[Federal Register Volume 68, Number 42 (Tuesday, March 4, 2003)]
[Notices]
[Pages 10287-10291]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-4953]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47393; File No. SR-CBOE-2002-40]


Self-Regulatory Organizations; Order Granting Accelerated 
Approval of a Proposed Rule Change and Amendment No. 1 and Notice of 
Filing and Order Granting Accelerated Approval of Amendment No. 2 
Thereto by the Chicago Board Options Exchange, Inc. Relating to Options 
on the CBOE Asian 25 Index and Options on the CBOE Euro 25 Index

February 24, 2003.

I. Introduction

    On July 22, 2003, the Chicago Board Options Exchange, Inc. 
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission''), 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 provide for the listing and 
trading of options on the CBOE Euro 25 Index and the CBOE Asian 25 
Index, both broad-based indexes. On January 13, 2003, CBOE filed 
Amendment No. 1 to the proposed rule change.\3\ Notice of the proposed 
rule change, as amended, appeared in the Federal Register on February 
5, 2003.\4\ The Commission received no comments on the proposed rule 
change. On February 19, 2003, CBOE filed Amendment No. 2 to the 
proposed rule change and requested accelerated effectiveness of the 
proposed rule change.\5\ This order approves the proposed rule change, 
as amended, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from James Flynn, Legal Division, CBOE, to Nancy 
Sanow, Assistant Director, Division of Market Regulation 
(``Division''), Commission, dated January 10, 2003 (``Amendment No. 
1'') (replacing the original filing in its entirety). Amendment No. 
1, among other things: (1) Clarified the initial and maintenance 
criteria for the underlying component securities of the indices, 
including further detail on the component securities that are ADRs 
and not subject to comprehensive surveillance agreements; (2) 
clarified that options on both indices will be A.M. settled; (3) 
provided more recent market capitalization and weighting figures; 
and (4) specified that CBOE's surveillance procedures are adequate 
to monitor the trading of these products.
    \4\ See Securities Exchange Act Release No. 47287 (January 30, 
2003), 68 FR 5942.
    \5\ See letter from James Flynn, Legal Division, CBOE, to Nancy 
Sanow, Assistant Director, Division, Commission, dated February 18, 
2003 (``Amendment No. 2''). In Amendment No. 2, CBOE requests 
accelerated effectiveness of the proposed rule change to begin 
listing and trading options on the CBOE Euro 25 and CBOE Asian 25 
Indexes.
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II. Description of the Proposed Rule Change

    CBOE proposes to list and trade cash-settled, European-style stock 
index options on the CBOE Euro 25 Index and the CBOE Asian 25 Index, 
both broad-based indexes. The CBOE Euro 25 Index and the CBOE Asian 25 
Index are capitalization-weighted indexes of twenty-five (25) American 
Depository Receipts (``ADR''), New York Registered Shares (``NYS''), or 
NYSE Global Shares [reg] (``NGS''), which are traded on the New York 
Stock Exchange, Inc. (``NYSE''), the American Stock Exchange LLC 
(``AMEX''), or the NASDAQ.

A. Index Design

    The CBOE Euro 25 Index and the CBOE Asian 25 Index have each been 
designed to measure the performance of large market capitalization 
companies in their respective regions.\6\ Options on

[[Page 10288]]

