39610 Federal Register / Vol. 63, No. 141 /Thursday, July 23, 1998 / Notices

6The Exchange represents that it has obtained

real-time access to all EDGAR filings made by

Exchange-listed companies through a ‘‘Level 1’’

subscription with a commercial vendor. Telephone

conversation between Claudia Crowley, Special

Counsel, Amex, and Deborah Flynn, Division of

Market Regulation, Commission, on July 16, 1998.

7The Commission notes that listed companies

will continue to have to file with the Amex paper

copies of certain documents that are not required

by the Commission to be filed through EDGAR.

Such documents include, for example, notices to

shareholders and press release.

8See note 3, supra.

9 15 U.S.C. 78f.

10 15 U.S.C. 78f(b)(5).

11 15 U.S.C. 78s(b)(3)(A)(i).

12 17 CFR 240.19b–4.

13 17 CFR 200.30–3(a)(12).

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

2FLEX equity options are flexible exchangetraded options contracts which overlie equity

securities. In addition, FLEX equity options provide

investors with the ability to customize basic option

features including size, expiration date, exercise

style, and certain exercise prices.

system 6 and will use that access to

continue to monitor and review SEC

filings made by listed companies.

The Exchange is also proposing to

reduce, in certain instances, the number

of copies which still need to be filed

with the Exchange.7 In addition, the

Exchange is proposing to eliminate

Section 1102 (and the reference to that

section in Section 134) because part of

Section 1102 is redundant of provisions

otherwise found in the Company Guide

and the balance more logically falls

within Section 1101.

Finally, the Exchange is proposing to

amend Section 210 to conform it to

amendments which were adopted by the

Commission with respect to SEC Form

8–A.8

2. Statutory Basis

The Amex believes the proposed rule

change is consistent with the

requirements of Section 6(b)(5) of the

Act 9 in general and furthers the

objectives of Section 6(b)(5) 10 in

particular in that it is designed to

promote just and equitable principles of

trade, 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.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

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. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change constitutes

a stated policy, practice, or

interpretation with respect to the

meaning, administration, or

enforcement of an existing rule of the

Exchange and therefore, has become

effective pursuant to Section

19(b)(3)(A)(i) of the Act,11 and

subparagraph (e) of Rule 19b–4

thereunder.12 The Amex will not

implement the proposed rule change

until the Commission approves the

Exchange’s related request for no action

relief providing, among other things,

that exchange-listed issuers filing

documents electronically through the

EDGAR system need not file hard copies

with the Exchange.

At any time within 60 days of the

filing of such 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 NW.,

Washington, DC 20549. Copies of the

submissions, 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, 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 NYSE. All submissions

should refer to File No. SR–Amex–98–

26 and should be submitted by August

13, 1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.13

Jonathan G. Katz,

Secretary.

[FR Doc. 98–19648 Filed 7–22–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40221; File No. SR–CBOE–

98–21]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Board Options Exchange,

Incorporated Relating to Minimum

Opening Transaction Size in FLEX

Equity Options

July 16, 1998.

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

Securities Exchange Act of 1934

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

May 18, 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, II, and

III 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.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The CBOE proposes to change the

required minimum value size for an

opening transaction in any FLEX Equity

Option 2 series which has no open

interest, such that the minimum value

size shall be the lesser of 250 contracts

or the number of contracts overlying $1

million of the underlying 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

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 IV below. The

CBOE has prepared summaries, set forth

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

most significant parts of such

statements.
Federal Register / Vol. 63, No. 141 /Thursday, July 23, 1998 / Notices 39611

3The term ‘‘underlying equivalent value’’ is

defined in CBOE Rule 24A.1(r) for FLEX Index

options, but it is not a defined term for FLEX Equity

options.

4Example amended per conversation between

Gail Marshall-Smith, Division of Market Regulation,

SEC, and Tim Thompson, CBOE, dated June 15,

1998. 5 15 U.S.C. 78f(b)(5).

