[Federal Register Volume 68, Number 206 (Friday, October 24, 2003)]
[Notices]
[Pages 61027-61029]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-26884]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48660; File No. SR-OC-2003-08]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by OneChicago, LLC Relating to 
Maintenance Standards for a Security Futures Product Based on a Single 
Security

October 20, 2003.
    Pursuant to section 19(b)(7) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-7 under the Act,\2\ notice is hereby given 
that on October 14, 2003, OneChicago, LLC (``OneChicago'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule changes described in 
Items I, II, and III below, which Items have been prepared by 
OneChicago. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(7).
    \2\ 17 CFR 240.19b-7.
---------------------------------------------------------------------------

    OneChicago also has filed the proposed rule change with the 
Commodity Futures Trading Commission (``CFTC''). OneChicago filed a 
written certification with the CFTC under section 5c(c) of the 
Commodity Exchange Act \3\ on October 13, 2003.
---------------------------------------------------------------------------

    \3\ 7 U.S.C. 7a-2(c).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Description of the Proposed Rule 
Change

    OneChicago proposes to amend the maintenance standards requirement 
(``Maintenance Standards'') for a security futures product based on a 
single security (``Single Stock Future'') relating to the market price 
of the underlying security. The text of the proposed rule change 
appears below. New text is in italics.

Eligibility And Maintenance Criteria For Security Futures Products

    I. No Change.

[[Page 61028]]

    II. Maintenance standards for a security futures product based on a 
single security.
    A. OneChicago will not open for trading any security futures 
product that is physically settled with a new delivery month, and may 
prohibit any opening purchase transactions in the security futures 
product already trading, to the extent it deems such action necessary 
or appropriate, unless the underlying security meets each of the 
following maintenance requirements; provided that, if the underlying 
security is an ETF Share, TIR or Closed-End Fund Share, the applicable 
requirements for initial listing of the related security futures 
product (as described in I.A. above) shall apply in lieu of the 
following maintenance requirements:
    (i)-(iv) No Change.
    (v) The market price per share of the underlying security has not 
closed below $3.00 on the previous trading day to the Expiration Day of 
the nearest expiring Contract on the underlying security. The market 
price per share of the underlying security will be measured by the 
closing price reported in the primary market in which the underlying 
security traded.
    Requirement (v) as Applied to Restructure Securities:
    If a Restructure Security is approved for security futures product 
trading under the initial listing standards in Section I, the market 
price history of the Original Equity Security prior to the commencement 
of trading in the Restructure Security, including ``when-issued'' 
trading, may be taken into account in determining whether this 
requirement is satisfied.
    (vi) No Change.
    B-DNo Change.
    III.-IV. No Change.

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

    OneChicago has prepared statements concerning the purpose of, and 
basis for, the proposed rule change, burdens on competition, and 
comments received from members, participants, and others. The text of 
these statements may be examined at the places specified in Item IV 
below. These statements are set forth in Sections A, B, and C below.

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

1. Purpose
    OneChicago proposes to correct Maintenance Standard II.A.v in which 
the words ``has not'' were inadvertently omitted. On February 24, 2003, 
OneChicago filed a proposed rule change with the Commission that 
amended OneChicago's maintenance standards for Single Stock Future that 
would prevent OneChicago from opening a Single Stock Future contract in 
a new delivery month if the market price per share of the underlying 
security closed below $3.00 on the previous trading day to the 
expiration of the nearest expiring Contract on the underlying 
security.\4\ OneChicago states that the purpose clause of the February 
24, 2003 proposed rule filing properly described the maintenance 
requirement; however, the rule text inadvertently left out the words 
``has not.'' \5\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 47445 (March 5, 
2003), 68 FR 11595 (March 11, 2003). The Commission received no 
comments during the comment period.
    \5\ The current rule text reads:
    II.A. OneChicago will not open for trading any security futures 
product that is physically settled with a new delivery month, and 
may prohibit any opening purchase transactions in the security 
futures product already trading, to the extent it deems such action 
necessary or appropriate, unless the underlying security meets each 
of the following maintenance requirements; provided that, if the 
underlying security is an ETF Share, * * *:
    v. The market price per share of the underlying security closed 
below $3.00 on the previous trading day to the Expiration Day of the 
nearest expiring Contract on the underlying security. The market 
price per share of the underlying security will be measured by the 
closing price reported in the primary market in which the underlying 
security traded.
    Requirement (v) as Applied to Restructure Securities:
    If a Restructure Security is approved for security futures 
product trading under the initial listing standards in Section I, 
the market price history of the Original Equity Security prior to 
the commencement of trading in the Restructure Security, including 
``when-issued'' trading, may be taken into account in determining 
whether this requirement is satisfied.
---------------------------------------------------------------------------

