Federal Register / Vol. 63, No. 83 /Thursday, April 30, 1998 / Notices 23819

4 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4(e)(6).

3The Exchange has represented that the proposed

rule change: (1) Will not significantly affect the

protection of investors or the public interest; (ii)

will not impose any significant burden on

competition; and (iii) will not become operative for

30 days after the date of this filing, unless otherwise

accelerated by the Commission. The Exchange also

has provided at least five business days notice to

the Commission of its intent to file this proposed

rule change, as required by Rule 19b–4(e)(6) under

the Act. Id.

4 15 U.S.C. 78f(b).

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

6 In approving these rules, the Commission has

considered the proposed rule’s impact on

efficiency, competition, and capital formation. 15

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

SR–CBOE–98–09 and should be

submitted by May 21, 1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.4

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–11447 Filed 4–29–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39908; File No. SR–CBOE–

98–14]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Board Options Exchange, Inc.

Relating to the Trading of Stocks,

Warrants and Other Non-Option

Securities

April 24, 1998.

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

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

April 16, 1998, 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 self-regulatory

organization. The Exchange has

designated the proposed rule change as

constituting a ‘‘non-controversial’’ rule

change under paragraph (e)(6) of Rule

19b–4 under the Act 2 which renders the

proposal effective upon receipt of this

filing by the Commission.3 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 proposed to clarify certain

of its rules governing the trading of

stocks, warrants and other non-option

securities.

The text of the proposed rule change

is available at the Office of the

Secretary, CBOE, and at the

Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

self-regulatory organization 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 Self-regulatory organization 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 purpose of the proposed rule

change is to amend certain of CBOE’s

rules applicable to securities traded on

CBOE, other than options. The proposed

revisions are to rules in Chapter XXX,

which governs trading in ‘‘Stocks,

Warrants and Other [non-option]

Securities.’’ The Exchange also is

proposing to add Interpretation and

Policy .04 to Rule 8.80 in order to clarify

the obligations of a Designated Primary

Market-Maker (‘‘DPM’’) acting in respect

of securities other than options. In

conjunction with the implementation of

certain upgrades and enhancements to

the Exchange’s computer system that

will apply to the trading of securities

other than options (the automated

system for trading securities other than

options as enhanced is referred to

herein as the ‘‘System’’), the Exchange

reviewed all of its Chapter XXX rules to

make certain that the rules conformed

with the features of the new System.

Although the Exchange determined that

no substantive changes to its rules were

necessary as a result of this review, the

Exchange did determine to make the

following clarifications to its rules.

Odd Lot Orders

The Exchange has proposed to adopt

new Interpretation and Policy .04 under

rule 8.80 in order to require DPMs to fill

the odd lot portion of a mixed lot order

(an order that includes an odd lot

portion in addition to one or more

round lots) in any security to which

they are assigned at a price determined

in accordance with Interpretation and

Policy .05 under Rule 30.22. That

Interpretation and Policy currently

provides that the odd lot portion of a

PRL (part of round lot) order is to be

filled at the same price as the round lot

portion, and is proposed to be amended

to clarify that if the round lot portion of

a PRL order fills at multiple prices, the

odd lot portion is to be executed at a

price equal to the first round lot

execution. This change is descriptive of

how the System will actually process

the execution of odd lot portions of PRL

orders.

Priority

Rule 30.13(f), which provides for time

priority for bids and offers made at the

same price, is proposed to be amended

to clarify that if a member makes certain

changes to an order, that order will be

considered made at the time of the

change. The following changes will

cause the time of entry of an order to be

updated for time priority purposes: (1)

Changing the price of the order, (2)

increasing the size of the order; (3)

increasing the length of time during

which the order remains subject to

execution; (4) removing or amending

any other contingency applicable to the

order; and (5) causing the order to shift

between types of order books (e.g. from

a round lot to an odd lot order).

2. Statutory Basis

The Exchange represents that the

proposed rule changes are consistent

with Section 6(b) 4 of the Act in general

and further the objectives of Section

6(b)(5) 5 in particular in that, by

clarifying the obligations of DPMs in

respect of odd lot portions of orders and

clarifying the types of changes to orders

that cause the time of the orders to be

updated for purposes of time priority,

they are designed to promote just and

equitable principles of trade and to

protect investors and the public

interest.6

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any inappropriate burden on

competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants, or Others

The Exchange has neither solicited

nor received written comments on the

proposed rule change.
23820 Federal Register / Vol. 63, No. 83 /Thursday, April 30, 1998 / Notices

7 15 U.S.C. 78s(b)(3)(A)(i).