both indexes shall be A.M. settled. The component securities included 
in each index must have a minimum market capitalization of $250 million 
and a trading volume of at least 500,000 shares on the NYSE, NASDAQ, or 
AMEX in each of the previous six months to be included in the index.\7\
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    \6\ The Exchange will make an updated list of the components 
underlying each index available to the public on the internet by 
accessing the following URL: http://www.cboe.com/optprod/index/indexoptions.asp.
    \7\ In the case of depository receipts, the market 
capitalization is determined based on the shares outstanding in the 
``home'' market and the price in U.S. Dollars of the ADRs, NYSs, and 
NGSs.
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    Unless otherwise specified herein, both indexes shall satisfy the 
following general initial and maintenance criteria. (1) At least 75% of 
the index, in terms of market capitalization weighting, must meet 
CBOE's listing criteria for equity options as set forth in CBOE Rule 
5.3. (2) Any non-U.S. component security (common stock or ADR) that is 
not subject to a comprehensive surveillance agreement shall not in the 
aggregate represent more than 20% weight of the index's aggregate 
market capitalization, unless those non-U.S. components satisfy the 
alternative criteria under Interpretation and Policy .03 to Rule 5.3, 
as further discussed below. (3) No single component security will 
represent more than 30% of the weight of the index. (4) Finally, the 
five highest weighted component security, in the aggregate, shall not 
account for more than 60% of the total weight of the index.
    CBOE represents that it will review each index quarterly following 
the expiration of the respective index option contract to ensure that 
the above criteria are satisfied, and to make quarterly share changes 
as appropriate. CBOE believes that the CBOE Euro 25 Index satisfies the 
index criteria provided above.\8\ In addition, CBOE believes that the 
CBOE Asian 25 Index satisfies the index criteria noted above.\9\
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    \8\ Specifically, CBOE has represented the following as of 
December 20, 2002: (1) 23 of the 25 securities in the CBOE Euro 25 
Index meet CBOE's listing criteria for equity options as set forth 
in CBOE Rule 5.3. This represents 92.59% of the index by market 
capitalization weight and 92% by number. (2) 23 of the 24 ADR or NYS 
components that underlie the index are subject to comprehensive 
surveillance agreements. (3) No single component represents greater 
than 30% of the aggregate weight of the CBOE Euro 25 Index. (4) 
Finally, the five highest weighted component securities in the 
aggregate do not account for more than 60% of the weight of the 
Index.
    \9\ Specifically, CBOE has represented the following as of 
December 20, 2002: (1) 18 of the 25 components in the CBOE Asia 25 
Index meet CBOE's listing criteria for equity options as set forth 
in CBOE Rule 5.3. This represents 77.73% of the index by market 
capitalization weight and 72% by number. (2) 13 of the 25 
components, representing 68.71% of the index by market 
capitalization weight, in the CBOE Asian 25 Index are either subject 
to comprehensive surveillance agreements or are common stocks that 
are not required to have comprehensive surveillance agreements. CBOE 
also notes that the Commission has specified in the past that a non-
U.S. security need not be considered in calculating the 20% 
threshold if at least 50% of the worldwide trading volume in that 
particular security occurs within the U.S. market. See CBOE Mexico 
Index filing, Securities Exchange Act Release No. 34241 (June 22, 
1994), 59 FR 33557 (June 29, 1994) (SR-CBOE-94-18). CBOE notes that 
this is consistent with Interpretation and Policy .03(ii) to CBOE 
Rule 5.3. Thus, CBOE plans to apply Interpretation and Policy .03 to 
CBOE Rule 5.3 to any non-U.S. component that exceeds the 20% 
threshold for non-U.S. components that are not subject to 
comprehensive surveillance sharing agreements.
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B. Calculation

    According to CBOE, the methodology used to calculate the value of 
the indices is similar to the methodology used to calculate the value 
of other well-known broad-based indices.\10\ The daily calculation of 
each index is computed by dividing the total market value of the 
companies in the respective Index by the index divisor. The divisor is 
adjusted periodically to maintain consistent measurement of the index. 
The values of each Index will be calculated by CBOE and disseminated at 
15-second intervals during regular CBOE trading hours to market 
information vendors via Options Price Reporting Authority.
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    \10\ CBOE noted that the indices base date is January 2, 2002, 
when the respective index values were set to 100. On April 16, 2002, 
the CBOE Euro 25 Index had a closing value of 95.99 and the CBOE 
Asian 25 Index had a closing value of 95.64.
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C. Index Option Trading

    In addition to regular Index options, CBOE proposes to provide for 
the listing of long-term index option series (``LEAPS' [reg]'') in 
accordance with CBOE Rule 24.9.
    For options on each index, strike prices will be set to bracket the 
respective index in 2\1/2\ point increments for strikes below 200 and 5 
point increments above 200. The minimum tick size for series trading 
below $3 will be 0.05 and for series trading above $3 the minimum tick 
will be 0.10. The trading hours for options on both indexes will be 
from 8:30 a.m. to 3:02 p.m. Chicago time.\11\
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    \11\ Exhibits F and G to proposed rule change present proposed 
contract specifications for CBOE Euro 25 Index options and CBOE 
Asian 25 Index options.
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D. Maintenance

