Federal Register / Vol. 63, No. 145 /Wednesday, July 29, 1998 / Notices 40573

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

2 17 CFR 240.19b–4.

3Securities Exchange Act Release No. 39959 (May

5, 1998), 63 FR 26231.

4See Letter from Scott Van Hatten, Legal Counsel,

Amex, to Michael Walinskas, Deputy Associate

Director, SEC, dated July 9, 1998 (‘‘Amendment No.

1’’). Amendment No. 1 clarified that the Exchange

had received approval to move the close of narrowbased index options trading from 4:10 p.m. to 4:02

p.m., as set forth in Securities Exchange Act Release

No. 38640 (May 14, 1997), 62 FR 28081 (May 22,

1997). Amendment No. 1 also amended the filing

to permit the announcement of closing rotations in

narrow-based index options, in addition to equity

options, after 4:02 p.m.

5Securities Exchange Act Release No. 38640 (May

14, 1997), 62 FR 28081 (May 22, 1997).

6A closing rotation is a trading procedure to

determine appropriate closing prices or quotes for

each series of options on an underlying stock.

7 15 U.S.C. 78f(b)(5).

8 In approving this rule, the Commission notes

that it has considered the proposed rule’s impact on

efficiency, competition, and capital formation. 15

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

9See CBOE Rule 6.2, Interpretations and Policies

.02; PCX Rule 6.64, Commentary .01; and PHLX

Rule 1047, Commentary .03.

materially affecting the value of any

Fund asset or investment, the Manager

may revise the valuation as it, in its sole

discretion, deems appropriate. In

addition, each Manager shall send a

report to each person who was an

investor in its Fund at any time during

the fiscal year then ended, setting forth

such tax information as shall be

necessary for the preparation by the

investor of his or its federal and state

income tax returns and a report of the

investment activities of the Fund during

such year by such date as may be

required to permit investors to comply

with income tax filing requirements

(including extensions).

6. Each Fund and its Manager will

maintain and preserve, for the life of the

Fund and at least two years thereafter,

all accounts, books, and other

documents as constitute the record

forming the basis for the audited

financial statements and annual reports

of such Fund to be provided to the

investors, and agree that all such

records will be subject to examination

by the Commission and its staff. All

required records will be maintained in

an easily accessible place for at least the

first two years.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–20246 Filed 7–28–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40240; File No. SR–Amex–

98–16]

Self-Regulatory Organizations;

American Stock Exchange, Inc.; Order

Approving Proposed Rule Change and

Notice of Filing and Order Granting

Accelerated Approval to Amendment

No. 1 to the Proposed Rule Change

Relating to the Announcement of

Closing Rotations in Equity and

Narrow-Based Index Options After 4:02

p.m.

July 21, 1998.

I. Introduction

On April 8, 1998, the American Stock

Exchange, Inc. (‘‘Amex’’ or ‘‘The

Exchange’’), filed with the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘the Commission’’) a proposed rule

change pursuant to Section 19(b)(1) of

the Securities Exchange Act of 1934

(‘‘Act’’),1 and Rule 19b–4 2 thereunder to

permit a closing rotation in equity

options to be announced after 4:02 p.m.

The proposed rule change was

published for comment in the Federal

Register on May 12, 1998.3 No

comments were received.

On July 9, 1998, the Amex submitted

Amendment No. 1 to the proposed rule

change.4 This order approves the

proposal and approves Amendment No.

1 on an accelerated basis.

II. Description of the Proposal

On May 14, 1997, the Exchange

received approval to move the close of

equity and narrow-based index options

trading from 4:10 p.m. to 4:02 p.m.5

This change was prompted by

improvements in dissemination of

closing prices in the underlying

securities, the limited ability of public

customers to react as quickly as

professional traders to news

announcements in the last ten minutes

of trading, and the difficulties

experienced by options specialists and

registered traders trying to make orderly

options markets without the ability to

hedge or otherwise offset market risk

with transactions in the underlying

stock. Following receipt of approval,

Rule 1 was amended to reflect this

change to 4:02 p.m. The Amex states

that the provision that permits a closing

rotation 6 to be initiated due to unusual

market conditions was severely limited

inadvertently when the rule was

changed to require that notice of the

closing rotation had to be publicly

disseminated before 4:02 p.m. As

currently written, the rule gives Floor

Officials only two minutes to assess an

unusual market condition, determine

whether it is appropriate to have a

closing rotation, and disseminate the

news of the rotation to the public.

The Amex proposes to amend

Exchange Rule 1 to permit a closing

rotation in equity and narrow-based

index options to be announced after

4:02 p.m., provided such a rotation does

not begin sooner than five minutes after

it is announced.

III. Discussion

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, and in particular, Section

6(b)(5).7 Section 6(b)(5) requires, among

other things, that the rules of an

exchange be designed to promote just

and equitable principles of trade, to

perfect the mechanism of a free and

open market, and in general, to further

investor protection and the public

interest.

