[Federal Register Volume 62, Number 32 (Tuesday, February 18, 1997)]
[Notices]
[Pages 7285-7286]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3918]


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SECRUTIES AND EXCHANGE COMMISSION

[Release No. 34-38262; File No. SR-CBOE-97-05]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Board Options 
Exchange, Incorporated Relating to Waiver of Transaction Charges for 
FLEX Equity Options

February 10, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on January 30, 1997, the 
Chicago Board Options Exchange, Incorporated (``CBOE'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'' or 
``SEC'') the proposed rule change as described in Items I, II, and III 
below, which Items have been prepared by the CBOE. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The CBOE proposes to extend its waiver of Exchange fees on 
transactions in Equity FLEX options traded on the Exchange until 
further notice. 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 CBOE 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 CBOE 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, Proposed Rule Change

Purpose
    In conjunction with the start of trading of FLEX Equity options, 
the Exchange waived Exchanges fees related to transactions in Equity 
FLEX until January 31, 1997. The Exchange has now determined to extend 
the waiver of the transaction fees because the Exchange believes that 
the waiver will encourage trading in this new product and will place 
the Exchange in a position to compete effectively for business in 
Equity FLEX options with other exchanges trading the same product.
    The Exchange intends to establish transaction charges for FLEX 
Equity options at some time in the future.\2\ However, the Exchange is 
now proposing to waive the transaction fees until further notice. The 
fees affected and the amount of the fees absent any reduction or rebate 
\3\ are: (1) Exchange transaction fees, which are $.05 per contract 
side for market-makers, $.06 for member firm proprietary trades, $.15 
for customer trades for options under $1, and $.30 for customer trade 
for options of $1 or more; (2) trade match fees, which are $.04 per 
contract side for all trades; and (3) floor broker fees, which are $.03 
per contract side for all trades. The forgoing fee changes are being

[[Page 7286]]

implemented by the Exchange pursuant to CBOE Rule 2.22.
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    \2\ The Commission notes that any imposition of transaction 
charges for FLEX Equity Options would have to be submitted to the 
Commission pursuant to Section 19(b) of the Act.
    \3\ The fees may actually be less than these amounts pursuant to 
the Exchange's Prospective Fee Reduction Schedule, the Customer 
Large Trade Discount Program, and rebate programs that have been 
filed with the Commission as part of the Exchange's fee schedule.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \4\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act \5\ in particular, in that it 
is designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in 
facilitating transactions in securities, and to remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5)
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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

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing rule change establishes or changes a due, 
fee, or other charge imposed by the Exchange, it has become effective 
pursuant to Section 19(b)(3)(A) \6\ of the Act and subparagraph (e) of 
Rule 19b-4 \7\ thereunder. 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.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(e).
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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 in the 
Commission's Public Reference Section, 450 Fifth Street, N.W., 
Washington, D.C. 20549. Copies of such filing will also be available 
for inspection and copying at the principal office of the CBOE. All 
submissions should refer to File No. SR-CBOE-97-05 and should be 
submitted by March 11, 1997.

    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. 97-3918 Filed 2-14-97; 8:45 am]
BILLING CODE 8010-01-M