    Both the CBOE Euro 25 Index and the CBOE Asian 25 Index will be 
monitored and maintained by CBOE. The CBOE will make all necessary 
adjustments to the indexes to reflect component additions and 
deletions, share changes, stock splits, stock dividends (other than an 
ordinary cash dividend), and stock price adjustments due to 
restructuring, mergers, or spin-offs involving the underlying 
components. CBOE represented that over time the number of component 
securities in the Index may change, but at no time will the number of 
underlying components drop to less than twenty. In the event of a 
component replacement, the divisor will be adjusted accordingly to 
provide continuity in index values.
    Absent prior Commission approval, the component securities in 
either index will not exceed 40 nor be lower than 20 and shall satisfy 
the criteria as provided above. If the Index fails at any time to 
satisfy the maintenance criteria, CBOE will immediately notify the 
Commission of that fact and will not open for trading any additional 
series of options on the Index unless such failure is determined by the 
Exchange not to be significant and the Commission concurs in that 
determination, or unless the continued listing of options on each 
respective Index has been approved by the Commission under Section 
19(b)(2) of the Exchange Act.

E. Surveillance

    CBOE will use the same surveillance procedures currently utilized 
for each of the Exchange's other index options to monitor trading in 
options and LEAPS. For surveillance purposes, CBOE will make all 
reasonable efforts to monitor the trading activity and other pertinent 
information relating to the underlying components. CBOE represents that 
its surveillance procedures are adequate to monitor trading of these 
products.

F. Exercise and Settlement

    The proposed options on the Index will expire on the Saturday 
following the third Friday of the expiration month. The exercise 
settlement value of the Index at option expiration will be calculated 
by CBOE based on the opening prices of the component securities on the 
business day prior to expiration. If a component security fails to open 
for trading, the last available price on the security will be used in 
the calculation of the index, as is done for currently listed indices.

G. Position Limits

    CBOE proposes to establish position limits for options on the CBOE 
Euro 25 Index and the CBOE Asian 25 Index at 50,000 contracts on either 
side of the market, and no more than 30,000 of such contracts may be in 
the series in the nearest expiration month. These limits are roughly 
equivalent to the limits applicable to options on other

[[Page 10289]]

broad-based indices under CBOE Rule 24.4(a).\12\
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    \12\ Specifically, CBOE Rule 24.4(a) imposes a standard position 
limit of 50,000 contracts on the same side of the market for CBOE's 
Mexico 30 Index and CBOE's Germany 25 Index.
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H. Exchange Rules Applicable

    Except as modified herein, the Rules in Chapter XXIV will be 
applicable to both CBOE Euro 25 Index options and CBOE Asian 25 Index 
options. Index option contracts based on both the CBOE Euro 25 Index 
and the CBOE Asian 25 Index will be subject to the position limit 
requirements of CBOE Rule 24.4(a). Additionally, CBOE affirms that it 
possesses the necessary systems capacity to support a new series that 
would result from the introduction of both CBOE Euro 25 Index options 
and CBOE Asian 25 Index options. CBOE has also been informed that OPRA 
has the capacity to support such new series.

III. Discussion

    After careful review, the Commission finds that the proposed rule 
change, as amended, is consistent with the requirements of Section 
6(b)(5) of the Act,\13\ and the rules and regulations thereunder 
applicable to a national securities exchange.\14\ Specifically, the 
Commission finds that the listing and trading of options on the Euro 25 
Index and Asian 25 Index will permit investors to participate in the 
price movements of large market capitalization companies in their 
respective regions on which the indices are based. The Commission also 
believes that the listing and trading of options on the Euro 25 Index 
and Asian 25 Index will allow investors holding positions in some or 
all of the securities underlying the Indexes to hedge the risks 
associated with their portfolios. Accordingly, the Commission believes 
that the Indexes will provide investors with an important trading and 
hedging mechanism that should reflect accurately the overall movement 
of highly market capitalized European Union and Asian equity 
securities. By broadening the hedging and investment opportunities of 
investors, the Commission believes that the trading of these index 
options will serve to protect investors, promote the public interest, 
and contribute to the maintenance of fair and orderly markets.\15\ 
Nevertheless, the trading of options on the Euro 25 Index and Asian 25 
Index raises several issues related to the design and structure of the 
Indexes, customer protection, surveillance, and market impact. The 
Commission believes, however, that the CBOE has adequately addressed 
these issues for the reasons discussed below.
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    \13\ 15 U.S.C. 78f(b)(5).
    \14\ In approving this rule, 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).
    \15\ Pursuant to Section 6(b)(5) of the Act, the Commission must 
predicate approval of any new securities product upon a finding that 
the introduction of such product is in the public interest. Such a 
finding would be difficult with respect to a product that served no 
hedging or other economic function because any benefits that might 
be derived by market participants likely would be outweighed by the 
potential for manipulation, diminished public confidence in the 
integrity of the markets, and other valid regulatory concerns. In 
this regard, the trading of listed Index options will provide 
investors with a hedging vehicle that should reflect the overall 
market of securities representing a segment of the U.S. securities 
market.
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A. Index Design and Structure

