Federal Register / Vol. 65, No. 94 / Monday, May 15, 2000 / Notices 31037

7For example, many market participants use

trading strategies whereby they trade index options

and index futures based on the expectation that the

settlement values will have a predictable

relationship.

8 15 U.S.C. 78q–1(a)(1)(D).

9 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

different dates and hence potentially

different index values for fixing the final

settlement values for options and

futures on the same index creates

uncertainty and risk.7 Therefore, OCC is

amending its By-Laws so that if the

primary market(s) for one or more

component securities of an index does

not open for trading on the last trading

day before expiration of a series of

options on the index, an adjustment

panel acting pursuant to Article XVII

may fix the exercise settlement amount

for such options by using the opening

prices of the affected security or

securities when the primary market

reopens.

OCC also is amending Article XVII to

make clear that (1) OCC has the

discretion to determine which market is

a security’s primary market and (2)

when OCC fixes a settlement price

based on an index level at the close of

trading, the price will be fixed based on

the index level at the close of regular

trading hours, as determined by OCC.

II. Discussion

In Section 17A, Congress stated its

finding that the development of uniform

standards and procedures for clearance

and settlement will reduce unnecessary

costs and increase the protection of

investors and persons facilitating

transactions by and acting on behalf of

investors. Congress then directed the

Commission to facilitate the

establishment of coordinated facilities

for the clearance and settlement of

transactions in securities, securities

options, futures, and options on

futures.8 The Commission believes that

the approval of OCC’s rule change is in

line with this finding and directive of

Congress. The current practice of using

different dates and hence potentially

different index values for fixing the final

settlement values for options and

futures on the same index has the

potential to create uncertainty and risks

for many market participants. This risk

should be minimized by OCC’s new

procedure which will allow OCC to

conform its method of establishing the

expiration settlement value for index

options with that used for establishing

the final settlement price for related

index futures and options on index

futures.

III. Conclusion

On the basis of the foregoing, the

Commission finds that the proposal is

consistent with the requirements of the

Act and in particular with the

requirements of Section 17A of the Act

and the rules and regulations

thereunder.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act, that the

proposed rule change (File No. SR–

OCC–00–01) be and hereby is approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–12134 Filed 5–12–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42764; File No. SR–PHLX–

00–06]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change by the Philadelphia Stock

Exchange, Inc. Relating to Giving

Preference to Options Specialist Units

Which Resign From Option Trading

Privileges in the Best Interest of the

Exchange in Future Allocation

Decisions Regarding Such Options

May 8, 2000.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’) 1 and Rule 19b–4 thereunder,1

notice is hereby given that on February

1, 2000, the Philadelphia Stock

Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’)

the proposed rule change as described

in Items I and II below, which Items

have been prepared by the Exchange.

The Commission is publishing this

notice to solicit comments on the

proposed rule change from interested

persons. For the reasons discussed

below, the Commission is granting

accelerated approval of the proposed

rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

Phlx proposes new Rule 513,

Voluntary Resignation of Options

Privileges, which provides that when an

option specialist unit voluntarily resigns

from trading privileges in an option in

the best interest of the Exchange, the

option specialist unit which last traded

that option will be given preference in

any future allocation decision regarding

that option, barring any performance or

disciplinary issues. The text of the

proposed rule is as follows:

Voluntary Resignation of Options

Privileges

Rule 513. (a) If an option specialist

unit voluntarily resigns from

registration in a particular option and

the Committee determines such

resignation to be in the best interest of

the Exchange, and that option is

subsequently delisted, barring any

specialist performance or disciplinary

issues, the option specialist unit which

last traded that option will be given

preference in any future allocation

decision regarding that option.

(b) The preference set forth in Section

(a) of this rule shall be in effect for a

period of one year from the date of

resignation from trading privileges by

the specialist unit.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

Phlx 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 III below. The Exchange has

prepared summaries, set forth in

Sections A, B, and C below, of the most

significant aspects of such statements.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

1. Purpose

Currently, the Exchange and the

Options Price Reporting Authority

(‘‘OPRA’’) have serious concerns

regarding mitigation of quote traffic and

maximizing computer capacity. To

address those concerns, proposed Rule

513 is intended to provide incentive for

options specialists to create more

computer capacity by resigning from

relatively low volume/high quote traffic

options. To provide that incentive,

proposed Rule 513 states that the

specialist unit which last traded that

option will be given preference in any

future allocation decision regarding that

option.

