50412 Federal Register / Vol. 62, No. 186 / Thursday, September 25, 1997 / Notices

1CBOE filed Amendment No. 1 to the proposed

rule change requesting that the Commission

accelerate the operative date of the filing for good

cause shown to October 6, 1997. See letter from

Timothy H. Thompson, Senior Attorney, CBOE, to

Heather Seidel, Attorney, Market Regulation,

Commission, dated September 12, 1997.

2The Exchange has represented that this

proposed rule change: (i) Will not significantly

affect the protection of investors or the public

interest; (ii) will not impose any significant burden

on competition; and (iii) will not become operative

for 30 days after the date of this filing, unless an

earlier operative date is designated by the

Commission for good cause shown. The Exchange

also has provided at least five business days notice

to the Commission of its intent to file this proposed

rule change, as required by Rule 19b–4(e)(6) under

the Act.

3See supra note 1.

4The Commission recently approved a CBOE rule

filing to list and trade options on the DJIA. See

Securities Exchange Act Release No. 39011

(September 3, 1997), 62 FR 47840 (September 11,

1997) (File No. SR–CBOE–97–26).

SECURITIES AND EXCHANGE

COMMISSION

[File No. 1–10647]

Issuer Delisting; Notice of Application

to Withdraw from Listing and

Registration; (Precision Optics

Corporation, Inc., Common Stock,

$0.01 Par Value)

September 19, 1997.

Precision Optics Corporation, Inc.

(‘‘Company’’) has filed an application

with Securities and Exchange

Commission (‘‘Commission’’), pursuant

to Section 12(d) of the Securities

Exchange Act of 1934 (‘‘Act’’) and Rule

12d2–2(d) promulgated thereunder, to

withdraw the above specified security

(‘‘Security’’) from listing and

registration on the Boston Stock

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

The reasons cited in the application

for withdrawing the Security from

listing and registration include the

following:

The Company is filing this

application because its Board of

Directors has determined that continued

listing on the Exchange is unnecessary

in light of the listing of the Security on

the Nasdaq SmallCap Market. The

Company’s experience with Nasdaq has

been positive and the Company wishes

to avoid the incremental expenses and

administrative responsibilities

associated with continued listing on the

Exchange.

The Company has notified the

Exchange of its intention to withdraw

its Security from listing on the

Exchange. By letter dated August 12,

1997, the BSE indicated that it did not

object to the Company’s filing of this

application with the Commission.

Any interested person may, on or

before October 10, 1997, submit by letter

to the Secretary of the Securities and

Exchange Commission, 450 Fifth Street,

N.W., Washington, D.C. 20549, facts

bearing upon whether the application

has been made in accordance with the

rules of the exchange and what terms,

if any, should be imposed by the

Commission for the protection of

investors. The Commission, based on

the information submitted to it, will

issue an order granting the application

after the date mentioned above, unless

the Commission determines to order a

hearing on the matters.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 97–25464 Filed 9–24–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39092; File No. SR–CBOE–

97–44]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Board Options Exchange

Relating to Certain Rules Governing

the Trading of Options on the DJIA

September 18, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on September 8,

1997,1 the Chicago Board Options

Exchange Incorporated (‘‘CBOE ’’ or

‘‘Exchange’’) filed with the Securities

and Exchange Commission

(‘‘Commission’’) the proposed rule

change as described in Items I, II and III

below, which Items have been prepared

by the self-regulatory organization. The

Exchange has designated the proposed

rule change as constituting a ‘‘noncontroversial’’ rule change under

paragraph (e)(6) of Rule 19b–4 under the

act.2 The Commission is publishing this

notice to solicit comments on the

proposed rule change from interested

persons. CBOE has requested that the

Commission accelerate the operative

date for the proposed rule change for

good cause.3

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The CBOE proposes to amend certain

of its rules governing trading with

respect to the trading of options on the

Dow Jones Industrial Average (‘‘DJIA’’).4

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, the

self-regulatory organization 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 self-regulatory organization 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

The Exchange is proposing to amend

certain Exchange rules governing

trading with respect to the trading of

options on the DJIA (trading under the

symbol ‘‘DJX’’). In each case, the

Exchange is proposing to provide

comparable treatment for options on the

DJIA to that existing for other broadbased indexes with wide retail investor

interest, i.e., options on the Standard &

Poor’s (‘‘S&P’’) 100 Stock Index (‘‘OEX’’)

and options on the S&P 500 Stock Index

(‘‘SPX’’).