    The Commission finds that it is appropriate and consistent with the 
Act to classify the Index as broad-based, and therefore to permit 
CBOE's rules applicable to the trading of broad-based index options to 
apply to these Index options. First, both the Euro 25 Index and Asian 
25 Index consists of 25 actively traded equity securities. Second, the 
Euro 25 Index and Asian 25 Index each consist of 25 of the most highly 
capitalized securities and ADRs in their respective regions. For 
example, CBOE represented in the proposing release that on December 20, 
2002, the market capitalization of the individual securities in the 
Euro 25 Index ranged from a high of $97.208 billion to a low of $5.37 
billion, with a mean value of $30.326 billion. The market 
capitalization of the individual securities in the Asian 25 Index 
ranged from a high of $49.140 billion to a low of $382.722 million, 
with a mean value of $10.696 billion. Third, CBOE's maintenance 
criteria require that at least 75% of each Index, in terms of market 
capitalization, must meet the listing criteria for equity options set 
forth in CBOE Rule 5.3, the minimum market capitalization of component 
securities is $250 million, and component securities must have a 
trading volume of 500,000 shares in each of the previous six months. 
The Commission believes that CBOE's maintenance criteria will help 
ensure that the Indexes continue to be comprised of component 
securities that are highly capitalized and actively traded. Fourth, 
CBOE's maintenance criteria require that no single component security 
will represent more than 30% of the weight of the index. The Commission 
believes that this will help to ensure that the index maintains its 
broad representative sample of securities in the Euro 25 Index and 
Asian 25 Index and that no single or small group of securities dominate 
the Indexes.
    The Commission also believes that the general broad diversification 
of the Indexes' component securities, as well as their high 
capitalization and trading activity, minimize the potential for 
manipulation of the Indexes. First, as discussed above, the Euro 25 
Index and Asian 25 Index represent a broad cross-section of highly-
capitalized securities, with no single industry group or component 
security dominating each Index. Second, the securities underlying each 
Index are relatively actively traded. Third, the Commission believes 
that the Index continues to represent securities with the highest 
capitalization and trading volume. In addition, the CBOE has proposed 
position and exercise limits for the Indexes that are consistent with 
other broad-based index options.

B. Customer Protection

    The Commission believes that a regulatory system designed to 
protect public customers must be in place before the trading of 
sophisticated financial instruments, such as the Euro 25 and Asian 25 
Index options (including full-value and reduced-value Index LEAPS), can 
commence on a national securities exchange. The Commission notes that 
the trading of standardized exchange-traded options occurs in an 
environment that is designed to ensure, among other things, that: (1) 
The special risks of options are disclosed to public customers; (2) 
only investors capable of evaluating and bearing the risk of options 
trading are engaged in such trading; and (3) special compliance 
procedures are applicable to options accounts. Accordingly, because the 
index options and index LEAPS will be subject to the same regulatory 
regime as the other standardized options traded on the CBOE, the 
Commission believes that adequate safeguards are in place to ensure the 
protection of investors in Euro 25 and Asian 25 Index options and Index 
LEAPS.\16\
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    \16\ In addition, CBOE has represented that it and the Options 
Price Reporting Authority (``OPRA'') have the necessary systems 
capacity to support these new series of options that would result 
from the introduction of Index options and Index LEAPS. See letter 
from Joe Corrigan, Executive Director, OPRA, to John Hiatt, CBOE, 
dated July 11, 2002.
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C. Surveillance

