76510 Federal Register / Vol. 69, No. 244 / Tuesday, December 21, 2004 / Notices 

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3See letter from Angelo Evangelou, Managing 

Senior Attorney, Legal Division. CBOE, to John 

Roeser, Senior Special Counsel, Division of Market 

Regulation, Commission, dated October 6, 2004 

(‘‘Amendment No. 1’’).

4See Securities Exchange Act Release No. 50542 

(October 14, 2004), 69 FR 61879.

5 In approving this proposed rule change, the 

Commission has considered its impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f).

6 15 U.S.C. 78f(b)(5).

7 15 U.S.C. 78s(b)(2).

8 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 50626 

(November 3, 2004), 69 FR 65238.

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. 78o–3(b)(6).

6 15 U.S.C. 78o–3(b)(8).

7 15 U.S.C. 78s(b)(2).

8 17 CFR 200.30–3(a)(12).

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–50853; File No. SR–CBOE–

2004–50] 

Self-Regulatory Organizations; Order 

Granting Approval to a Proposed Rule 

Change and Amendment No. 1 Thereto 

by the Chicago Board Options 

Exchange, Inc. To Amend Its Rules 

Regarding Limitations on Designated 

Primary Market-Makers Putting Into 

Effect Stop and Stop-Limit Orders 

December 14, 2004. 

On July 29, 2004, the Chicago Board 

Options Exchange, Inc (‘‘CBOE’’) 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 rules regarding 

limitations on Designated Primary 

Market-Makers (‘‘DPMs’’) putting into 

effect stop and stop-limit orders. On 

October 8, 2004, the Exchange filed 

amendment No. 1 to the proposed rule 

change.3 The proposed rule change and 

Amendment No. 1 were published for 

comment in the Federal Register on 

October 21, 2004.4 The Commission 

received no comments on the proposal. 

This order approves the proposed rule 

change, as amended.

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 

association.5 In particular, the 

Commission believes that the proposal 

is consistent with section 6(b)(5) of the 

Act,6 which requires that the Exchange’s 

rules promote just and equitable 

principles of trade, serve to remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system, and to 

protect investors and the public interest.

The Exchange proposes to automate 

the handling of stop and stop-limit 

orders on CBOE’s Hybrid trading system 

such that stop and stop limit orders 

would be handled automatically by the 

Hybrid system rather than by the DPM. 

In addition, the Exchange proposes to 

eliminate the restrictions which 

generally prohibit a DPM from initiating 

a transaction for its own account that 

would put into effect any stop or stoplimit orders which may be in the book 

or which the DPM represents as an 

agent. Under the proposal, stop and 

stop-limit orders would reside on the 

Hybrid system invisibly so that the DPM 

would not know whether a transaction 

would trigger a stop or stop-limit order. 

Further, the DPM would no longer 

handle the stop order at any point or 

have any influence to purposefully 

affect triggering the stop or the ultimate 

execution price of the order. The 

Commission believes that the 

restrictions on DPM transactions for 

stop and stop-limit orders are no longer 

necessary for orders that are handled by 

the Hybrid system because such orders 

are not visible to or handled by the 

DPM. Accordingly, the Commission 

finds that the proposal is consistent 

with the Act. 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act 7 the 

proposed rule change (SR–CBOE–2004–

50), as amended, is approved.

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.8

Margaret H. McFarland, 

Deputy Secretary.

[FR Doc. 04–27863 Filed 12–20–04; 8:45 am] 

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–50848; File No. SR–NASD–

2004–133] 

Self-Regulatory Organizations; 

National Association of Securities 

Dealers, Inc.; Order Granting Approval 

of Proposed Rule Change To Amend 

NASD Rule 9522 (‘‘Initiation of 

Eligibility Proceeding; Member 

Regulation Consideration’’) To Give 

Member Regulation the Authority To 

Approve the MC–400 Applications of 

Statutorily Disqualified Persons Who 

Will Be Engaged Solely in Clerical and/

or Ministerial Activities 

December 14, 2004. 

On September 1, 2004, the National 

Association of Securities Dealers, Inc., 

(‘‘NASD’’) 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 NASD 

Rule 9522 (‘‘Initiation of Eligibility 

Proceeding; Member Regulation 

Consideration’’) to give Member 

Regulation the authority to approve the 

MC–400 applications of statutorily 

disqualified persons who will be 

engaged solely in clerical and/or 

ministerial activities. The proposed rule 

change was published for notice and 

comment in the Federal Register on 

November 10, 2004.3 The Commission 

received no comments on the proposal.

The Commission has reviewed 

carefully the proposed rule change and 

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 association 4 and, in 

particular, the requirements of section 

15A(b)(6) of the Act,5 which requires, 

among other things, that NASD’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. The 

Commission also finds the proposed 

rule change is consistent with section 

15A(b)(8) of the Act,6 which requires 

that NASD rules provide a fair 

procedure for the denial of membership 

to any person seeking membership 

therein.

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act 7, that the 

proposed rule change (SR–NASD–2004–

133) be, and it hereby is, approved.

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.8

Margaret H. McFarland, 

Deputy Secretary.

[FR Doc. 04–27833 Filed 12–20–04; 8:45 am] 

BILLING CODE 8010–01–P