First, the Exchange is proposing to

amend Interpretation .08 to Rule 6.20 to

permit members of a floor procedure

committee which has been delegated

responsibility for overseeing the trading

of options on the DJIA to act as Floor

Officials. Currently, the interpretation

permits members of the Index Floor

Procedures Committee to act as Floor

Officials in the OEX and SPX trading

crowds only. At this time, the Exchange

has not decided which committee will

be delegated responsibility for options

on the DJIA, but the Exchange expects

the trading crowd to be large and to

develop its unique trading protocols.

Therefore, the rationale for allowing

committee members to act as Floor

Officials, i.e., these members will be

familiar with the particular trading

protocols in the trading crowd

governing those options, applies equally

to options on the DJIA. The

interpretation will also change the

reference to the ‘‘Index Floor Procedure

Committee’’ to the ‘‘applicable Floor

Procedure Committee’’ because it has

not yet been decided which committee

will have jurisdiction over options on

the DJIA and because the Index Floor
Federal Register / Vol. 62, No. 186 / Thursday, September 25, 1997 / Notices 50413

5The Exchange may create a new Market

Performance Committee responsible for the market

performance functions specific to trading the DJX,

or it may delegate market performance duties for

the DJX crowd to an existing Market Performance

Committee.

6The Commission approved the Exchange’s OEX/

SPX joint account circular on September 10, 1992.

See Securities Exchange Act Release No. 31174, 57

FR 42789 (September 16, 1992) (approving File No.

SR–CBOE–91–40). The circular was updated

pursuant to Commission approval of a change to

allow more than one SPX participant participate on

a trade on behalf of the joint account. See Securities

Exchange Act Release No. 35579 (April 7, 1995), 60

FR 18867 (April 13, 1995) (approving File No. SR–

CBOE–95–17).

7Attached as Exhibit B to the proposed rule

change is a revised version of the joint account

circular for OEX/SPX which incorporates DJX.

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

Procedure Committee has been divided

into the OEX Floor Procedure

Committee and the SPX Floor Procedure

Committee. The Exchange may decide

to delegate responsibility for overseeing

the trading in options on the DJIA to an

existing Floor Procedure Committee

(such as the OEX Floor Procedure

Committee) or it might create a new

Floor Procedure Committee that is

responsible for overseeing trading on

options on the DJIA alone. The

Exchange also may decide to create one

Committee responsible for all broadbased index options which would

replace the OEX Floor Procedure

Committee and the SPX Floor Procedure

Committee.

Second, the Exchange is proposing to

exempt DJX from the requirement that

the use of hand signals to convey order

information must be followed in written

form and time stamped immediately

after the signal has been sent. Currently,

Interpretation .02 to Rule 6.24 exempts

options on the OEX and the SPX from

this requirement. Because the Exchange

expects trading in DJX to be in a large

pit with an active order flow, the

Exchange believes it is appropriate to

exempt DJX from this requirement as

well.