Mitigation of excessive quote traffic

and concomitant preservation of

computer capacity is currently an

industry-wide concern, and the

Exchange believes that a preference

provision such as the one contemplated

31038 Federal Register / Vol. 65, No. 94 / Monday, May 15, 2000 / Notices

3See Phlx Rule 506. This rule provides that the

Committee will solicit applications from all eligible

specialist units.

4See Phlx Rules 511 and 515.

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

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

7 15 U.S.C. 78f(b).

8 15 U.S.C. 78f(b)(5).

9 In approving this rule, the Commission has

considered the proposed rule’s impact on

efficiency, competition, and capital formation. 15

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

10See Securities Exchange Act Release No. 42493

(March 3, 2000), 65 FR 12597 (March 9, 2000).

11 15 U.S.C. 78s(b)(2).

12 Id.

in the proposed rule addresses this

concern. In this context, the ‘‘best

interest of the Exchange’’ is served by

specialist units that voluntarily resign

from trading privileges in options that

trade at a relatively low volume, but

which generate a high number of quotes

to be disseminated from, and received

by, the Exchange.

The rule does not provide an absolute

guarantee that the specialist unit that

last traded the option will be allocated

the option in the event that it is certified

and resolicited to the Exchange’s

options specialist units. All options

specialist units will be allowed to apply

for trading privileges in relisted options,

and all applications will be considered

by the Exchange’s Allocation,

Evaluation and Securities Committee

(‘‘Committee’’).3 The proposed rule

contemplates that the Committee may

review the performance of a specialist

unit that applies for an option from

which it had previously resigned

(‘‘applicant’’). In order to qualify for

preferential treatment in the allocation

of a relisted option, the performance of

the applicant must be consistent with

the standards set forth in the Exchange’s

rules.4 The Committee will also take

into account the disciplinary record of

the applicant when considering the

application, and preferential treatment

of the specialist unit applicant will not

be given if the applicant demonstrates

the inability to adhere to the Exchange’s

disciplinary rules and those of the

Commission.

In approving Rule 513 for filing with

the Commission, the Exchange’s Board

of Governors has determined that

specialist units would be more willing

to resign from trading privileges in

options in order to mitigate quote traffic

and to conserve computer capacity on

the Exchange, if they are given some

form of preference in the event that the

options from which they have resigned

in the best interest of the Exchange are

to be relisted on the Exchange in the

future.

Over time, material changes in the

composition, personnel, capitalization,

and other aspects of specialist units

which resign from option trading

privileges may occur, which would

affect the Committee’s decisions

regarding future allocations to those

specialist units. For this reason, the

proposed rule limits the Committee’s

preference in such future allocations to

one year.

2. Statutory Basis

Phlx believes that the proposed rule

change is consistent with the provisions

of Section 6 of the Act,5 in general, and

Section 6(b)(5) of the Act,6 in particular,

in that it is designed to perfect the

mechanisms of a free and open market

and a national market system, and to

protect investors and the public interest.

By giving Exchange option specialists

incentive to resign from trading

privileges in certain high quote/low

volume options, the Exchange will

continue to serve the investing public

and its markets by mitigating quote

traffic and, thus, providing the most

current quote and execution information

possible.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

Phlx does not believe that the

proposed rule change will result in any

burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

Phlx has neither solicited nor

received written comments on the

proposed rule change.

III. 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, N.W.,

Washington, D.C. 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. Copies of such filing will also be

available for inspection and copying at

the principal office of the Phlx. All

submissions should refer to File No.

SR–Phlx–00–06 and should be

submitted by June 5, 2000.

