[Federal Register Volume 68, Number 14 (Wednesday, January 22, 2003)]
[Notices]
[Pages 3071-3072]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-1346]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47188; File No. SR-CBOE-2003-01]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by The Chicago Board Options 
Exchange, Incorporated To Amend CBOE Rule 9.3A To Allow In-Firm 
Delivery of the Regulatory Element of Continuing Education

January 15, 2003.
    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 9, 2003, The Chicago Board Options Exchange, Incorporated 
(``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 
Exchange. The Exchange filed the proposal pursuant to Section 
19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(6) \4\ thereunder, 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 provided the Commission 
written notice of its intent to file the proposal on December 26, 
2002.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend CBOE Rule 9.3A, Continuing Education 
for Registered Persons, to permit the in-firm delivery of the 
Regulatory Element of Continuing Education by member organizations. 
Currently, this computer-based training is administered to registered 
persons by an outside vendor at its locations. The text of the proposed 
rule change is available at the CBOE and at the Commission.

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 its proposal and discussed any 
comments it received regarding the proposal. 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 aspects of such statements.

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

1. Purpose
    The CBOE proposes to permit member organization delivery of the 
Regulatory Element of the Continuing Education Program (``Program''). 
The Program is designed to keep industry participants up to date on 
products, services and rules, and is composed of a Regulatory Element 
and a Firm Element. The Regulatory Element is computer-based training 
that covers ethical, sales practice and regulatory matters, and 
requires that each registered person complete this training on the 
occurrence of their second registration anniversary date and every 
three years thereafter. A registered person who fails to complete the 
training will be deemed inactive, and may not conduct or be compensated 
for activities requiring registration. The Firm Element requires member 
and member organizations to provide to their registered employees 
having direct contact with customers ongoing training that is 
specifically tailored to their business.
    At the recommendation of the Securities Industry/Regulatory Council 
on Continuing Education (``Council''),\5\ the CBOE proposes to adopt 
amendments to CBOE Rule 9.3A to permit member organizations to 
administer the Regulatory Element of the Continuing Education Program 
to their registered persons by instituting firm programs acceptable to 
the Exchange. Currently, the Regulatory Element is administered only at 
vendor locations. The proposed rule requires that member organizations 
meet certain conditions for in-house delivery relating to the security 
of the training delivery environment. The proposed rule amendments set 
forth the delivery requirements as specified by the Council.
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    \5\ The Council is comprised of representatives from broker-
dealers and self-regulatory organizations whose duties include 
recommending and helping develop specific content and questions for 
the Regulatory Element, as well as minimum core curricula for the 
Firm Element. The Council has developed a model under which member 
organizations may deliver the computer-based training in-house.
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    The proposed rule change is substantially similar to rules of The 
American Stock Exchange LLC, The New York Stock Exchange, Inc., and the 
National Association of Securities Dealers, Inc.\6\
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    \6\ The proposed rule change is identifical in substance, and 
substantially similar in wording, to Amex Rule 341A(4), NYSE Rule 
345A, Interpretation /03, and NASD Rule 1120(a)(6).
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2. Statutory Basis
    The CBOE believes that 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) of the Act \8\ in particular, in that it is designed to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in facilitating transactions in 
securities, to prevent fraudulent and manipulative acts and practices, 
and to remove impediments to and perfect the mechanisms of a free and 
open market and a national market system. The Exchange also believes 
that the proposed rule change is consistent with Section 6(c)(3)(B) of 
the Act.\9\ Under that Section, it is the Exchange's responsibility to 
prescribe standards of training, experience and competence for persons 
associated with Exchange members and member organizations. The Exchange 
has proposed this rule change to establish an additional mechanism for 
the administration of the Regulatory Element of the Program, which will 
help to enable registered persons to satisfy their continuing education 
obligations.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ 15 U.S.C. 78f(c)(3)(B).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is 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

[[Page 3072]]

may designate, it has become effective pursuant to Section 19(b)(3)(A) 
of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\ 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.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal 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-2003-01 and should be 
submitted by February 12, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-1346 Filed 1-21-03; 8:45 am]
BILLING CODE 8010-01-P