[Federal Register Volume 65, Number 186 (Monday, September 25, 2000)]
[Notices]
[Pages 57636-57640]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-24506]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43250; File No. SR-CBOE-00-37]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Partial Accelerated Approval of Proposed Rule Change by the 
Chicago Board Options Exchange, Inc. Relating to the Reporting of 
Options Transactions

September 6, 2000.
    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 August 11, 2000, the Chicago Board Options Exchange, Inc. (``CBOE'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change relating to the 
reporting of options transactions. The CBOE filed Amendment No. 1 to 
the proposed rule change on August 23, 2000.\3\ On September 6, 2000, 
the CBOE filed Amendment No. 2 to the proposed rule change.\4\ The 
proposed rule change, as amended, is described in Items I, II, and III 
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 and to grant partial accelerated 
approval to that portion of the proposal that amends CBOE Rule 6.51.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Jaime Galvan, Attorney, Legal Division, CBOE 
to Deborah Flynn, Senior Special Counsel, Division of Market 
Regulation (``Division''), Commission, dated August 22, 2000 
(``Amendment No. 1''). Amendment No. 1 moves certain proposed 
language from Interpretation and Policy .01 of CBOE Rule 6.51 to the 
body of CBOE Rule 6.51. The CBOE also requested accelerated approval 
of the portion of the proposal that amended CBOE Rule 6.51.
    \4\ See letter from Jaime Galvan, Attorney, Legal Division, CBOE 
to Deborah Flynn, Senior Special Counsel, Division, Commission, 
dated September 5, 2000 (``Amendment No. 2''). In Amendment No. 2, 
the CBOE confirmed that the failure to report an options transaction 
within 90 seconds of execution would be considered a violation of 
CBOE Rule 6.51. Amendment No. 2 also deletes footnote 5 to Exhibit 
1, which defined the term ``offense'' for purposes of CBOE Rule 
17.50(g)(4) as the first instance that a pattern or practice of late 
reporting or failure to report has been determined. In Amendment No. 
2, the Exchange proposes to add a similar footnote to the text of 
CBOE Rule 17.50(g)(4).
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Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend CBOE Rule 6.51, ``Reporting 
Duties,'' to require the reporting of options transactions within 90 
seconds. In addition, the proposed rule change would amend CBOE Rule 
17.50, which set forth the CBOE's minor rule violation find plan. The 
text of the proposed rule change, as amended, follows. New text is 
italicized and deleted text is bracketed.

Chicago Board Options Exchange, Incorporated Rules

* * * * *

Chapter VI--Doing Business on the Exchange Floor

* * * * *

Section C: Trading Practices and Procedures

Rule 6.51. Reporting Duties

    (a) Designated member must report transaction. (i) A participant 
in each transaction to be designated by the Exchange [shall 
immediately] must report or ensure the transaction is reported to 
the Exchange within 90 seconds of the execution in a form and manner 
prescribed by the Exchange so that the trade information may be 
reported to

[[Page 57637]]

time and sales reports. (ii) Transactions not reported within 90 
seconds after execution in accordance with Rule 6.51(a)(i) shall be 
designated as late. A pattern or practice of late reporting without 
exceptional circumstances may be considered conduct inconsistent 
with just and equitable principles of trade and subject to summary 
fine under Rule 17.50 or to discipline by the Business Conduct 
Committee.
    (b)-(d) Unchanged.

