24936 Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices

7 15 U.S.C. 78f(b) (1988 & Supp. v 1993).

8 15 U.S.C. 78s(b)(2) (1988).

9 17 CFR 200.30–3(a)(12) (1994).

requirements of Section 6(b).7 The

Commission believes that the proposed

rule change is consistent with the

Section 6(b)(4) requirements that the

rules of an exchange provide for the

equitable allocation of reasonable dues,

fees, and other charges among its

members and issuer and other persons

using its facilities. Moreover, the

Commission believes the proposal is

consistent with the Section 6(b)(5)

requirements that the rules of an

exchange be designed to promote just

and equitable principles of trade, to

prevent fraudulent and manipulative

acts, and, in general, to protect investors

and the public interest. The

Commission also believes the proposal

is consistent with the Section 6(b)(8)

requirements that the rules of the

exchange do not impose any burden on

competition not necessary or

appropriate in furtherance of the

purposes of the Act.

The Commission believes that the

proposal, which was designed to

encourage routing order flow to the

Exchange, is consistent with the

requirements of the Act because the

proposed rule change is adequately

circumscribed by the limitation on the

aggregate amount of credit that could be

received and does not make executions

off the Exchange prohibitively

expensive. The Commission, however,

will continue to review carefully all

proposed rule changes, especially those

governing fees and credits on fees, for

consistency with, among other things,

the requirements of Sections 6(b)(4),

6(b)(5), and 6(b)(8).

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,8 that the

proposed rule change (SR–BSE–95–04)

is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–11447 Filed 5–9–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35666; File No. SR–CBOE–

95–21]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

Chicago Board Options Exchange,

Inc., Relating to Parents of Member

Organizations

May 3, 1995.

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

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on April 18, 1995, 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

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 rescind Rule

3.7, which requires the Exchange’s

Board to approve each country under

whose laws non-U.S. parents of member

organizations are organized. The CBOE

also proposes to move from Rule 3.7 to

Rule 3.5(a) the requirement that parents

of member organizations must furnish

certain information to the Exchange

upon request.

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, the Proposed Rule

Change

1. Purpose

The purpose of the proposed rule

change is to eliminate the requirement

that the Exchange’s Board of Directors

must approve each country under

whose laws non-U.S. parents of member

organizations are organized. The

Exchange believes this requirement is

not necessary for the effective regulation

of its members and their parent

organizations, if any. To the contrary,

elimination of this requirement will

facilitate the Exchange’s review of

membership applications submitted by

member organizations that have nonU.S. parents, as well as its review of

transactions that would result in the

transfer of control of an existing member

organization to a foreign parent.

The Exchange has never adopted any

standards to govern the Board’s

approval of individual countries for

purposes of Rule 3.7, and would find it

problematic to do so. However, since

parents of member organizations are

‘‘associated persons’’ for purposes of

Exchange Rules, as that term is defined

in Rule 1.1(qq), the Exchange has and

will continue to have adequate

regulatory jurisdiction over U.S. and

foreign parents of member

organizations. for example, Rule 3.5

subjects associated persons to the

Constitution and Rules of the Exchange

and the Clearing Corporation, and

requires associated persons to provide

information to the Exchange with

respect to their relationship and

dealings with the member and to permit

the Exchange to examine their relevant

books and records. In addition, as part

of this filing, CBOE proposes to move to

Rule 3.5 the requirement currently

contained in Rule 3.7 obligating persons

who control member organizations to

furnish to the Exchange any information

reasonably related to their securities

business that the Exchange may request.

The Exchange’s authority over parents

of member organizations is further

enlarged by Rule 17.1, which subjects

persons associated with members to the

disciplinary jurisdiction of the

Exchange.

2. Statutory Basis

In light of this broad grant of

regulatory authority over persons who

control member organizations as

described above, and the fact that

members themselves are subject to

comprehensive regulation under the

rules of the Exchange and both federal

and state securities laws, the Exchange

has concluded that the requirement is

consistent with Section 6(b) of the

Securities Exchange Act of 1934 in

general, and furthers the objectives of

Section 6(b)(2) in particular, by

eliminating restrictions on who may be

associated with a member of the

Exchange without diminishing the

protection of investors and the public

interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange believes the proposed

rule change will impose no burden on

competition.
Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices 24937

1 17 CFR 200.30–3(a)(12) (1994).

