[Federal Register Volume 63, Number 102 (Thursday, May 28, 1998)]
[Notices]
[Pages 29275-29276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-14115]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40021; File No. SR-CBOE-98-12]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change by the Chicago 
Board Options Exchange, Incorporated Relating to Exchange Mandated 
Education Training

May 21, 1998.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934,\1\ notice is hereby given that on April 20, 1998, the Chicago 
Board Options Exchange, Incorporated (``CBOE'' or ``Exchange'') filed 
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 CBOE. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons and to grant accelerated approval on the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The CBOE proposes to add a provision of Exchange Rule 6.20 
Admission to and Conduct on the Trading Floor, Member Education, to 
require that Exchange members and persons associated with Exchange 
members attend mandatory continuing education classes as directed by 
the Exchange. Proposed new language is in italics.

Chicago Board Options Exchange, Inc. Rules

* * * * *

CHAPTER VI

Doing Business on the Exchange Floor

Section B: Member Activities on the Floor

    Admission to and Conduct on the Trading Floor: Member Education
    Rule 6.20(a)--(c)  No change.
    (d) Education Classes. Members and persons associated with members 
are required to attend such educational classes as the Exchange may 
require from time to time. Failure to attend Exchange mandated 
continuing educational classes may subject members and persons 
associated with members to sanctions pursuant to the Exchange's Minor 
Rule Violation provided in Exchange Rule 17.50. Any action taken by 
Floor Officials thereunder shall not preclude further disciplinary 
action by the Business Conduct Committee under Chapter XVII of the 
Rules, except as otherwise provided in Rule 17.50.
    . . . Interpretations and Policies:
    .01-.09  No change.

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 statutory 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 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 is proposing to add a provision to Exchange Rule 6.20, 
Admission to and Conduct on the Trading Floor; Member Education, to 
require that Exchange members and persons associated with Exchange 
members attend mandatory continuing education classes as directed by 
the Exchange. The Exchange believes it is necessary from time to time 
to require mandatory participation in certain educational training 
classes by its members and persons associated with its members for a 
variety of reasons, including to promote professional behavior and 
decorum on the trading floor, or to explain the operation of new 
technology. For example, the Exchange intends to implement a harassment 
awareness training and ethics program for its members and persons 
associated with its members who are present on the trading floor.
    Without this rule change, the Exchange would not have the ability 
to mandate attendance. The Exchange is also proposing to amend its 
Minor Rule Violation fine schedule pursuant to Exchange Rule 
17.50(g)(6). Floor Officials are allowed, pursuant to Rule 17.50(g)(6), 
to fine members and associated persons for violations of trading 
conduct and decorum policies. For failure to attend an Exchange 
mandated continuing educational class, the Exchange proposes a fine of 
$500 for a first offense, $750 for a second offense

[[Page 29276]]

and $1,000 for subsequent offenses. The Exchange believes the amount of 
the fines will be sufficient to ensure attendance. However, in the 
event members refuse to attend even after being assessed a fine, as 
with all Minor Rule violations, the Exchange has the discretion to 
refer violations to the Business Conduct Committee pursuant to Chapter 
XVII of the Exchange's Rules.
2. Statutory Basis
    The proposed rule change will give the Exchange the ability to 
provide for a more professional and informed membership and is 
therefore consistent with and furthers the objectives of Section 
6(b)(5) of the Act \2\ in that it is designed to promote just and 
equitable principles of trade, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and 
to protect investors and the public interest.
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    \2\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE does not believe that the proposed rule change will impose any 
burden on competition.

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

    No written comments were solicited or received with respect to the 
proposed rule change.

III. 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 in the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of CBOE. 
All submissions should refer to the file number (SR-CBOE-98-12) and 
should be submitted by June 18, 1998.

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

    The Commission finds that the CBOE's proposal is consistent with 
the requirements of the Act and the rules and regulations thereunder 
applicable to a national securities exchange. Specifically, the 
Commission finds that, consistent with Section 6(b)(5) of the Act,\3\ 
requiring members and those associated with members to attend 
continuing education classes on such topics as professional conduct and 
the operation of new technology will both promote just and equitable 
principles of trade and benefit investors. Moreover, the Commission 
finds that mandating continuing education training for members and 
persons associated with members is consistent with the provisions of 
Section 6(c)(3)(B) of the Act, which makes it the responsibility of an 
exchange to prescribe standards of training, experience, and competence 
for persons associated with self-regulatory organization members.
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    \3\ 15 U.S.C. 78f(b)(5) requires, among other things, that the 
rules of an exchange be designed to promote just and equitable 
principles of trade and, in general, to protect investors and the 
public interest.
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    The Commission therefor finds good cause for approving the proposed 
rule change prior to the thirtieth day after date of publication of 
notice of filing thereof in the Federal Register.\4\
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    \4\ In approving this rule, the Commission notes that it has 
also considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
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    It is Therefore Ordered, pursuant to Section 19(b)(2) of the 
Act,\5\ that the proposed rule change (SR-CBOE-98-12) be, and hereby 
is, approved.

    \5\ 15 U.S.C. 78s(b)(2).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 98-14115 Filed 5-27-98; 8:45 am]
BILLING CODE 8010-01-M