IV. Commission’s Findings and Order

Granting Accelerated Approval of the

Proposed Rule Change

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 and, in particular, with the

requirements of Section 6(b).7

Specifically, the Commission believes

the proposal is consistent with the

Section 6(b)(5) 8 requirements that the

rules of an exchange be designed to

promote just and equitable principles of

trade, to remove impediments to and to

perfect the mechanism of a free and

open market and a national market

system and, in general, to protect

investors and the public interest.9

The Commission has previously note

that the aggregate message traffic

generated by the options exchanges is

rapidly approaching the outside limit of

OPRA’s systems capacity.10 OPRA’s

processor has informed the Commission

that current plans to enhance OPRA’s

systems are not expected to be

completed before the end of the second

quarter of this year, at the earliest.

Accordingly, proposals that may

mitigate quote traffic and conserve

computer capacity, such as proposed

Phlx Rule 513, should benefit investors

and other participants in the options

markets.

Pursuant to Section 19(b)(2), 11 the

Commission finds good cause for

approving the proposed rule change

prior to the thirtieth day after the date

of publication of notice of the filing in

the Federal Register. The Commission

believes that granting accelerated

approval of the proposal will allow Phlx

to expeditiously implement the

incentive program without any

unnecessary delay.

It Is Therefore Ordered, pursuant to

Section 19(b)(2) 12 of the Act, that the

proposed rule change (SR–Phlx–00–06)

is approved on an accelerated basis.

Federal Register / Vol. 65, No. 94 / Monday, May 15, 2000 / Notices 31039

13 17 CFR 200.30–3(a)(12).

1The terms we and us in this Social Security

Ruling have the same meaning as in 20 CFR

404.1502 and 416.902. We or us refers to either the

Social Security Administration or the State agency

making the disability or blindness determination;

i.e., our adjudicators at all levels of the

administrative review process and our quality

reviewers.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.13

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–12135 Filed 5–12–00; 8:45 am]

BILLING CODE 8010–01–M

SOCIAL SECURITY ADMINISTRATION

Social Security Ruling, SSR 00–3p.

Titles II and XVI: Evaluation of Obesity

AGENCY: Social Security Administration.

ACTION: Notice of Social Security Ruling.

SUMMARY: In accordance with 20 CFR

402.35(b)(1), the Commissioner of Social

Security gives notice of Social Security

Ruling, SSR 00–3p. This Ruling

provides guidance on the evaluation of

disability claims involving obesity

following our deletion of listing 9.09,

Obesity, from the Listing of

Impairments. The final rule deleting

listing 9.09 was effective on October 25,

1999 (64 FR 46122 (1999)).

EFFECTIVE DATE: May 15, 2000.

FOR FURTHER INFORMATION CONTACT:

Bonnie Davis, Office of Disability,

Social Security Administration, 6401

Security Boulevard, Baltimore, MD

21235–6401, (410) 965–4172.

SUPPLEMENTARY INFORMATION: Although

we are not required to do so pursuant

to 5 U.S.C. 552(a)(1) and (a)(2), we are

publishing this Social Security Ruling

in accordance with 20 CFR 402.35(b)(1).

Social Security Rulings make

available to the public precedential

decisions relating to the Federal old-age,

survivors, disability, supplemental

security income, and black lung benefits

programs. Social Security Rulings may

be based on case decisions made at all

administrative levels of adjudication,

Federal court decisions, Commissioner’s

decisions, opinions of the Office of the

General Counsel, and policy

interpretations of the law and

regulations.

Although Social Security Rulings do

not have the same force and effect as the

statute or regulations, they are binding

on all components of the Social Security

Administration, in accordance with 20

CFR 402.35(b)(1), and are to be relied

upon as precedents in adjudicating

cases.

If this Social Security Ruling is later

superseded, modified, or rescinded, we

will publish a notice in the Federal

Register to that effect.

(Catalog of Federal Domestic Assistance,

Programs 96.001 Social Security—

Disability Insurance; 96.006

Supplemental Security Income)

Dated: May 3, 2000.

Kenneth S. Apfel,

Commissioner of Social Security.

Policy Interpretation Ruling Titles II

and XVI: Evaluation of Obesity

Purpose

To provide guidance on SSA policy

concerning the evaluation of obesity in

disability claims filed under titles II and

XVI of the Social Security Act (the Act).

