Federal Register / Vol. 62, No. 230 / Monday, December 1, 1997 / Notices 63577

42847 (Aug. 8, 1997) (Commission order approving

a change in the minimum increment to 1⁄16th for

NYSE listed-securities).

4 15 U.S.C. 78f(b).

5 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3By adding the term ‘‘appropriate’’ before the

term ‘‘Floor Procedure Committee’’ in the text of the

rule, the amendment clarified that the decision to

change the increments with respect to a particular

class of options will be made by whichever Floor

Procedure Committee has jurisdiction over trading

in that option class. The amendment also replaced

the original Exhibit 1 that was sent to the

Commission with a revised Exhibit 1. See Letter

from Timothy H. Thompson, CBOE, to Christine

Richardson, Division of Market Regulation,

Commission (Nov. 14, 1997) (‘‘Amendment No. 1’’)

2. Statutory Basis

The Exchange represents that the

proposed rule change is consistent with

Section 6(b)(5) of the Act 4 in that it is

designed to prevent fraudulent and

manipulative acts and practices, to

promote just and equitable principles of

trade, and is not designed to permit

unfair discrimination between

customers, issuers, brokers or dealers.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any inappropriate burden on

competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, participants, or Others

No written comments were either

solicited or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of the publication of

this notice in the Federal Register or

within such longer period (i) as the

Commission may designate up to 90

days of such date if it finds such longer

period to be appropriate and publishes

its reasons for so finding or (ii) as to

which the self-regulatory organization

consents, the Commission will:

(A) By order approve the proposed

rule change, or

(B) Institute proceedings to determine

whether the proposed rule change

should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

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 at

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–Amex–97–41 and should be

submitted by December 22, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–31391 Filed 11–28–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39348; File No. SR–CBOE–

97–49]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change and

Amendment No. 1 Thereto by the

Chicago Board Options Exchange, Inc.

To Change the Minimum Increment for

Bids and Offers in Options

November 21, 1997.

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

Securities Exchange Act of 1934

(‘‘Exchange Act’’ or ‘‘Act’’),1 and Rule

19b–4 thereunder,2 notice is hereby

given that on September 25, 1997, the

Chicago Board Options Exchange, Inc.

(‘‘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. On November 17, 1997,

the Exchange submitted to the

Commission an amendment to the

proposed rule change.3 The Commission

is publishing this notice to solicit

comments on the proposed rule change

from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange proposes to amend

Rule 6.42 by adopting a procedure that

would allow the Exchange to establish

options trading differentials on an

expedited basis. 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

Exchange Rule 6.42 to give the Board of

Directors the authority to establish the

minimum trading increments for option

contracts. Currently, Rule 6.42 states

that bids and offers shall be expressed

in eighths of $1 unless a different

increment is approved by the Floor

Procedure Committee for an option

contract of a particular series. An

interpretation to the Rule states that

bids and offers for all option series

trading below $3 shall be expressed in

sixteenths of a dollar. Until such time as

the Board determines to make a change

the current standards will apply.

The proposed change would allow the

Exchange to change the trading

increments on an expedited basis and

thus, allow the Exchange to respond

appropriately to changes in the

minimum trading increment in the

markets for the securities underlying

CBOE options or to changes in the

minimum trading increments for one of

the other options exchanges. When the

Board of Directors determines to change

the trading increments, the Exchange

will designate such change as a stated

policy, practice, or interpretation with

respect to the administration of Rule

6.42 within the meaning of

subparagraph (3)(A) of subsection 19(b)

of the Exchange Act and will file a rule

change for effectiveness upon filing

with the Commission.

There has been a movement within

the industry to reduce the minimum

trading and quotation increments
63578 Federal Register / Vol. 62, No. 230 / Monday, December 1, 1997 / Notices

4See Exchange Act Rel. No. 38571 (May 5, 1997),

62 FR 25682 (May 9, 1997) (Commission order

approving a change in the minimum increment to

1⁄16th for securities listed on the American Stock

Exchange); Exchange Act Rel. No. 38678 (May 27,

1997), 62 FR 30363 (June 3, 1997) (Commission

order approving a change in the minimum

increment to 1/16th for Nasdaq-listed securities);

and Exchange Act Rel. No. 38897 (Aug. 1, 1997),

62 FR 42847 (Aug. 8, 1997) (Commission order

approving a change in the minimum increment to

1⁄16th for NYSE listed-securities).

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

6 17 CFR 200.30–3(a)(12).

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

2See Securities Exchange Act Release No. 39028

(September 8, 1997), 62 FR 48329.

imposed by the various SROs.4 As

derivative securities, the prices of

options are determined in reference to

the prices of the underlying securities.

Consequently, the Exchange believes

that where practicable, the Exchange

should have minimum increments

comparable to those applicable to the

securities underlying CBOE options.

The proposed rule change would give

the Exchange the flexibility to follow

the suit of the principal exchanges for

the underlying securities without

having to continually update its rules

but at the same time would give the

Exchange the flexibility it needs to

deviate from the minimum increments

established by the principal markets for

the underlying securities in the event

that the CBOE’s systems were not

immediately able to handle such

increments. The Exchange, therefore,

believes the quality of the market for

CBOE options will be enhanced by

allowing for more accurate pricing of

CBOE options.

2. Statutory Basis

The Exchange represents that the

proposed rule change is consistent with

Section 6(b)(5) of the Act 5 in that it

would remove impediments to and

perfect the mechanism of a free and

open market in a manner consistent

with the protection of 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 inappropriate burden on

competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

No written comments were either

solicited or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of the publication of

this notice in the Federal Register or

within such longer period (i) as the

Commission may designate up to 90

days of such date if it finds such longer

period to be appropriate and publishes

its reasons for so finding or (ii) as to

which the self-regulatory organization

consents, the Commission will:

(A) By order approve the proposed

rule change, or

(B) Institute proceedings to determine

whether the proposed rule change

should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 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 at

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–97–49 and should be

submitted by December 22, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–31388 Filed 11–28–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39342; File No. SR–CHX–

97–29]

Self-Regulatory Organizations; Notice

of Filing of and Order Granting

Accelerated Approval to Proposed

Rule Change by the Chicago Stock

Exchange, Incorporated Relating to a

Policy of the Specialist Assignment

and Evaluation Committee

November 21, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

October 27, 1997, the Chicago Stock

Exchange, Incorporated (‘‘CHX’’ or

‘‘Exchange’’) filed with the Securities

and Exchange Commission

(‘‘Commission’’) the proposed rule

change as described in Items I and II

below, which Items have been prepared

by the self-regulatory organization. The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons and to

grant accelerated approval to the

proposed rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange proposes to amend

Article XXX, Rule 1, Interpretation and

policy .01 to amend the current one-year

pilot program concerning a policy of the

Exchange’s Committee on Specialist

Assignment and Evaluation (‘‘CSAE’’)

relating to the time periods for which a

co-specialist must trade a security

before deregistering as the specialist for

the security. This change would be in

effect for the remainder of the current

one-year pilot program.

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 III 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

On September 8, 1997, the

Commission approved a rule change on

a one year pilot basis relating to the time

periods for which a co-specialist must

trade a security before deregistering as

the specialist for the security.2 The pilot

program currently expires on

September, 1998. The purpose of the

proposed rule change is to make a slight

modification to this pilot program.

The Exchange’s CSAE is responsible

for, among other things, appointing

specialists and co-specialists and

conducting deregistration proceedings