57636 Federal Register / Vol. 65, No. 186 / Monday, September 25, 2000 / Notices

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

2 17 CFR 240.19b–4.

3See 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.

4See 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).

actions based on its review, including,

if appropriate, the institution of

procedures designed to assure that

purchases of securities from Affiliated

Underwritings are in the best interests

of shareholders.

7. The Unaffiliated Fund shall

maintain and preserve permanently in

an easily accessible place a written copy

of the procedures described in the

preceding condition, and any

modifications, and shall maintain and

preserve for a period not less than six

years from the end of the fiscal year in

which any purchase from an Affiliated

Underwriting occurred, the first two

years in an easily accessible place, a

written record of each purchase made

once an investment by an Acquiring

Company in the securities of an

Unaffiliated Fund exceeds the limits of

section 12(d)(1)(A)(i) of the Act, setting

forth from whom the securities were

acquired, the identity of the

underwriting syndicate’s members, the

terms of the purchase, and the

information or materials upon which

the board’s determinations were made.

8. Prior to an investment in an

Unaffiliated Fund in excess of the limit

in section 12(d)(1)(A)(i), the Acquiring

Company and the Unaffiliated Fund

will execute an agreement stating,

without limitation, that the Unaffiliated

Fund understands the terms and

conditions of the order and agrees to

fulfill its responsibilities under the

order. At the time of its investment in

shares of an Unaffiliated Fund in excess

of the limit in section 12(d)(1)(A)(i), an

Acquiring Company will notify the

Unaffiliated Fund of the investment. At

such time, the Acquiring Company also

will transmit to the Unaffiliated Fund a

list of the names of each Acquiring

Company Affiliate and Underwriting

Affiliate. The Acquiring Company will

notify the Unaffiliated Fund of any

changes to the list as soon as reasonably

practicable after a change occurs. The

Unaffiliated Fund and the Acquiring

Company will maintain and reserve a

copy of the order, the agreement, and

the list with any updated information

for a period not less than 6 years from

the end of the fiscal year in which any

investment occurred, the first 2 years in

an easily accessible place.

9. Prior to approving any advisory

contract under section 15 of the Act, the

board of directors of each Fund of

Funds, including a majority of the

disinterested directors, must find that

the advisory fees charged under the

contract are based on services that are

in addition to, rather than duplicative

of, services provided to Underlying

Funds in which the Fund of Funds will

invest. This finding and the basis upon

which the finding was made, will be

recorded fully in the minute books of

the Fund of Funds.

10. The Adviser to a Fund of Funds

or trustee or depositor of a Trust of

Funds will waive or offset fees

otherwise payable by the Acquiring

Company to the Adviser or trustee or

depositor in an amount at least equal to

any compensation (included 12b–1

Fees) received by the Adviser or trustee

or depositor, or an affiliated person of

the Adviser or trustee or depositor, from

an Unaffiliated Fund in connection with

the investment by an Acquiring

Company in the Unaffiliated Fund.

11. With respect to any investment in

an Underlying Fund by an Acquiring

Company that is not a separate account,

any sales charges, distribution-related

fees, and/or services fees charged with

respect to shares of an Acquiring

Company, when aggregated with any

sales charges, distribution-related fees,

and/or service fees paid by the

Acquiring Company with respect to its

acquisition, holding, or disposition of

shares of an Underlying Fund, will not

exceed the limits set forth in rule 2830

of the NASD Conduct rules.

12. No Underlying Fund will acquire

securities of any other investment

company in excess of the limits

contained in section 12(d)(1)(A) of the

Act.

For the SEC, by the Division of Investment

Management, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–24547 Filed 9–22–00; 8:45 am]

BILLING CODE 8010–01–M

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.

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

Federal Register / Vol. 65, No. 186 / Monday, September 25, 2000 / Notices 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 MarketMaker 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

5For 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, CashSettled 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:

57638 Federal Register / Vol. 65, No. 186 / Monday, September 25, 2000 / Notices

6See Securities Exchange Act Release No. 43233

(Aug. 30, 2000) (approving File No. SR–Amex–00–

03).