    The correction made today is consistent with changes made on the 
option exchanges. Section 6(h)(3)(C) of the Act requires that Listing 
Standards for security futures ``be no less restrictive than comparable 
Listing Standards for options traded on a national securities exchange. 
* * *'' \6\ The Commission has approved similar rule changes for the 
Chicago Board Options Exchange, Inc. (``CBOE''),\7\ the American Stock 
Exchange LLC (``Amex''),\8\ the International Stock Exchange, Inc. 
(``ISE''),\9\ the Philadelphia Stock Exchange, Inc. (``Phlx''),\10\ and 
the Pacific Exchange, Inc. (``PCX'').\11\ Since CBOE, Amex, ISE, Phlx 
and PCX have comparable maintenance Listing Standards, the proposed 
rule change meets the requirement of section 6(h)(3)(C) of the Act.\12\
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(h)(3)(C).
    \7\ See Securities Exchange Act Release No. 44964 (October 19, 
2001), 66 FR 54559 (October 29, 2001).
    \8\ See Securities Exchange Act Release No. 59278 (November 16, 
2001), 66 FR 59278 (November 27, 2001).
    \9\ See Securities Exchange Act Release No. 45087 (November 20, 
2001), 66 FR 60232 (December 3, 2001).
    \10\ See Securities Exchange Act Release No. 45086 (November 19, 
2001), 66 FR 59832 (November 30, 2001).
    \11\ See Securities Exchange Act Release No. 45038 (November 6, 
2001), 66 FR 57764 (November 16, 2001).
    \12\ 15 U.S.C. 17f(h)(3)C).
---------------------------------------------------------------------------

2. Statutory Basis
    The proposed rule change is consistent with section 6(b)(5) of the 
Act \13\ in that it is reasonably designed to prevent fraudulent and 
manipulative acts and practices, and promote just and equitable 
principles of trade.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    OneChicago does not believe that the proposed rule change will have 
a negative impact on competition. In fact, OneChicago believes the 
proposed rule change would promote competition since the proposed rule 
change is no less restrictive than comparable options exchanges.

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

    Comments on the proposed rule change have not been solicited and 
none have been received.

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

    The proposed rule change has become effective on October 14, 2003. 
Within 60 days of the date of effectiveness of the proposed rule 
change, the Commission, after consultation with the CFTC, may summarily 
abrogate the proposed rule change and require that the proposed rule 
change be refiled in accordance with the provisions of section 19(b)(1) 
of the Act.\14\
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change conflicts with the Act. Persons making written submissions 
should file nine copies of the submission with the Secretary, 
Securities and Exchange Commission, 450 Fifth Street, NW, Washington, 
DC 20549-0609.

[[Page 61029]]

Comments also may be submitted electronically to the following e-mail 
address: [email protected]. 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 these filings also will be available for 
inspection and copying at the principal office of OneChicago. All 
submissions should refer to File No. SR-OC-2003-08 and should be 
submitted by November 14, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(75).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-26884 Filed 10-23-03; 8:45 am]
BILLING CODE 8010-01-P