Chapter XVII--Discipline

* * * * *

Rule 17.50. Imposition of Fines for Minor Rule Violations

    (a) Unchanged.
    (b) In any action taken by the Exchange pursuant to this Rule, 
any person against whom a fine is imposed shall be served, as 
provided in Exchange Rule 17.12, with a written statement, prepared 
by the Exchange, setting forth: (i) the rule(s) allegedly violated; 
(ii) the act or omission constituting each such violation; (iii) the 
fine imposed for each violation; and (iv) the date by which such 
determination becomes final and such fine must be paid or contested 
as provided below, which date shall be not less than thirty (30) 
days after the date of service of such written statement. [A copy of 
such written statement shall be sent contemporaneously to the 
Clearing Member previously designated by the person fined pursuant 
to Exchange Rule 3.23.]
    (c)(1) Any person against whom a fine is imposed pursuant to 
subsection (g)(1), (g)(2), (g)(3), (g)(4), [(g)(5),] or (g)(8) [or 
(g)(9)] of this Rule and any person against whom a fine exceeding 
$2,500 is imposed pursuant to subsection (g)[(6)] (5) of this Rule 
may contest the Exchange's determination by filing with the Office 
of the Secretary of the Exchange, on or before the date specified 
pursuant to subsection (b)(iv) of this Rule, a written answer as 
provided in Exchange Rule 17.5, at which point the matter shall 
become subject to review by the Business Conduct Committee. The 
filing must include a request for a hearing, if a hearing is 
desired. Hearings will be conducted in accordance with the 
provisions of Exchange Rule 17.6. If a hearing is not requested, the 
review will be based on written submissions and will be conducted in 
a manner to be determined by the Business Conduct Committee.
    (2)-(4) Unchanged.
    (d)(1) Any person against whom a fine not exceeding $2,500 is 
imposed pursuant to subsection (g)[(6)](5) of this Rule and any 
person against whom a fine is imposed pursuant to subsection 
(g)[(7)](6) of this Rule may contest the Exchange's determination by 
filing with the Secretary of the Exchange, on or before the date 
specified pursuant to subsection (b)(iv) of this Rule, a written 
application in accordance with the provisions of Exchange Rule 
19.2(a), at which point the matter shall become subject to review by 
the Appeals Committee. The application must include a request for a 
hearing, if a hearing is desired. Except as otherwise provided 
herein, the procedures applicable to such an appeal shall be 
governed by Chapter 19. Any petitions for an extension of time in 
which to file an application must comply with and shall be governed 
by the provisions of Exchange Rule 19.2, and any such petition must 
be filed with the Secretary of the Exchange on or before the date 
specified pursuant to subsection (b)(iv) of this Rule in order to be 
eligible for consideration. Procedures applicable to all other time 
limit extensions shall be governed by Exchange Rule 19.6(b). 
Hearings will be conducted in accordance with the provisions of 
Exchange Rules 19.3 and 19.4. If a hearing is not requested, the 
review will be based on written submissions and will be conducted in 
a manner to be determined by the Appeals Committee.
    (2)-(4) Unchanged.
    (e)-(f) Unchanged. (g)
    (1)-(3) Unchanged.
    (4) Failure to submit accurate trade information and failure to 
submit trade information to the price reporters. (Rule 6.51)
    (a) A fine shall be imposed upon a Market-Maker or Floor Broker 
who fails to submit trade information in accordance with Rule 6.51. 
[executes at least five (5) transactions on each of at least ten 
(10) different trading days during any month and who submits 
inaccurate or no transaction times to the Exchange for a significant 
percentage of transactions executed during month.] Such fines shall 
be imposed on the basis of the following schedule:

                 [Percentage of] Number of Offenses \5\
------------------------------------------------------------------------
 [Inaccurate Times] in any Rolling Twelve-Month
                     Period                            Fine amount
------------------------------------------------------------------------
[20% or more, but less than 30%] 1st Offense...               $[100] 500
[30% or more, but less than 40%] 2nd Offense...              [250] 1,000
[40% or more] Subsequent Offenses..............             [500] 2,500
------------------------------------------------------------------------
\5\ For purposes of CBOE Rule 17.50(g)(4), an ``offense'' would be
  defined as an instance in which a pattern or practice of late
  reporting or failure to report without exceptional circumstances has
  been determined. See Amendment No. 2, supra.