    In evaluating derivative instruments, the Commission, consistent 
with the protection of investors, considers the degree to which the 
derivative instrument is susceptible to manipulation. The ability to 
obtain information necessary to detect and

[[Page 10290]]

deter market manipulation and other trading abuses is a critical factor 
in the Commission's evaluation. It is for this reason that it is 
important that the Commission determine that there is an adequate 
mechanism in place to provide for the exchange of information between 
the market trading the derivative product and the market on which the 
securities underlying the derivative product are traded. Such 
mechanisms enable officials to surveil trading in both the derivative 
product and the underlying securities. For foreign stocks index 
derivative products, such mechanisms are especially important for the 
relevant foreign and domestic exchanges to facilitate the collection of 
necessary regulatory, surveillance and other information.
    As a general matter, the Commission believes that comprehensive 
surveillance sharing agreements between the relevant foreign and 
domestic exchanges are important where an index derivative product 
comprised of foreign securities is to be traded in the United 
States.\17\ In absence of comprehensive surveillance sharing agreements 
between the foreign and domestic exchanges, the Commission has relied 
in the past on surveillance sharing arrangements between the relevant 
regulators. In the context of ADRs, the Commission believes that, in 
most cases, the relevant underlying equity market is the primary market 
on which the security underlying the ADR trades. This is because, in 
most cases, the market for the security underlying the ADR generally is 
larger in comparison to the ADR market, both in terms of share volume 
and the value of trading. Because of the additional leverage provided 
by options on an ADR, the Commission generally believes that having a 
comprehensive surveillance sharing agreement in place between the 
foreign and domestic exchanges will ensure the integrity of the market.
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    \17\ The Commission believes that a comprehensive surveillance 
sharing agreement should provide the parties thereto with the 
ability to obtain information necessary to detect and deter market 
manipulation and other trading abuses. Consequently, the Commission 
generally requires that such agreements require that the parties 
provide each other, upon request, information about market trading 
activity, clearing activity, and the identity of the purchasers and 
sellers of securities underlying the derivative product.
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    Under CBOE's current proposal, however, the Commission believes 
that it is appropriate to permit the listing and trading of options on 
an ADR without the existence of a comprehensive surveillance sharing 
agreement with the foreign market where the underlying security trades, 
as long as the U.S. market for the underlying ADRs is at least as large 
as the market for the underlying foreign security. Specifically, the 
proposed listing standards require that any non-U.S. component security 
(common stock or ADR) that is not subject to a comprehensive 
surveillance sharing agreement shall not in the aggregate represent 
more than 20% of the weight of each Index's market capitalization, 
unless those non-U.S. components satisfy the alternative criteria under 
Interpretation and Policy .03 to CBOE Rule 5.3.\18\
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    \18\ Specifically, the Commission notes that: (1) As provided in 
Interpretation and Policy .03(ii) to CBOE Rule 5.3, an individual 
ADR without a comprehensive surveillance sharing agreement will 
satisfy CBOE's listing criteria if over 50% of the combined 
worldwide trading volume in the ADR occurs in the U.S. ADR market 
for the previous three months from date of selection; or (2) as 
provided in Interpretation and Policy .03(iii) to CBOE Rule 5.3, an 
individual ADR without a comprehensive surveillance sharing 
agreement will satisfy CBOE's listing criteria if: (a) At least 20% 
of the worldwide trading volume in that foreign security occurs 
within the U.S. market and a market for which CBOE has a 
comprehensive surveillance agreement; (b) the average daily trading 
volume of the ADR over the past 3 months is 100,000 shares or more; 
and, (c) the trading volume is at least 60,000 shares per day in 
U.S. markets on a majority of trading days during the past months.
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    According to the CBOE, 23 of the 24 ADR or NYS component securities 
of the Euro 25 Index are subject to comprehensive surveillance sharing 
agreements. Further, 13 of the 25 component securities of the Asian 25 
Index are either subject to comprehensive surveillance sharing 
agreements, or are common stocks. The ADR components of the Asian 25 
Index that are not subject to comprehensive surveillance agreements 
satisfy the alternative criteria in Interpretation and Policy .03 of 
CBOE Rule 5.3. In addition, 21 of the 25 component securities or 
approximately 89% of the aggregate index market capitalization of the 
Asian 25 Index do satisfy CBOE's acceptable listing standards. The 
Commission believes that CBOE's standards will ensure that the relevant 
pricing market for the options on ADRs is the U.S. ADR market rather 
than the market where the security underlying the ADR trades. In these 
cases, the Commission believes that the U.S. ADR market is the 
instrumental market for purposes of deterring and detecting potential 
manipulation or other abusive trading strategies in conjunction with 
transactions in the overlying ADR options market. The CBOE represented 
that it will use the same surveillance procedures currently utilized 
for each of the Exchange's other index options to monitor trading in 
options and LEAPS, and that its surveillance procedures are adequate to 
monitor the trading of these products.

