8474 Federal Register / Vol. 62, No. 37 / Tuesday, February 25, 1997 / Notices

7 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3This filing only addresses trading requirements

relating to necessary surveillance sharing

procedures.

publishes its reasons for so finding or

(ii) as to which the self-regulatory

organization consents, the Commission

will:

(A) by order such 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 coping 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–96–73 and should be

submitted by March 18, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–4529 Filed 2–24–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38311; International Series

Release No. 1055; File No. SR–CBOE–96–

77]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change by the Chicago Board

Options Exchange, Incorporated

Relating to the Policy of the CBOE

Relating to Information Obtained

Pursuant to the SEC’s Memorandum of

Understanding With the CONSOB

February 19, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on December

17, 1996, the Chicago Board Options

Exchange, Incorporated (‘‘CBOE’’ or

‘‘Exchange’’) filed with the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’) the proposed rule

change is described in Items I and II

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 and to grant

accelerated approval of the proposed

rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The CBOE is submitting this rule

filing to adopt an official policy

concerning the circumstances and

conditions under which the Exchange,

in order to carry out its market

surveillance and enforcement functions

for derivative products containing

Italian component securities, may

obtain access to information regarding

activity on the Italian securities markets

obtained by the SEC pursuant to the

Commission’s Memorandum of

Understanding (‘‘MOU’’) with the

Commissione Nazionale per le Societa e

la Borsa (‘‘CONSOB’’). The text of the

proposed rule change is available at the

Office of the Secretary, the 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, the Proposed Rule

Change

The CBOE does not have a

surveillance sharing agreement with the

Milan Exchange, which is an

unincorporated association and is not

able under Italian law to enter into such

an arrangement. Therefore, the purpose

of the proposed rule change is to enable

the CBOE to carry out its market

surveillance and enforcement functions

for derivative products containing

Italian component securities by seeking

the necessary information about activity

on the Italian securities markets from

the SEC per the latter’s MOU with the

CONSOB. The Exchange’s proposed

policy details the circumstances and

conditions under which the Exchange

may obtain access to such information

from the SEC. By adopting this policy,

therefore, the Exchange believes it will

be in a position to list derivative

products containing Italian component

securities because it will be able to have

access to information on the underlying

securities which it may need for

enforcement or market surveillance

purposes.

The Exchange’s proposed policy

provides that the Exchange will advise

the SEC of information it needs

regarding activity on the Italian

securities markets for market

surveillance and enforcement purposes.

The SEC, in turn, may request the

CONSOB’s assistance, pursuant to the

MOU, in gaining access to such

information. The Exchange will use

such information it may receive from

the SEC only for the purposes of

conducting market surveillance and

enforcement proceedings. The Exchange

will limit distribution of such

information to officers and directors of

the Exchange and other employees

directly responsible for conducting

market surveillance and enforcement

proceedings relating to the matter in

connection with which the SEC

provided the information to the CBOE.

The Exchange also will undertake to

maintain the confidentiality of the

information and to take appropriate

disciplinary action in the event it learns

of a breach of such confidentiality,

including referral to the SEC for any

action the SEC deems necessary or

appropriate.

By adopting a policy that provides

access to information on the underlying

securities for market surveillance and

enforcement purposes, the Exchange

will be able to list options and other

derivative products containing Italian

component securities, provided that all

other applicable product listing

standards are met.3 Therefore, the

Exchange believes that the proposed

rule change could potentially provide

investors with the opportunity to invest

in such products and hedge their

exposure to the Italian securities market.

The Exchange also believes that the

proposed rule change, therefore, is

consistent with and furthers the

objectives of Section 6(b)(5) of the Act,

in that it is designed to perfect the

mechanisms of a free and open market
Federal Register / Vol. 62, No. 37 / Tuesday, February 25, 1997 / Notices 8475

4 In approving the rule, 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. 78f(b) and 78f(b)(5).

6 15 U.S.C. 78s(b)(2).

