[Federal Register Volume 69, Number 45 (Monday, March 8, 2004)]
[Notices]
[Pages 10774-10775]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-5053]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49343; File No. SR-CBOE-2003-58]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Inc.; Order Granting Approval of Proposed Rule Change Relating to Its 
Summary Fine Schedule for Position Limit Violations

March 1, 2004.
    On December 10, 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 amend its summary fine 
schedule for position limit violations under CBOE's minor rule 
violation plan.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    The proposed rule change was published for comment in the Federal 
Register on January 23, 2004.\3\ The Commission received no comments on 
the proposal.
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    \3\ See Securities Exchange Act Release No. 49078 (January 14, 
2004), 69 FR 3402.
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange \4\ and, in 
particular, the requirements of section 6 of the Act \5\ and the rules 
and regulations thereunder. In particular, the Commission believes that 
the proposed rule change is consistent with section 6(b)(5)\6\ of the 
Act which requires, among other things, that the Exchange's rules be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, and, in general, to 
protect investors and the public interest. In addition, the Commission 
believes that the proposed rule change is consistent with Rule 19d-
1(c)(2), which governs minor rule violation plans. The Commission 
believes that the proposed rule change should enable the Exchange to 
deal more efficiently with position limit violations and inadvertent 
position limit overages. In addition, the Commission believes that the 
proposed rule change should allow the Exchange to appropriately 
discipline its members

[[Page 10775]]

and persons associated with its members for position limit violations.
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    \4\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(5).
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    In approving this proposed rule change, the Commission in no way 
minimizes the importance of compliance with these rules, and all other 
rules subject to the imposition of fines under the Exchange's minor 
rule violation plan. The Commission believes that the violation of any 
self-regulatory organization's rules, as well as Commission rules, is a 
serious matter. However, in an effort to provide the Exchange with 
greater flexibility in addressing certain violations, the Exchange's 
minor rule violation plan provides a reasonable means to address rule 
violations that do not rise to the level of requiring formal 
disciplinary proceedings. The Commission expects that the CBOE will 
continue to conduct surveillance with due diligence, and make a 
determination based on its findings whether fines of more or less than 
the recommended amount are appropriate for violations of rules under 
the Exchange's minor rule violation plan, on a case by case basis, or 
if a violation requires formal disciplinary action.
    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-CBOE-2003-58) be, and it 
hereby is, approved.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-5053 Filed 3-5-04; 8:45 am]
BILLING CODE 8010-01-P