Third, the Exchange wants to provide

for the possibility of using Lead MarketMakers (‘‘LMMs’’) in the DJX crowd as

it uses LMMs in the OEX crowd during

opening rotations. Due to the size of the

OEX trading crowd and the large

number of series traded in the crowd,

the Exchange has found that the use of

a modified opening rotation whereby

LMMs are assigned to open particular

series has allowed the OEX trading

crowd to conduct opening rotations

more quickly (and thus, enter into open

trading more quickly). The Exchange

believes that the LMM system should be

available for use by the DJX crowd

because the Exchange expects the DJX

crowd to be similar in size to the OEX

crowd and expects a large number of

series to trade in DJX. In addition, the

Exchange is proposing to change the

LMM rule to specify that the

‘‘appropriate Market Performance

Committee,’’ rather than the ‘‘Market

Performance Committee,’’ may assign

LMMs because the Exchange has not yet

decided which Market Performance

Committee will have responsibility for

overseeing the trading in DJX.5 The

appropriate Market Performance

Committee will likely monitor how

opening rotations are conducted

without LMMs before it decides

whether to appoint LMMs.

Nevertheless, the Exchange believes it is

critical to have the system available for

use in the DJX crowd in the event that

the opening rotations are taking too

much time from the commencement of

trading.

Finally, the Exchange is also

proposing to apply the terms of the

OEX/SPX joint account circular to

trading in options on the DJIA.6 The

circular provides that joint accounts

may be represented in the crowd by

more than one participant trading inperson for the joint account. In addition,

the circular provides that joint account

participants who are not trading inperson in the crowd may enter orders

for the joint account with floor brokers

even if other participants are trading the

same joint account in-person. The joint

account circular applicable to equity

options does not allow a joint account

participant to enter orders while another

joint account participant is trading inperson on behalf of the joint account.

The Exchange believes the OEX/SPX

model is more appropriate for options

on the DJIA because of the expected

large size of the DJX crowd.7

2. Statutory Basis

By applying certain existing trading

rules and circulars to the trading of

options on the DJIA, the Exchange

expects to enhance the possibility of the

successful launch of options on the DJIA

and to be able to provide investors with

a useful tool to invest in and hedge

interests in the U.S. equity market.

Therefore, the proposed rule change

will better serve the needs of CBOE’s

public customers and the Exchange

members who make a market for such

customers and is consistent with and

furthers the objectives of Section 6(b)(5)

of the Act 8 in that it is designed to

promote just and equitable principles of

trade, to remove impediments to and

perfect the mechanism of a free and

open market and a national market

system, and to protect investors and the

public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

Written comments on the proposed

rule change were neither solicited nor

received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The Commission finds that the

proposed rule change has become

effective pursuant to Section 19(b)(3)(A)

of the Act and Rule 19b–4(e)(6)

thereunder because it: (1) does not

significantly affect the protection of

investors or the public interest; (2) does

not impose any significant burden on

competition; and (3) was provided by

the Exchange to the Commission with

written notice of its intent to file the

proposed rule change at least five days

prior to the filing date. A proposed rule

change filed under Rule 19b–4(e) does

not become operative prior to thirty

days after the date of filing or such

shorter time as the Commission may

designate if such action is consistent

with the protection of investors and the

public interest. CBOE has requested that

the Commission accelerate the

implementation of the proposed rule

change so that it may become operative

prior to the thirty days specified under

Rule 19b–4(e)(6)(iii). At any time within

60 days of the filing of the proposed rule

change, the Commission may summarily

abrogate such 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.

The Commission finds good cause to

accelerate the thirty day period for the

proposed rule change to become

operative prior to the thirtieth day after

the date of filing. Specifically, the

Commission believes that the proposed

rule change should become operative on

the day that CBOE begins to trade

options on the DJIA to ensure that all

rules applicable to trading DJIA options

are in place prior to such trading

commences. Accordingly, the proposed

rule change will become operative on

October 6, 1997, rather than October 8,

1997.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and
50414 Federal Register / Vol. 62, No. 186 / Thursday, September 25, 1997 / Notices

9 17 CFR 200.30–3(a)(12).

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

2The Commission has modified the text of the

summaries prepared by DTC.

3For a detailed description of memo seg, refer to

Securities Exchange Act Release No. 26250

(November 3, 1988), 53 FR 45638 (File No. SR–

DTC–88–16) (order permanently approving DTC’s

proposed rule change).