    [(b) If, in any eighteen (18) calendar month period, a Market-
Maker or Floor Broker incurs two (2) fines under subsection (a) 
hereof, any subsequent fine imposed hereunder for any month during 
such eighteen (18) month period shall be equal to the sum of (i) the 
appropriate fine amount under subsection (a) and (ii) an amount 
equal to the total fine most recently incurred under this subsection 
(b) during such eighteen (18) month period.]
    [(5) Failure to Submit Trade Information to the Price Reporter. 
(Rule 6.51)]
    [(a) A Market-Maker or Floor Broker who executes at least 
twenty-five (25) sale transactions during any month and who fails to 
submit required information to the price reporter for a significant 
percentage of transactions executed during such month shall be 
subject to the following fines:]

Percentage of sale transaction for applicable month that were not 
submitted to price reporting
Per Market Data Retrieval Reports--Fine

30% or more, but less than 40%.................................     $300
40% or more, but less than 50%.................................      500
50% or more....................................................    1,000
 

    (b) If, in any eighteen (18) calendar month period, a Market-
Maker or Floor Broker incurs two (2) fines under subsection (a) 
hereof, any subsequent fine imposed hereunder for any month during 
such eighteen (18) month period shall be equal to the sum of (i) the 
appropriate fine amount under subsection (a) and (ii) an amount 
equal to the total fine incurred under this subsection (b) during 
such eighteen (18) month period.]
    [(6)](5) Violations of Trading Conduct and Decorum Policies 
(Rule 6.20) Unchanged.
    [(7)](6) Failure to Submit Trade Data on Trade Date (``As of 
Adds'') (Rule 6.51) Unchanged.
    [(8)](7) Violations of Exercise and Exercise Advice Rules for 
Noncash-Settled Equity Options (Rule 11.1, Interpretation and Policy 
.06) Unchanged.
    [(9)](8) Violations of Exercise and Exercise Advice Rules for 
American-Style, Cash-Settled Index Options (Rule 11.1, 
Interpretation and Policy .03) Unchanged.
    * * * Interpretations and Policies:
    .01 Unchanged.
    [.02 A time submitted for a transaction pursuant to subsection 
(g)(4) of this Rule shall generally be considered accurate if such 
time is within five minutes of either (a) the time submitted by the 
other party to the transaction or (b) the time the transaction was 
disseminated by the Exchange's price reporter, provided that trading 
in the relevant contract was eligible to take place during such 
times.]
    [.03].02 (a) The Exchange shall attempt to serve members fined 
pursuant to subsection (g)(4) [or (g)(5)] of this Rule with a 
written statement in accordance with section (b) of this Rule [on or 
before the tenth (10th) day of] within the month immediately 
following the month in which the violations were alleged to have 
occurred. Such members may, [on or before the twenty-fifth (25th) 
day of the month in which] within fifteen (15) days after such 
service was effected, request verification of the fine by the 
Exchange.
    (b) Notwithstanding the provisions of Interpretation and Policy 
.03 (a) above, there shall be a cap on the number of transactions 
during a particular month with respect to which a member fined 
pursuant to subsection (g)(4) [or (g)(5)] of this Rule may request 
verification. Such cap shall be imposed pursuant to the following 
schedule:

[[Page 57638]]



------------------------------------------------------------------------
                                Maximum number of transactions during a
    Number of [violations]       particular month with respect to which
           offenses             verification may be requested within [an
                                eighteen] a rolling twelve month period
------------------------------------------------------------------------
1-2..........................  No Limit.
3+...........................  The greater of (i) 50 transactions or
                                (ii) 10% of the number of transactions
                                deemed not to be in compliance with Rule
                                17.50(g)(4) [or Rule 17.50(g)(5), as
                                applicable.
------------------------------------------------------------------------