The Commission believes that it is

reasonable for the Exchange to amend

its rules to provide Floor Officials with

more than two minutes to assess an

unusual market condition, determine

whether it is appropriate to have a

closing rotation, and disseminate the

news of the rotation to the public.8 The

Commission notes that the Chicago

Board Options Exchange (‘‘CBOE’’), the

Pacific Exchange (‘‘PCX’’), and the

Philadelphia Stock Exchange (‘‘PHLX’’)

permit trading rotation notice to be

given after the close of trading.9

The Commission also finds good

cause for approving proposed

Amendment No. 1 prior to the thirtieth

day after the date of publication of

notice of filing thereof in the Federal

Register. The Amendment clarified the

filing’s description of a prior rule

change and the scope of the proposed

rule change. For these reasons, the

Commission finds good cause for

approving Amendment No. 1 on an

accelerated basis.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning Amendment No.

1, including whether it 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.

Copies of the submission, all subsequent

amendments, all written statements

with respect to the proposed rule

change that are filed with the
40574 Federal Register / Vol. 63, No. 145 /Wednesday, July 29, 1998 / Notices

10 15 U.S.C. 78s(b)(2).

11 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3The Exchange filed Amendment Nos. 1 and

Amendment No. 2 to the proposed rule change on

July 14, 1998, and July 15, 1998, respectively. See

Letter from Stephanie C. Mullins, Attorney, CBOE,

to Heather Seidel, Attorney, Division of Market

Regulation (‘‘Division’’), Commission, dated July

13, 1998 (‘‘Amendment No. 1’’); and Letter from

Stephanie C. Mullins, Attorney, CBOE to Kelly

McCormick, Attorney, Division, Commission, dated

July 14, 1998 (‘‘Amendment No. 2’’). Amendment

No. 1 amends the part of the filing relating to fees

charged to non-members to request the

Commission’s approval pursuant to Section 19(b)(2)

under the Act, and to ask for accelerated approval

for that portion of the filing. In Amendment No. 2,

the Exchange explained the procedure for informing

its membership and the affected non-members of

the proposed rule change.

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

5 15 U.S.C. 78f(b)(4).

6The proposed rule change also amends fees

charged to non-members for delivery of the

Exchange Bulletin. The portion of this proposed

ruled change that affects non-members has been

filed pursuant to Section 19(b)(2) of the Act and the

Commission is granting partial accelerated approval

for that part of the filing.

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

8 17 CFR 240.19b–4(e)(2).

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

Section, 450 Fifth Street, NW.,

Washington, DC 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the Amex. All submissions

should refer to the SR–Amex–98–16 and

should be submitted by August 19,

1998.

V. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,10 that the

proposed rule change (SR–Amex–98–

16) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.11

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–20188 Filed 7–28–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40250; File No. SR–CBOE–

98–28]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change, and Notice

of Filing and Order Granting Partial

Accelerated Approval of Proposed

Rule Change by the Chicago Board

Options Exchange, Inc., Relating to

Exchange Fees

July 22, 1998.

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 June 24,

1998,3 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 and II below, which Items have

been prepared by the Exchange. The

Commission is publishing this notice

and order to solicit comments on the

proposed rule change from interested

persons and to grant partial accelerated

approval of the fees relating to nonmembers.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The CBOE is proposing to change the

subscription fee structure for the

Exchange Bulletin by adding a fee for a

new alternative of receiving the Bulletin

via e-mail.

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 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 the

Statutory Basis for, Proposed Rule

Change

1. Purpose

The Exchange proposes to change the

subscription fee structure for members

and non-members receiving the

Exchange Bulletin, and provide for the

option of obtaining the Bulletin via email. The proposed change would be

effective beginning July 1, 1998, for

members. For non-members the fees

would be effective upon the date the

Commission approves that portion of

the proposal. Currently, one hard copy

of the Bulletin is provided free of charge

to all effective members, and each

additional copy is $100.00. For nonmembers, the Bulletin subscription fee

is $100.00 for each hard copy. The

Exchange proposes to give the option of

subscribing to the Bulletin via e-mail

over the Internet to both members and

non-members. Under the proposed

changes a member’s first copy (whether

hard copy or via e-mail) will be free of

charge, and each additional copy via email delivery would be $50.00. The fee

to non-members for e-mail delivery will

be $50.00 for each copy.

2. Basis

The Exchange believes the proposed

rule change is consistent with Section

6(b) of the Act,4 in general, and furthers

the objectives of Section 6(b)(4) of the

Act 5 in particular, in that it is designed

to provide for the equitable allocation of

reasonable dues, fees, and other charges

among CBOE members and others using

the Exchange’s facilities.

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.

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. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Because the foregoing rule change

establishes or changes a due, fee, or

other charge, for members,6 imposed by

the Exchange, the change effecting

members has become effective as of July

1, 1998, pursuant to Section 19(b)(3)(A)

of the Act 7 and subparagraph (e)(2) of

Rule 19b–4 thereunder.8 At any time

within 60 days of the filing of the

proposed rule change, affecting

members, 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