6 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

Purpose

The Exchange is proposing to change

the minimum value size for opening

transactions (other than FLEX Quotes

responsive to a FLEX Request for

Quotes) in any FLEX Equity Option

series in which there is no open interest

at the time the Request for Quotes is

submitted. Currently, CBOE Rule 24A.4

states that the minimum value size for

these opening transactions shall be 250

contracts. The Exchange is proposing to

change this rule such that the minimum

value size for these transactions shall be

the lesser of 250 contracts or the number

of contracts overlying $1 million of the

underlying securities.

The Exchange is proposing this

change because it believes the current

rule is unduly restrictive. The rule was

originally put in place in to limit

participation in FLEX Equity options to

sophisticated, high net worth

individuals. However, the Exchange

believes that limiting participation in

FLEX Equity Options based solely on

the number of contracts purchased may

diminish liquidity and trading interest

in FLEX Equity Options for higher

priced equities. The Exchange believes

the value of the securities underlying

the FLEX Equity Options is an equally

valid restraint as the number of

contracts and if set at the right limit can

also prevent the participation of

investors who do not have adequate

resources. In fact, the limitation on the

minimum value size for opening

transactions in FLEX Index Options is

tied to the same type of standard, the

underlying equivalent value.3 The

Exchange believes the number of

contracts overlying $1 million in

underlying securities is adequate to

provide the requisite amount of investor

protection. An opening transaction in a

FLEX Equity series on a stock priced at

$40.01 or more would reach this $1

million limit before it would reach the

contract size limit, i.e., 250 contracts

times the multiplier (100) times the

stock price ($40.01) totals $1,000,250

million in underlying value.4 It should

be noted that, currently, an investor can

purchase 250 contracts in a FLEX Equity

series on low priced stocks, meeting the

minimum requirement without

investing a minimum of $1 million. For

example, a purchase of FLEX Equity

Options overlying a $10 stock is

permitted although the underlying value

for the Options would be $250,000, i.e.,

250 contracts times the multiplier (100)

times the stock price ($10).

Statutory Basis

The Exchange believes the proposed

rule change is consistent with and

furthers the objectives of Section 6(b)(5)

of the Act 5 by facilitating transactions

in securities, removing impediments to

and perfecting the mechanism of a free

and open market in securities and

otherwise serving to protect investors

and the public interest. The Exchange

believes that the proposal maintains the

current investor protection principles

while providing more investors an

opportunity to trade FLEX Equity

Options.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The 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. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

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 self-regulatory

organization consents, the Commission

will:

A. By order approve such 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 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

Commission, and all written

communications relating 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 principle office of the CBOE. All

submissions should refer to the file

number SR–CBOE–98–21 and should be

submitted by August 13, 1998.

For the Commission, by the Division of

Market Regulation, pursuant to the delegated

authority.6

Jonathan G. Katz,

Secretary.

[FR Doc. 98–19649 Filed 7–22–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40215; File No. SR–CHX–

96–21]

Self-Regulatory Organizations;

Chicago Stock Exchange,

Incorporated; Order Granting Approval

to Proposed Rule Change and

Amendment No. 1 Thereto and Notice

of Filing and Order Granting

Accelerated Approval to Amendment

No. 2 to the Proposed Rule Change

Relating to ‘‘Stopped’’ Orders

July 15, 1998.

I. Introduction

On July 22, 1996, the Chicago Stock

Exchange, Incorporated (‘‘CHX’’ or

‘‘Exchange’’) submitted to the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’), pursuant to Section

19(b)(1) of the Securities Exchange Act

of 1934 (‘‘Act’’) 1 and Rule 19b–4

thereunder,2 a proposed rule change to

adopt a rule relating to the entry and

execution of stop orders and to clarify

its rules relating to stopped orders. On

August 27, 1996, the CHX submitted to

the Commission Amendment No. 1 to