76686 Federal Register / Vol. 65, No. 236 / Thursday, December 7, 2000 / Notices

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

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 42894

(June 2, 2000), 65 FR 36850 (June 12, 2000). The

pilot program was subsequently extended for an

additional 90 days, ending November 29, 2000. See

Securities Exchange Act Release No. 43229 (August

30, 2000), 65 FR 54572 (September 8, 2000).

4Facilitation cross transactions occur when a

floor broker representing the order of a public

customer of a member firm crosses that order with

a contra side order from the firm’s proprietary

account.

5Amex trading floor practices provided

specialists with a greater than equal participation in

trades that take place at a price at which the

specialist is on parity with registered options

traders in the crowd. These practices are subject to

a separate filing that seeks to codify specialist

allocation practices. See Securities Exchange Act

Release No. 42964 (June 20, 2000), 65 FR 39972

(June 28, 2000)

11. The Participants, at least annually,

shall submit to each Fund’s Board such

reports, materials, or data as the Board

reasonably may request so that the

directors or trustees, as appropriate, of

the Fund may fully carry out the

obligations imposed upon the Board by

the conditions contained in this

application and said reports, materials,

and data shall be submitted more

frequently if deemed appropriate by the

Board. The obligations of the

Participating Insurance Companies and

Qualified Plans to provide these reports,

materials, and data to a Fund’s Board,

when the Board so reasonably requests,

shall be a contractual obligation of all

Participating Insurance Companies and

Qualified Plans under their agreements

governing participation in the Funds.

12. All reports of potential or existing

conflicts received by a Board, and all

Board action with regard to determining

the existence of a conflict, notifying

Participants of a conflict, and

determining whether any proposed

action adequately remedies a conflict,

will be properly recorded in the minutes

of the Board or other appropriate

records, and such minutes or other

records shall be made available to the

Commission upon request.

Conclusion

For the reasons summarized above,

Applicants assert that the requested

exemptions are appropriate in the

public interest and consistent with the

protection of investors and the purposes

fairly intended by the policy and

provisions of the 1940 Act.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–31164 Filed 12–6–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43643; File No. SR–Amex–

00–59]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval to Proposed

Rule Change by the American Stock

Exchange LLC To Extend for an

Additional 90 Days Its Pilot Program

Relating to Facilitation Cross

Transactions

November 29, 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 November

29, 2000, the American Stock Exchange

LLC ( ‘‘Amex’’ or ‘‘Exchange’’ ) field

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 Exchange. The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons. For the

reasons discussed below, the

Commission is granting accelerated

approval of the proposed rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Amex proposes to extend for an

additional 90 days its pilot program

relating to facilitation cross transactions,

described in detail in Part II.A. below.

The text of the proposed rule change is

available at the Office of the Secretary,

Amex, 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

Amex 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 Exchange 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 extend for

an additional 90 days its pilot program

relating to member firm facilitation

cross transactions approved by the

Commission on June 2, 2000.3 Revised

Commentary .02(d) to Amex Rule 950(d)

establishes a pilot program to allow

facilitation cross transactions inequity

options.4 The pilot program entities a

floor broker to, under certain

conditions, cross a specified percentage

of a customer order with a member

firm’s proprietary account before market

makers in the crowd can participate in

the transaction. The provision generally

applies to orders of 400 contracts or

more. However, the Exchange is

permitted to establish smaller eligible

order sizes, on a class basis, provided

that the eligible order size is not for

fewer than 50 contracts.

Under the current program, when a

trade takes place at the market provided

by the crowd, all public customer orders

on the specialist’s book or represented

in the trading crowed at the time the

market was established must be satisfied

first. Following satisfaction of any

customer orders on the specialist’s book,

the floor broker is entitled to facilitate

up to 20% of the contracts remaining in

the customer order. When a floor broker

proposes to execute a facilitation cross

at a price between the best bid and offer

provided by the crowd in response to

his initial request for market—and the

crowd then wants to part or all of the

order at the improved price—the floor

broker is entitled to priority over the

crowd to facilitate up to 40% of the

contracts. If the floor broker has

proposed the cross at a price between

the best bid and offer provided by the

crowd in response to his initial request

for a market, and the trading crowd

subsequently improves the floor

broker’s price, and the facilitation cross

is executed at that improved price, the

floor broker would only be entitled to

priority to facilitate up to 20% of the

contracts.