Number of [violations] offensesMaximum number of transactions during a particular month with respect to which 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 twentyfifth (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

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.

Federal Register / Vol. 65, No. 186 / Monday, September 25, 2000 / Notices 57639

7See CBOE Rule 17.50(e).

8 15 U.S.C. 78f(b).

9 15 U.S.C. 78f(b)(5).

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

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.

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.

57640 Federal Register / Vol. 65, No. 186 / Monday, September 25, 2000 / Notices

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). 12See Securities Exchange Act Release No. 43233

(Aug. 30, 2000) (approving File No. SR–Amex–00–

03).

13 15 U.S.C. 78s(b)(2).

14 Id.

15 17 CFR 200.30–3(a)(12).

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.

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.

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.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.15

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–24506 Filed 9–22–00; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

Reporting and Recordkeeping

Requirements Under OMB Review

AGENCY: Small Business Administration.

ACTION: Notice of reporting requirements

submitted for OMB review.

SUMMARY: Under the provisions of the

Paperwork Reduction Act (44 U.S.C.

Chapter 35), agencies are required to

submit proposed reporting and

recordkeeping requirements to OMB for

review and approval, and to publish a

notice in the Federal Register notifying

the public that the agency has made

such a submission.

DATES: Submit comments on or before

October 25, 2000. If you intend to

comment but cannot prepare comments

promptly, please advise the OMB

Reviewer and the Agency Clearance

Officer before the deadline.

Copies: Request for clearance (OMB

83–1), supporting statement, and other

documents submitted to OMB for

review may be obtained from the

Agency Clearance Officer.

ADDRESSES: Address all comments

concerning this notice to: Agency

Clearance Officer, Jacqueline White,

Small Business Administration, 409 3rd

Street, SW., 5th Floor, Washington, DC

20416; and OMB Reviewer, Office of

Information and Regulatory Affairs,

Office of Management and Budget, New

Executive Office Building, Washington,

DC 20503.

FOR FURTHER INFORMATION CONTACT:

Jacqueline White, Agency Clearance

Officer, (202) 205–7044.

SUPPLEMENTARY INFORMATION:

Title: Prime ‘‘Program for Investment

in Microenterpreneurs’’.

No: N/A.

Frequency: On Occasion.

Description of Respondents:

Disadvantage Entrepreneurs.

Annual Responses: 500.

Annual Burden: 40,000.

Jacqueline White,

Chief, Administrative Information Branch.

[FR Doc. 00–24542 Filed 9–22–00; 8:45 am]

BILLING CODE 8025–01–P

SMALL BUSINESS ADMINISTRATION

[Declaration of Disaster #3295]

State of California

As a result of the President’s major

disaster declaration on September 14,

2000, I find that Napa County,

California constitutes a disaster area due

to damages caused by an earthquake

that occurred on September 3, 2000.

Applications for loans for physical

damage as a result of this disaster may

be filed until the close of business on

November 13, 2000, and for loans for

economic injury until the close of

business on June 14, 2001 at the address

listed below or other locally announced

locations: U.S. Small Business

Administration, Disaster Area 4 Office,

P. O. Box 13795, Sacramento, CA

95853–4795.

In addition, applications for economic

injury loans from small businesses

located in the contiguous counties of

Lake, Solano, Sonoma, and Yolo may be

filed until the specified date at the

above location.

The interest rates are:

Percent

For Physical Damage:

Homeowners with credit available elsewhere ...................... 7.375

Homeowners without credit

available elsewhere ............... 3.687

Businesses with credit available

elsewhere .............................. 8.000

Businesses and non-profit organizations without credit available elsewhere ...................... 4.000

Others (including non-profit organizations) with credit available elsewhere ...................... 6.750

For Economic Injury:

Businesses and small agricultural cooperatives without

credit available elsewhere ..... 4.000

The numbers assigned to this disaster

are 329502 for physical damage and

9I8400 for economic injury.

(Catalog of Federal Domestic Assistance

Program Nos. 59002 and 59008)