The foregoing cap shall apply separately to fines imposed pursuant 
to subsection (g)(4) of this Rule and to fines imposed pursuant to 
subsection (g)(5) of this Rule.]
    (c) The Exchange shall attempt to serve members fined pursuant 
to subsection (g)[(7)] (6) of this Rule with a written statement in 
accordance with section (b) of this Rule on or before the tenth 
(10th) day of the month immediately following the month in which the 
violations were alleged to have occurred. Such members may, on or 
before the twenty-fifth (25th) day of the month in which such 
service was effected, request verification of the fine by the 
Exchange.
    (d) Unchanged.
    [.04].03 Any fine imposed pursuant to subsection (g)[(6)](5) 
that (i) does not exceed $1,000 and (ii) is not contested, shall not 
be reported by the Exchange to the SEC, except as may otherwise be 
required by Exchange Act Rule 19d-1 and by any other regulatory 
authority.
    [.05].04 The BCC may consolidate into one hearing (i) the review 
of any fine imposed pursuant to Rule 17.50(g)[(6)](5) that exceeds 
$2500 (which would be subject to a hearing under Rule 17.50(c)) and 
(ii) the review of any fine imposed pursuant to Rule 
17.50(g)[(6)](5) that does not exceed $2500 (which would otherwise 
be subject to a hearing under Rule 17.50(d)), if the alleged 
violations that are the subject of the fines involve the same or a 
related transaction or occurrence. In case of a consolidation, the 
procedures governing the disposition of the matter shall be those 
set forth in Rule 17.50(c). If the review of a fine is to be based 
upon written submissions then that review may not be consolidated. 
The BCC may consolidate the review of such matters on its own motion 
or upon request from the Exchange or the subject of one of the 
fines. In the event that the BCC determines to consolidate the 
review of such matters or receives a request to consolidate such 
matters, the BCC will give all parties to the matters that are 
subject to possible consolidation a reasonable opportunity to 
support the consolidation or object to the consolidation in writing. 
In determining whether to consolidate the review of such matters, 
the BCC shall take into account such factors as it deems relevant 
including, but not limited to, the staff resources and time that may 
be saved by the consolidation and whether the consolidation could 
potentially be prejudicial to the parties involved.

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, as 
amended, 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

1. Purpose
    The Exchange proposes to amend CBOE Rule 6.51 to require the 
reporting of options transactions within 90 seconds. The Exchange also 
proposes to amend CBOE Rule 17.50 to (i) consolidate and modify the 
fine schedules for both inaccurate times and unreported sales, (ii) 
eliminate Interpretation and Policy .02 of CBOE Rule 17.50 in 
accordance with the amendments to CBOE Rule 6.51, (iii) revise the time 
period within which members served with a written statement in 
accordance with CBOE Rule 17.50(b) may request verification of the fine 
imposed, and (iv) eliminate the requirement that the Exchange 
contemporaneously send a copy of the written statement to the 
designated clearing member. The Exchange also proposes to issue a 
Regulatory Circular to modify Exchange policy regarding the application 
of CBOE Rule 17.50(g)(4).
    The proposed rule change, as amended, would revise CBOE Rule 6.51 
to require options transactions to be reported within 90 seconds of 
execution. Currently, CBOE Rule 6.51(a) requires the participant 
designated by the Exchange in each transaction to immediately report 
the transaction to the Exchange. Under the proposal, as amended, the 
designated member would be required to report or ensure that the 
transaction is reported to the Exchange within 90 seconds of execution. 
About 85% of options orders currently are electronically routed and 
executed and therefore, are immediately reported and ``printed on the 
tape.'' The Exchange believes that the adoption of a specific standard 
for options trade reporting is appropriate, particularly for those 
options orders routed and executed manually. The Exchange notes that 
the proposed rule change, as amended, is substantially similar to a 
proposed rule change by the American Stock Exchange (``Amex'') that was 
recently approved by the Commission.\6\
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    \6\ See Securities Exchange Act Release No. 43233 (Aug. 30, 
2000) (approving File No. SR-Amex-00-03).
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    The proposed rule change, as amended, would also revise 
Interpretation and Policy .01 of CBOE Rule 6.51 to provide that 
transactions not reported within 90 seconds after execution in 
accordance with CBOE Rule 6.51(a) and Interpretation and Policy .01 
would be designated as late. A pattern or practice of late reporting 
without exceptional circumstances may be considered conduct 
inconsistent with just and equitable principles of trade and subject to 
summary fine under CBOE Rule 17.50 or to discipline by the CBOE's 
Business Conduct Committee.
    Additionally, the proposal would revise CBOE Rule 17.50 to 
consolidate and modify the fine schedules for both failure to submit 
accurate trade information under CBOE Rule 17.50(g)(4) and failure to 
submit trade information to the price reporter under CBOE Rule 
17.50(g)(5). The Exchange proposes to revise Paragraph (g)(4) of CBOE 
Rule 17.50 to provide that a fine will be imposed on a Market-Maker or 
Floor Broker who fails to submit trade information in accordance with 
CBOE Rule 6.51. The fine schedule under CBOE Rule 17.50(g)(4) would be 
replaced with a new fine schedule that would impose fines according to 
the number of offenses committed during any rolling twelve month 
period. Specifically, a first offense would incur a fine amount of 
$500, a second offense would incur a $1,000 fine, and subsequent 
offenses would incur a $2,500 fine.
    The Exchange also proposes to eliminate Interpretation and Policy 
.02 of CBOE Rule 17.50, because under the proposal rule change, as 
amended, the surveillance for late trade reports would be conducted 
pursuant to the provisions of amended Interpretation and Policy .01 of 
CBOE Rule 6.51.
    Moreover, the proposal would revise the time-period within which a 
member served with a written statement pursuant to CBOE Rule 17.50(b) 
can request verification of the fine.