The program also provides that if the

facilitation transaction takes place at the

specialist’s quoted bid or offer, any

participation allocated to the specialist

pursuant to Amex trading floor practices

would apply only to the number of

contracts remaining after all public

customer orders have been filled and

the member firm’s crossing rights have

been exercised.5 However, in no case

could the total number of contracts

guaranteed to the member firm and the

specialist exceed 40% of the facilitation

transaction.

In the almost six months since the

pilot program began, the Exchange has

found it to be generally successful. The

Exchange seeks to extend the pilot

Federal Register / Vol. 65, No. 236 / Thursday, December 7, 2000 / Notices 76687

6See File No. SR–Amex–00–49, available for

inspection at the Commission’s Public Reference

Room.

7 15 U.S.C. 78s(b)(2).

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

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

10 In approving this proposal, the Commission has

considered the proposed rule’s impact on

efficiency, competition, and capital formation. 15

U.S.C. 78c(f).

11See supra, note 3.

12 15 U.S.C. 78f(b)(5) and (b)(8).

13See, e.g., Securities Exchange Act Release Nos.

42835 (May 26, 2000), 65 FR 35683 (June 5, 2000),

and 42848 (May 26, 2000), 65 FR 36206 (June 7,

2000).

14 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

program for an additional 90 days,

pending consideration of a related

proposed rule change it has filed with

Commission 6 concerning revisions to

the program that the Amex believes will

provide further incentive for price

improvement by using different

procedures to determine specialist and

registered option trader participation.

The related proposal would also make

the program permanent.

Because the pilot program is due to

expire on November 29, 2000, the Amex

has requested that the Commission

expedite review of, and grant

accelerated approval to, the proposal to

extend it, pursuant to Section 19(b)(2) of

the Act.7

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)

of the Act 9 in particular 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 believes that the

proposed rule change will impose no

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. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether the proposed rule

change 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 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

Room. Copies of the filing will also be

available for inspection and copying at

the principal offices of the Exchange.

All submissions should refer to File No.

SR–Amex–00–59 and should be

submitted by December 28, 2000.

IV. Commission Findings and Order

Granting Accelerated Approval of

Proposed Rule Change

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.10 In its original approval of

the pilot program,11 the Commission

detailed its reasons for finding its

substantive features consistent with the

Act, and, in particular, the requirements

of Sections 6(b)(5) and 6(b)(8) of the

Act.12 The Commission has previously

approved rules on other exchanges that

establish substantially similar programs

on a permanent basis,13 and the

extension of the pilot program on the

Amex—pending review of its related

proposal to revise the program and

make it permanent—raises no new

regulatory issues for consideration by

the Commission.

The Commission finds good cause,

consistent with Sections 6(b) and

19(b)(2) of the Act, for approving the

proposed rule change prior to the

thirtieth day after the date of

publication of the notice of filing thereof

in the Federal Register. The proposal

will allow the pilot program, otherwise

due to expire on November 29, 2000, to

remain effective and in place

uninterrupted while revisions are being

considered, and does not raise any new

regulatory issues.

It Is Therefore Ordered, pursuant to

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

proposed rule change be, and hereby is,

approved on an accelerated basis as a

pilot program through February 27,

2001.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.14

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–31138 Filed 12–6–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43639; File No. SR–CBOE–

00–54]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Board Options Exchange,

Inc., Relating to Membership Fees

November 29, 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 November

8, 2000, 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 Exchange.

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 CBOE proposes to amend the

New Member Orientation fee imposed

by the Exchange, which is currently set

forth in the Exchange’s Membership Fee

Circular. The Exchange further proposes

to add certain clarifying language to the

Membership Fee Circular with respect

to the application of the Corporation/

Partnership/LLC fee. The text of the

proposed rule change is available at the

Office of the Secretary of 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 Exchange has