[Federal Register Volume 68, Number 43 (Wednesday, March 5, 2003)]
[Notices]
[Pages 10557-10558]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-5082]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 47406; File No. SR-CBOE-2003-04]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Board Options 
Exchange, Incorporated, To Add Two Previously Deleted Interpretations 
to Rule 5.4

February 26, 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 February 10, 2003, the Chicago Board Options Exchange, 
Incorporated (``CBOE'' or ``Exchange'') filed with the Securities and 
Exchange Commission (``SEC'' or ``Commission'') the proposed rule 
change as described in Items I, II, and III below, which Items have 
been prepared by CBOE. CBOE 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The CBOE proposes to amend Rule 5.4, which governs the withdrawal 
of approval for securities underlying options traded on the Exchange, 
to add two previously deleted Interpretations. The text of the proposed 
rule change is available at the Office of the Secretary, 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, 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
    The Exchange proposes to amend Rule 5.4 to add two interpretations 
that were inadvertently and unintentionally deleted from Rule 5.4 in a 
prior rule change, SR-CBOE-1997-23.\5\ In 1997, CBOE filed SR-CBOE-97-
23, which proposed to make changes to CBOE Rules 5.4, 5.5, 5.6, and 
5.7. As noted in that filing, the purpose of that rule change was: (1) 
To amend the procedures for opening trading in series of equity options 
under Rules 5.5 and 5.6 in order to allow the Exchange the same 
flexibility in adding series as permitted under other exchanges' rules; 
(2) to amend Rules 5.5 and 5.6 to provide specifically in the Rules for 
near-term options expiration and relieve the Product Development 
Committee of its responsibility with respect to

[[Page 10558]]

opening series of options; and (3) to clarify and reorganize Rules 5.4, 
5.5, 5.6, and 5.7.
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    \5\ See SEC Rel. No. 34-38743 (June 17, 1997), 62 FR 34332 (June 
25, 1997).
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    In addition, in SR-CBOE-97-23 CBOE also inadvertently and 
unintentionally deleted from Rule 5.4 two Interpretations that were 
then numbered .07 and .08. The deletion of these two Interpretations 
was neither discussed in the proposed rule change CBOE submitted, nor 
in the SEC order granting accelerated approval of the proposed rule 
change. Interpretations .07 and .08 read:

.07 When there is no open interest in a series the Exchange may delist 
such series. Delisting shall be preceded by a notice to member 
organizations concerning the delisting.
.08 Where a class of options contracts is open for trading on another 
national securities exchange, the Exchange may delist such class of 
options contracts. Delisting shall be preceded by a notice to member 
organizations concerning the delisting.

    CBOE now proposes to add former Interpretation .07 to the current 
version of Rule 5.4 as Interpretation and Policy 12, and to add a new 
Interpretation and Policy .13 which is nearly identical to former 
Interpretation .08. In the proposed new Interpretation .13, CBOE 
describes the process for delisting option classes that are traded on 
more than one exchange, and also adds language describing the process 
for delisting option classes that are traded solely on CBOE.
    The Exchange notes that proposed new Interpretation .12 is 
identical to American Stock Exchange Rule 903, Commentary .02 and 
Pacific Exchange Rule 6.4(a), Commentary .02.
2. Statutory Basis
    The Exchange believes that the current proposal will allow the 
Exchange to provide investors with those options that are most useful 
and in demand without sacrificing any investor protection. Accordingly, 
the proposed rule change is consistent with section 6(b) \6\ of the 
Act, in general, and furthers the objectives of section 6(b)(5) \7\ in 
particular, in that it would remove impediments to and perfect the 
mechanism of a free and open market in a manner consistent with the 
protection of investors and the public interest.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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 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, the proposed rule change has become 
effective pursuant to section 19(b)(3)(A) of the Act,\8\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\9\ At any time within 60 
days of the filing of the proposed rule change, the Commission may 
summarily abrogate the 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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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
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    Pursuant to Rule 19b-4(f)(6)(iii) under the Act,\10\ the proposal 
may not become operative for 30 days after the date of its filing, or 
such shorter time as the Commission may designate if consistent with 
the protection of investors and the public interest, and the CBOE must 
file notice of its intent to file the proposed rule change at least 
five business days beforehand. The CBOE has requested that the 
Commission waive the five-day pre-filing requirement and the 30-day 
operative delay so that the proposed rule change will become 
immediately effective upon filing.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
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    The Commission believes that waiving the five-day pre-filing 
provision and the 30-day operative delay is consistent with the 
protection of investors and the public interest.\11\ The proposal 
merely replaces rule text that was inadvertently deleted. Also, the 
proposed rule change is consistent with the rules of other option 
exchanges that the Commission previously approved. For these reasons, 
the Commission designates the proposed rule change as effective and 
operative immediately.
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    \11\ For purposes of accelerating the operative date of this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition and capital formation. 15 U.S.C. 78c(f).
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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 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 section, 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 file No. SR-CBOE-2003-04 and should be 
submitted by March 26, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CRF 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-5082 Filed 3-4-03; 8:45 am]
BILLING CODE 8010-01-P