[[Page 57639]]

Currently, CBOE Rule 17.50 Interpretation and Policy .03(a) requires 
the Exchange to attempt to serve members fined pursuant to CBOE Rule 
17.50 with a written statement on or before the tenth day of the month 
immediately following the month in which the violations were alleged to 
have occurred. Fined members may request verification of the fine on or 
before the twenty-fifth day of the month in which service was affected. 
The proposal would amend the time period within which a fined member, 
served with a written statement pursuant to Interpretation and Policy 
.03(a) of CBOE Rule 17.50(b), could request verification of the fine to 
fifteen days after the date of service of the written statement. The 
Exchange believes that this change is necessary to allow staff 
additional time to process account exceptions.
    The Exchange also proposes to amend CBOE Rule 17.50(b) by deleting 
the statement that the Exchange shall contemporaneously send a copy of 
the written statement served on members fined pursuant to CBOE Rule 
17.50 to the clearing member previously designated by the member 
pursuant to Exchange Rule 3.23. The Exchange believes this procedure 
can be eliminated because clearing members are advised of the fine 
imposed on a member through the Exchange's automated billing system.\7\
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    \7\ See CBOE Rule 17.50(e).
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    Finally, the Exchange proposes to issue a Regulatory Circular to 
its membership that, among other things modifies Exchange policy 
regarding the application of CBOE Rule 17.50(g)(4). Specifically, the 
Exchange proposes to modify Exchange policy pertaining to the 
verification process under CBOE Rule 17.50, Interpretation and Policy 
.03. Section (d) of Interpretation and Policy .03 states that 
verification requests will be made in the manner and form required by 
the Exchange. The proposed Regulatory Circular would inform the 
membership that, in accordance with Interpretation and Policy .03(d), 
CBOE market makers who do not utilize a market maker hand-held terminal 
may not request verification of any fine imposed under CBOE Rule 
17.50(g)(4). The Exchange believes that this policy will encourage 
market makers to use hand-held terminals, which, in turn, will help 
prevent instances of late reporting because of illegible handwriting.
    The proposed Regulatory Circular would also modify Exchange policy 
regarding the defenses a member fined pursuant to CBOE Rule 17.50(g)(4) 
could raise. Specifically, the Exchange would notify members that they 
could not defend against a fine imposed pursuant to CBOE Rule 
17.50(g)(4) the claim that a transaction time was inaccurately 
keypunched by a keypunch operator because an order ticket was 
illegible. Finally, the proposed Regulatory Circular would inform the 
membership of the proposed amendments to CBOE Rule 6.51 and CBOE Rule 
17.50 and set forth guidelines to reflect Exchange policy with respect 
to the application of CBOE Rule 17.50(g)(4).
    The Exchange proposes to implement the proposed rule change, as 
amended, six months after its approval by the Commission. The purpose 
of this time interval is to give the Exchange the opportunity to inform 
members of the partial approval of the proposed rule change, as 
amended, in the Exchange's Regulatory Bulletin, through the proposed 
Regulatory Circular, before the rule change is implemented. 
Additionally, the Exchange believes that the six-month interval will 
allow the Exchange to further inform the membership of the imminent 
changes, and to encourage compliance with the rule, by running the 
current exception process side by side with the proposed new exception 
process. During this six month time period, the Exchange's Department 
of Market Regulation will issue a written notice to a member in every 
instance during a subject review period when a time submitted by that 
member would have been determined to be inaccurate based on the new 90 
second reporting criteria and subject to a summary fine notification 
under Rule 17.50(g)(4) for violation of Rule 6.51. The Exchange will 
publish the effective date of the rule change in the proposed 
Regulatory Circular.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\8\ in general, and furthers the 
objectives of Section 6(b)(5),\9\ in particular, in that it is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of change, 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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    \8\ 15 U.S.C. 78f(b).
    \9\ 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 not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received written comments with 
respect to the proposed rule change.