7 17 CFR 200.30–3(a)(12).

and to protect investors and the public

interest.4

B. Self-Regulatory Organization’s

Statement on Burden on Competition

CBOE 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. Commission’s Findings and Order

Granting Accelerated Approval of

Proposed Rule Change

The Exchange has requested that the

proposed rule change be given

accelerated effectiveness pursuant to

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

the proposal is consistent with Section

6(b) of the Act, in general and, Section

6(b)(5),5 in particular, as it is designed

to facilitate transactions in securities, to

promote just and equitable principles of

trade, and to protect investors and the

public interest.

Specifically, the Commission believes

that, since the CBOE does not and

cannot have a surveillance sharing

agreement with the Milan Exchange, the

CBOE’s adoption of the proposed policy

will enable the Exchange to carry out its

market surveillance and enforcement

functions for derivative products

containing Italian component securities

by seeking the necessary information

about activity on the Italian securities

markets from the SEC per the latter’s

MOU with the CONSOB. The

Commission believes that the

Exchange’s proposed policy adequately

details the circumstances and

conditions under which the Exchange

may obtain access to such information

from the SEC.

The Commission believes that, under

the Exchange’s proposed policy, the

Exchange will advise the SEC of

information it needs regarding activity

on the Italian securities markets for

market surveillance and enforcement

purposes. The Commission, in turn,

may request the CONSOB’s assistance,

pursuant to the MOU, in gaining access

to such information. The Commission

notes that the Exchange will use such

information it may receive from the SEC

only for the purposes of conducting

market surveillance and enforcement

proceedings. The Commission also

notes that the Exchange will limit

distribution of such information to

officers and directors of the Exchange

and other employees directly

responsible for conducting market

surveillance and enforcement

proceedings relating to the matter in

connection with which the SEC

provided the information to the CBOE.

In view of the importance of

maintaining the confidentiality of this

information, the SEC believes that the

officers and/or directors overseeing the

exchange employees conducting the

relevant market surveillance and

enforcement proceedings would be

responsible for ensuring the

confidentiality of the information

provided by the SEC pursuant to the

MOU with the CONSOB and should

take reasonable measures to ensure that

the information does not become

available to unauthorized persons.

Thus, the Commission believes that the

Exchange will undertake to maintain the

confidentiality of such information and

to take appropriate disciplinary action

in the event it learns of a breach of such

confidentiality, including referral to the

SEC for any action the SEC deems

necessary or appropriate.

The Commission believes that the

CBOE, by adopting a policy that

provides access to information on the

underlying securities for market

surveillance and enforcement purposes,

will be in a position to list options and

other derivative products containing

Italian component securities, provided

that all other applicable product listing

standards are met. Therefore, the

Exchange’s proposed rule change could

potentially provide investors with the

opportunity to invest in such products

and hedge their exposure to the Italian

securities market. Accordingly, the

Commission believes that the proposed

rule change is consistent with and

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

of the Act, in that it is designed to

perfect the mechanisms of a free and

open market and to protect investors

and the public interest.

The Commission notes that a

substantially identical proposal was

published by the American Stock

Exchange (‘‘AMEX’’) for the full 21 day

comment period without any comments

being received by the Commission. The

Commission therefore believes that

approving the CBOE policy on an

accelerated basis will allow the

Exchange to pursue trading in options

and other derivative products

containing Italian component securities

without further delay. Accordingly, the

Commission finds that, consistent with

Section 6(b)(5) of the Act, good cause

exists to approve CBOE’s proposed rule

change on an accelerated basis prior to

the thirtieth day after the date of

publication thereof in the Federal

Register.

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 CBOE. All

submissions should refer to File No.

SR–CBOE–96–77 and should be

submitted by March 18, 1997.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,6 that the

proposed rule change (SR–CBOE–96–

77) is hereby approved on an

accelerated basis.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–4605 Filed 2–24–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38302; File No. SR–GSCC–

96–14]

Self-Regulatory Organizations;

Government Securities Clearing

Corporation; Notice of Filing of

Proposed Rule Change To Eliminate

Grandfather Privileges

February 18, 1997.

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

Securities Exchange Act of 1934