-2002-44]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change by the Chicago Board Options Exchange, Incorporated To Amend Its 
Rules To Eliminate the ``Book Indicator''

October 25, 2002.
    On August 19, 2002, the Chicago Board Options Exchange, 
Incorporated (``CBOE'' or ``Exchange'') filed with the Securities and 
Exchange Commission (``Commission'' or ``SEC'') pursuant to section 
19(b)(1) of the Securities Exchange Act of 1934 (``Act'')\1\ and Rule 
19b-4 thereunder,\2\ a proposed rule change to amend its rules to 
eliminate the ``Book Indicator.''\3\ The proposed rule change was 
published for comment in the Federal Register on August 28, 2002.\4\ 
The Commission received no comments on the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ This indicator is affixed to the CBOE disseminated quotation 
when an order in the Exchange's book represents the best bid or 
offer on the Exchange.
    \4\ See Securities Exchange Act Release No. 46397 (August 21, 
2002), 67 FR 55443 (August 29, 2002).
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    The Commission has reviewed carefully the CBOE's proposed rule 
change and finds that the proposal is consistent with the requirements 
of the Act and the rules and regulations thereunder applicable to a 
national securities exchange,\5\ and with the requirements of section 
6(b).\6\ In particular, the Commission finds the

[[Page 66693]]

proposed is consistent with section 6(b)(5) \7\ of the Act in that it 
is designed to promote just and equitable principles of trade, to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and, in general, to protect 
investors and the public interest.
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    \5\ In approving this rule proposal, the Commission notes that 
it has also considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Commission notes that the Book Indicator was adopted as part of 
the CBOE's initiative to provide split-price Retail Automatic Execution 
System (``RAES'') executions for incoming customer orders when the 
prevailing best bid (offer) is generated by a existing customer order 
in the CBOE book.\8\ At the time split-price execution functionality 
was adopted, CBOE's disseminated quote did not display size. Thus, the 
Book Indicator served to alert a customer that a RAES eligible order 
might not be executed in its entirety at CBOE's displayed price, and 
that he might receive a split-price execution. Now that CBOE 
disseminates quotes with size, the Commission believes that the Book 
Indicator is no longer necessary. Therefore, the Commission believes 
that it is appropriate for the Exchange to eliminate the Book 
Indicator, and remove all references to the Book Indicator from the 
CBOE rules. The Commission believes that the proposed rule change will 
streamline and clarify the Exchange rules by eliminating reference to 
an indicator that no longer is necessary.
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    \8\ See Securities Exchange Act Release No. 43932 (February 6, 
2001), 66 FR 10332 (February 14, 2001).
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    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-CBOE-2002-44) is approved.
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    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Secretary.
[FR Doc. 02-27808 Filed 10-31-02; 8:45 am]
BILLING CODE 8010-01-P