4 17 CFR 240.15c3–3.

5 15 U.S.C. 78q–1(b)(3)(A).

6 15 U.S.C. 78s(b)(3)(A).

7 17 CFR 240.19b–4(e).

arguments concerning the foregoing.

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. 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 Exchange. All

submissions should refer to File No.

SR–CBOE–97–44 and should be

submitted by October 16, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–25374 Filed 9–24–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39095; File No. SR–DTC–

97–08]

Self-Regulatory Organizations; The

Depository Trust Company; Notice of

Filing and Immediate Effectiveness of

Proposed Rule Change Regarding the

Memo Segregation Service

September 19, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’), notice is hereby given that on

June 1, 1997, The Depository Trust

Company (‘‘TDC’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) the proposed rule

change as described in Items I, II, and

III below, which items have been

prepared primarily by DTC. The

Commission is publishing this notice to

solicit comments from interested

persons on the proposed rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change will modify

the procedures for participants to

control their collateral in connection

with the use of DTC’s memo segregation

service (‘‘memo seg’’).

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, and Proposed Rule

Change

In its filing with the Commission,

DTC 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. DTC has prepared

summaries, set forth in sections (A), (B),

and (C) below, of the most significant

aspects of such statements.2

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

DTC developed memo seg to assist

participants in their compliance with

Rule 15c3–3 under the Act.3 Rule 15c3–

3, among other things, requires that

broker-dealers maintain control of all

fully-paid and excess margin securities

they hold for the accounts of

customers.4 Memo seg enables

participants, particularly broker-dealer

participants, to segregate customer fullypaid and excess margin securities by

creating a memo position within their

free accounts. This memo position

enables participants to protect

themselves from unintended deliveries

of customer fully-paid and excess

margin securities that either are in the

participant’s free account or that may be

received during the daily processing

cycle.

One of DTC’s primary risk

management controls to protect DTC in

the event of a participant’s failure to

settle is DTC’s collateralization

procedures. These procedures are

designed to assure that a participant’s

net debit does not exceed the total

collateral available in its account. One

of the methods available to a participant

to collateralize its account is to give

DTC a standing instruction that

designates as collateral those securities

in its free account at the start of the

processing day. Currently, this

instruction would apply to all securities

in the participant’s free account,

including securities for which a memo

seg position has been created.

Accordingly, the proposed rule

change will amend DTC’s participant

collateralization procedures to exclude

start-of-day memo seg positions from

classification as collateral even if the

participant has given DTC a standing

instruction to designate as collateral all

securities in its free account. If a

participant subsequently wishes to

utilize memo seg positions as collateral,

it will be permitted to do so by giving

DTC the appropriate instructions. DTC

believes that the proposed rule change

will assist participants in retaining the

protections of memo seg from one day

to the next which should reduce the

potential for unintended deliveries of

customer fully paid or excess margin

securities.

DTC believes that the proposed rule

change is consistent with the

requirements of Section 17A(b)(3)(A) of

the Act 5 and the rules and regulations

thereunder because it promotes

efficiencies in the clearance and

settlement of securities transactions.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

DTC perceives no impact on

competition by reason of the proposed

rule change.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

Written comments from DTC

participants or others have not been

solicited or received on the proposed

rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change has become

effective pursuant to Section 19(b)(3)(A)

of the Act 6 and Rule 19b–4(e)(4)

thereunder 7 because it effects a change

in an existing service of DTC that (i)

does not adversely affect the

safeguarding of securities or funds in

the custody or control of DTC or for

which it is responsible and (ii) does not

significantly affect the respective rights

or obligations of DTC or persons using

the service. At any time within sixty

days of the filing of such rule change,

the Commission may summarily

abrogate such rule change if it appears

to the Commission that such action is

necessary or appropriate in the public

interest, for the protection of investors,