Citations

Sections 216(i), 223(d), 223(f),

1614(a), and 1614(c) of the Act, as

amended; Regulations No. 4, subpart P,

sections 404.1502, 404.1508, 404.1509,

404.1512, 404.1520, 404.1521, 404.1523,

404.1525, 404.1526, 404.1528, 404.1529,

404.1530, 404.1545, 404.1546, 404.1561,

404.1594, and appendix 1; and

Regulations No. 16, subpart I, sections

416.902, 416.908, 416.909, 416.912,

416.920, 416.921, 416.923, 416.924,

416.925, 416.926, 416.926a, 416.928,

416.929, 416.930, 416.933, 416.945,

416.946, 416.961, 416.994, and

416.994a.

Introduction

On August 24, 1999, we 1 published a

final rule in the Federal Register

deleting listing 9.09, Obesity, from the

Listing of Impairments in 20 CFR,

subpart P, appendix 1 (the listings). The

final rule was effective on October 25,

1999. 64 FR 46122 (1999).

We stated in the preamble to the final

rule that we deleted listing 9.09 because

our experience adjudicating cases under

this listing indicated that the criteria in

the listing were not appropriate

indicators of listing-level severity. In

our experience, the criteria in listing

9.09 did not represent a degree of

functional limitation that would prevent

an individual from engaging in any

gainful activity.

However, even though we deleted

listing 9.09, we made some changes to

the listings to ensure that obesity is still

addressed in our listings. In the final

rule, we added paragraphs to the

prefaces of the musculoskeletal,

respiratory, and cardiovascular body

system listings that provide guidance

about the potential effects obesity has in

causing or contributing to impairments

in those body systems. See listings

sections 1.00F, 3.00I, and 4.00F. The

paragraphs state that we consider

obesity to be a medically determinable

impairment and remind adjudicators to

consider its effects when evaluating

disability. The provisions also remind

adjudicators that the combined effects of

obesity with other impairments can be

greater than the effects of each of the

impairments considered separately.

They also instruct adjudicators to

consider the effects of obesity not only

under the listings but also when

assessing a claim at other steps of the

sequential evaluation process, including

when assessing an individual’s residual

functional capacity.

In response to public comments, we

stated that we would provide additional

guidance in a Social Security Ruling

(SSR). (64 FR at 46126) This SSR

provides that additional guidance by

discussing how we evaluate obesity in

disability claims filed by adults and

children under titles II and XVI of the

Act.

Policy Interpretation

General

1. What Is Obesity?

Obesity is a complex, chronic disease

characterized by excessive

accumulation of body fat. Obesity is

generally the result of a combination of

factors (e.g., genetic, environmental, and

behavioral).

In one sense, the cause of obesity is

simply that the energy (food) taken in

exceeds the energy expended by the

individual’s body. However, the

influences on intake, the influences on

expenditure, the metabolic processes in

between, and the overall genetic

controls are complex and not well

understood.

The National Institutes of Health

(NIH) established medical criteria for

the diagnosis of obesity in its Clinical

Guidelines on the Identification,

Evaluation, and Treatment of

Overweight and Obesity in Adults (NIH

Publication No. 98–4083, September

1998). These guidelines classify

overweight and obesity in adults

according to Body Mass Index (BMI).

BMI is the ratio of an individual’s

weight in kilograms to the square of his

or her height in meters (kg/m2). For

adults, both men and women, the

Clinical Guidelines describe a BMI of

25–29.9 as ‘‘overweight’’ and a BMI of

30.0 or above as ‘‘obesity.’’

The Clinical Guidelines recognize

three levels of obesity. Level I includes

BMIs of 30.0–34.9. Level II includes

BMIs of 35.0–39.9. Level III, termed

‘‘extreme’’ obesity and representing the

greatest risk for developing obesityVerDate 11<MAY>2000 20:48 May 12, 2000 Jkt 190000 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 E:\FR\FM\15MYN1.SGM pfrm08 PsN: 15MYN1