D. Market Impact

    The Commission believes that the listing and trading of Euro 25 and 
Asian 25 Index options on the CBOE will not adversely affect the 
underlying securities markets. First, as described above, both Indexes 
are broad-based and comprised of 25 securities with no one component or 
industry group dominating the Index. Second, as noted above, the 
component securities contained in the Indexes all have large market 
capitalizations and are actively traded. Third, existing CBOE index 
options rules and surveillance procedures will apply to Euro 25 and 
Asian 25 Index options. Fourth, the position limits of 50,000 contracts 
on either side of the market, with no more than 30,000 of such 
contracts in a series in the nearest month expiration month, will serve 
to minimize potential manipulation and market impact concerns. Fifth, 
the risk to investors of contra-party non-performance will be minimized 
because the Index options will be issued and guaranteed by the Options 
Clearing Corporation just like any other standardized option traded in 
the United States.
    Furthermore, the Commission notes that absent prior SEC approval, 
the component securities in either Index will not exceed 40 or be lower 
than 20 and shall satisfy CBOE's maintenance criteria. If an Index 
fails at any time to satisfy the maintenance criteria, CBOE will 
immediately notify the Commission of the fact and will not open for 
trading any additional series of options on the Index unless such 
failure is determined by the Exchange not to be significant and the 
Commission concurs in that determination, or unless the continued 
listing of options on each respective Index has been approved by the 
Commission under Section 19(b)(2) of the Exchange Act.
    The Commission finds good cause for approving the proposed rule 
change and Amendment Nos. 1 and 2 thereto prior to the thirtieth day 
after the date of publication of notice of filing thereof in the 
Federal Register. The proposed rule change, as amended by Amendment No. 
1, has been published for public comment in the Federal Register as of 
February 5, 2003. The Commission has not received any comments on the 
proposal. Further, the Commission notes that Amendment No. 2 does not 
change the proposed rule change; rather, CBOE requests that the 
Commission accelerate the effectiveness of the proposal so that the 
CBOE may begin the trading of the Euro 25 Index and

[[Page 10291]]

Asian 25 Index immediately. The Commission is accelerating approval of 
the proposed rule change, as amended by Amendment No. 1, prior to the 
expiration of the comment period because these proposed Indexes are 
similar the other broad-based index options that CBOE currently trades, 
and CBOE has addressed the relevant regulatory issues, especially 
pertaining to comprehensive surveillance agreements. Because Amendment 
No. 2 does not change the proposed rule change but only request 
acceleration prior to the expiration of the comment period, the 
Commission is noticing and approving this amendment on an accelerated 
basis. Accordingly, the Commission believes that it is consistent with 
Section 6(b)(5) and 19(b)(2) of the Act to approve the proposed rule 
change, and Amendment Nos. 1 and 2 thereto, on an accelerated basis.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether Amendment No. 2 
to 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, 450 Fifth Street, 
NW., Washington, DC 20549-0609. Copies of such filing will also be 
available for inspection and copying at the principal office of CBOE. 
All submissions should refer to the File No. SR-CBOE-2002-40 and should 
be submitted by March 25, 2003.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\19\ that the proposed rule change (SR-CBOE-2002-40), as amended, 
is approved.
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    \19\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-4953 Filed 3-3-03; 8:45 am]
BILLING CODE 8010-01-P