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

    With respect to the portion of the proposed rule change amending 
CBOE Rule 17.50, within 35 days of the date of 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 CBOE 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, including whether the proposed rule 
change, as amended, is consistent with the Act. Persons making written 
submissions should file six copies thereof with the Secretary, 
Securities and Exchange Commission, 450 Fifth Street, NW., Washington, 
DC 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 persons, 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 CBOE. All submissions should refer to File No. 
SR-CBOE-00-37 and should be submitted by October 16, 2000.

[[Page 57640]]

V. Commission's Findings and Order Granting Partial Accelerated 
Approval of Proposed Rule Change

    The Commission finds that the portion of the proposed rule change, 
as amended, relating to the reporting of options transactions within 90 
seconds after execution is consistent with the requirements of the Act 
and the rules and regulations thereunder applicable to a national 
securities exchange.\10\ Specifically, the Commission believes that the 
portion of the proposal, as amended, relating to the reporting of 
options transactions within 90 seconds after execution is consistent 
with the Section 6(b)(5) \11\ requirements that the rules of an 
exchange be designed to promote just and equitable principles of trade, 
to remove impediments to and perfect the mechanisms of a free and open 
market and a national market system, and, in general, to protect 
investors and the public.
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    \10\ In approving this part of the proposal, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \11\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the portion of the amended proposal, 
which requires the reporting of all options transactions within 90 
seconds of execution, should help to prevent fraudulent and 
manipulative acts and practices, as well as to promote just and 
equitable principles of trade. The Commission believes that the portion 
of the proposed rule change, as amended, relating to CBOE Rule 6.51 
should enable the Exchange to provide accurate trade information to 
investors more efficiently. The enhanced transparency associated with 
timely trade reporting should facilitate price discovery for investors 
and assist the CBOE's surveillance of its members' trading in listed 
options.
    The CBOE has requested that the Commission find good cause for 
approving the portion of the proposed rule change, as amended, relating 
to CBOE Rule 6.51 prior to the thirtieth day after the date of 
publication of notice in the Federal Register. The Commission believes 
that the portion of the proposal relating to the reporting of options 
transactions within 90 seconds after execution is substantially similar 
to the Amex proposal to amend Amex rules to require the reporting of 
options transactions within 90 seconds of execution that was recently 
approved by the Commission.\12\ The Amex proposal was noticed for the 
full 21-day comment period and no comments were received. Accordingly, 
the Commission finds good cause pursuant to Section 19(b)(2) of the Act 
\13\ to accelerate approval of the proposed rule change, as amended.
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    \12\ See Securities Exchange Act Release No. 43233 (Aug. 30, 
2000) (approving File No. SR-Amex-00-03).
    \13\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\14\ that the portion of the proposed rule change amending CBOE 
Rule 6.51, to require the reporting of the options transactions within 
90 seconds (File No. SR-CBOE-00-37), is approved on an accelerated 
basis.
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    \14\ Id.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-24506 Filed 9-22-00; 8:45 am]
BILLING CODE 8010-01-M