1A Designated Dealer is a proprietary member

who maintains a minimum net capital of at least the

greater of $100,000 or the amount required under

Rule 15c3–1 of the Act, and who has been approved

by the Exchange’s Securities Committee to perform

market functions by entering bids and offers for

securities designated by the Securities Committee to

be traded in the CSE’s National Securities Trading

System (‘‘designated issue’’) into that System. See

CSE Rule 11.9(a)(3).

2The CSE’s Rules provide that if there are two or

more Designated Dealers in a designated issue,

unless the Exchange’s Securities Committee has

approved one member as a primary Designated

Dealer, the guarantee obligations under the Rules

rotate among such Designated Dealers on a daily

basis. See CSE Rule 11.9(c)(iv).

3A Preferencing Dealer is an Approved Dealer

who enters principal bids and offers into the

National Securities Trading System for execution

against public agency orders that such Approved

Dealer is representing as agent pursuant to CSE

Rule 11.9(u). An Approved Dealer is a Designated

Dealer, a Contributing Dealer, or a specialist or

market maker registered as such with another

exchange with respect to any designated issue. See

CSE Rule 11.9(a)(2).

4A Contributing Dealer is a proprietary member

who maintains a minimum net capital of at least the

greater of $50,000 or the amount required under

Rule 15c3–1 of the Act, is registered with the

Exchange with respect to one or more designated

Continued

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.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of the 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 the 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.

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

Section, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of CBOE. All submissions should

refer to File No. SR–CBOE–95–21 and

should be submitted by May 31, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.1

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–11443 Filed 5–9–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35668; File No. SR–CSE–

95–05]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Cincinnati Stock Exchange, Inc.,

Relating to National Securities Trading

System Fees

May 3, 1995.

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

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on April 24, 1995, the

Cincinnati Stock Exchange, Inc. (‘‘CSE’’

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 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 Exchange hereby amends Rule

11.10 regarding fees imposed by the

Exchange. The text of the proposed rule

change is as follows [new text is

italicized; deleted text is bracketed]:

Rule 11.10 NATIONAL SECURITIES

TRADING SYSTEM FEES

G. PROPRIETARY (principal)

TRANSACTIONS

1. Designated Dealers will be charged

$0.0075 per share ($0.75/100 shares) for

principal transactions unless acting as Dealer

of the Day, a Preferencing Dealer or a

Contributing Dealer except, ITS Transactions

will be billed $0.0050 per share on outbound

trades and $0.0000 per share on inbound

trades subject to paragraph 5 below. (Billable

shares shall not exceed 650,000 shares times

the number of trading days in any given

month.)

2. Designated Dealers acting as ‘‘Dealer of

the Day’’ will be charged $0.005 per share

($0.50/100 shares) for principal transactions.

3. Contributing Dealers will be charged

$0.02 per share ($2.00/100 shares) for

principal transactions.

4. Members executing principal

transactions in securities for which they are

not registered as a Designated or Contributing

Dealer will be charged $0.02 per share

($2.00/100 shares).

5. Designated Dealers (DD) shall have the

following minimum average per share charge

applied to their aggregate monthly DD

transactions using the DD’s average volume

per trading day:

Designated dealer’s

average share volume per day

Per share

minimum

charge

[1 to 1,350,000] ....... [$0.0046]

Designated dealer’s

average share volume per day

Per share

minimum

charge

[1,350,000] 1 to

2,000,000 ............. [$0.0040] $0.0038

2,000,001 and higher .......................... $0.0030

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 Exchange has determined to

adjust its inter-market transaction fees

as they relate to Designated Dealers 1 to

reflect costs for similar trading on other

markets. The fee changes impact

Designated Dealer trades (other than

those transacted as Dealer of the Day,2

Preferencing Dealer 3 or Contributing

Dealer 4 and place the Exchange’s fees in