8 17 CFR 240.19b–4(e)(6).

9 17 CFR 200.30–3(a)(12).

1See, letter from Timothy H. Thompson, Director,

Regulatory Affairs, Legal Department, Chicago

Board Options Exchange to Victoria BerberiDoumar, Division of Market Regulation, SEC, dated

April 15, 1998.

2OEX stands for options on the Standard & Poor’s

100 Index.

3 DJX stands for options on the Dow Jones

Industrial Average.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

This proposed rule filing has been

filed by the Exchange as a ‘‘noncontroversial’’ rule change pursuant to

Section 19(b)(3)(A)(i) of the Act 7 and

subparagraph (e)(6) of Rule 19b–4

thereunder.8 Consequently, because the

foregoing proposed rule change: (1)

Does not significantly affect the

protection of investors or the public

interest; (2) does not impose any

significant burden on competition; and

(3) does not become operative until May

17, 1998, more than 30 days from April

16, 1998, the date on which it was filed,

and the Exchange provided the

Commission with written notice of its

intent to file the proposed rule change

at least five days prior to the filing date,

it has become effective pursuant to

Section 19(b)(3)(A) of the Act and Rule

19b–4(e)(6 ) thereunder.

At any time within 60 days of the

filing of the proposed rule change, the

Commission may summarily abrogate

such rule change if it appears to the

Commission that such action is

necessary or appropriate in the public

interest, for the protection of investors,

or otherwise in furtherance of the

purposes of the Act.

IV. 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, 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 also will be

available for inspection and copying at

the principal office of the CBOE. All

submissions should refer to File No.

SR–CBOE–98–14 and should be

submitted by May 21, 1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–11449 Filed 4–29–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39911; File No. SR–CBOE–

98–07]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Board Options Exchange,

Incorporated Relating to the

Committee Responsible for Governing

RAES Participant in SPX

April 24, 1998.

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

Securities Exchange Act of 1934, U.S.C.

78s(b)(1), notice is hereby given that on

February 20, 1998, the Chicago Board

Options Exchange, Incorporated

(‘‘CBOE’’ or the ‘‘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 CBOE. CBOE

filed an amendment on April 15, 1998,

requesting that the filing be handled as

a regular way filing under Section

19(b)(2) of the Act.1 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 change the

Committee responsible for governing

RAES eligibility in options on the

Standard & Poor’s 500 Index (‘‘SPX’’)

from the appropriate Floor Procedure

Committee to the appropriate Market

Performance Committee. The text of the

proposed rule change is available at the

Office of the Secretary, CBOE and at the

Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

CBOE included statements concerning

the purpose of and basis for the

proposed rule change and discussed any

comments it received on the proposed

rule change. The text of these statements

may be examined at the places specified

in Item IV below. The CBOE has

prepared summaries, set forth in

sections A, B, and C below, of the most

significant aspects of such statements.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, Proposed Rule

Change

1. Purpose

The Exchange has decided to change

the body governing eligibility for RAES

in SPX from the appropriate Floor

Procedure Committee to the appropriate

Market Performance Committee.

Currently, SPX is the only options class

in which the issues concerning the

eligibility of market-makers to

participate in RAES is governed by a

Floor Procedure Committee instead of

by a Market Performance Committee.

Rule 8.16 (in the case of option classes

other than OEX 2, SPX, and DJX 3) and

Rule 24.17 (in the case of OEX and DJX

option classes) provide that the

appropriate Market Performance

Committee will govern the RAES

market-maker eligibility issues. This

change, therefore, will make the

regulation of SPX RAES eligibility

consistent with that of the other option

classes traded on the Exchange. The

governance of eligibility issues for SPX

RAES will initially be delegated to the

newly formed Index Market

Performance Committee.

As with the other options classes, the

Index Market Performance Committee

will have authority to exempt marketmarkers from: the requirement that the

market-maker be present in the crowd to

log onto or remain on RAES (Rule

24.16(a)(iii)), the requirement that the

market-maker must log onto RAES at

any time during an expiration month

when he is present in the crowd and

when he has logged on previously

during that expiration month (Rule

24.16(b)), certain requirements

concerning the participation of joint

accounts (Rule 24.16(c)), and certain

requirements concerning the

participation of member organizations

with multiple nominees (Rule 24.16(d)).

The Index Market Performance

Committee will also take over the

broader authority of the SPX Floor

Procedure Committee to set the

maximum number of RAES participants

in RAES groups, to disallow the

participation of certain RAES groups