Federal Register / Vol. 66, No. 107 / Monday, June 4, 2001 / Notices 30033

13 15 U.S.C. 78f(b)(5)

14 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3Securities Exchange Act Release No. 41995

(October 8, 1999), 64 FR 56547 (October 20, 1999).

section 6(b)(5) of the Act 13 in particular,

in that it is designed to prevent

fraudulent and manipulative acts and

practices, to promote just and equitable

principles of trade, to foster cooperation

and coordination with persons engaged

in facilitating transactions in securities,

to remove impediments to and perfect

the mechanism of a free and open

market and a national market system, to

protect investors and the public interest

and is not designed to permit unfair

discrimination between customers,

issuers, brokers, or dealers.

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

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 Exchange 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 20549–0609. 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 the Amex. All

submissions should refer to File No.

SR–Amex–2001–25 and should be

submitted by June 25, 2001.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.14

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–13883 Filed 6–1–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44356; File No. SR–CBOE–

00–56]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Board Options Exchange,

Inc.; To Amend Its Rules To Allow for

Certain Orders Entered Through the

Exchange’s Order Routing System To

Automatically Trade Against Orders in

the Exchange’s Customer Limit Order

Book

May 25, 2001.

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 November

13, 2000, 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 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 amend its rules

to provide for certain orders entered

through the Exchange’s Order Routing

System (‘‘ORS’’) to automatically trade

against orders in the Exchange’s

customer limit order book. Below is the

text of the proposed rule change.

Proposed new language is in italics.

* * * * *

Chicago Board Options Exchange,

Incorporated

Rules

* * * * *

Chapter VI—Doing Business on the

Exchange Floor

Rule 6.8.B. Automatic ORS Order

Execution Against Booked Orders

(a) When the best bid or offer on the

Exchange’s book constitutes the best bid or

offer on the Exchange, any marketable public

customer order routed through the

Exchange’s Order Routing System (‘‘ORS’’)

will be automatically executed against the

book up to the size of the booked order(s)

establishing the best bid or offer on the

Exchange to the extent such execution is not

a price inferior to the current best bid or offer

in any other market. Any remaining balance

of the marketable public customer ORS order

shall be rerouted through ORS and handled

in accordance with all applicable Exchange

rules and policies.

(b) The appropriate Floor Procedure

Committee (‘‘FPC’’) may determine which

option classes will be subject to paragraph (a)

of this Rule.

(c) In unusual market conditions, two Floor

Officials, the FPC Chairman, or the

Chairman’s designee may exempt an option

class from paragraph (a) of this Rule.

* * * * *

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 parts of such statements.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

1. Purpose

On December 1, 1998, the

Commission approved a CBOE rule

change establishing the Exchange’s

Automated Book Priority System

(‘‘ABP’’).3 ABP allows an order entered

into the Exchange’s Retail Automatic

Execution System (‘‘RAES’’) to trade

directly with an order on the Exchange’s

customer limit order book in those cases

where the best bid (offer) on the

Exchange’s book is equal to the

prevailing market bid (offer). ABP has

30034 Federal Register / Vol. 66, No. 107 / Monday, June 4, 2001 / Notices

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

5 17 CFR 200.30–3(a)(12).

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

aided customers using the RAES system

as well as customers whose orders are

in the Exchange’s book, because both

categories of orders have been executed

more quickly than they would have

been executed otherwise. Further, ABP

has been beneficial in helping prevent

RAES orders from becoming subject to

market risk and in preserving the

priority of booked orders. The Exchange

now proposes to expand the application

of the ABP system to allow booked

orders to trade directly with any

incoming marketable public customer

order routed through ORS, as opposed

to only RAES-eligible orders.

Currently, when a non-RAES eligible

order is entered into the Exchange’s

ORS at a time when the prevailing

market bid (offer) is equal to the best bid

(offer) on the Exchange’s book, the order

is routed to a Floor Broker’s terminal, a

work station in the crowd, or the ordersending firm’s booth. This helps ensure

that the orders are handled and

executed in a manner that is consistent

with CBOE Rule 6.45, which provides

that bids or offers displayed on the

customer limit order book are entitled to

priority over other bids or offers at the

same price. However, once an order is

so routed, that order becomes subject to

market risk as there may be some delay

between the time the order is rerouted

and the time the order is actually filled

in open outcry. In times of extreme

market volatility, even a short period of

time between the rerouting and the

execution of the order could have a

significant effect on the price at which

the order is executed.

To remedy this delay in the execution

of marketable public customer ORS

orders, the Exchange proposes to

automatically execute incoming

marketable public customer ORS orders

against the customer limit order book in

instances where a booked limit order

represents or equals the prevailing best

bid (offer). No automatic execution

would take place if such execution

would be a price that is inferior to the

current best bid (offer) in any other

market. The ORS order would be

executed up to the size of the customer

limit order(s) in the book establishing

such prevailing best bid (offer). Any

remaining balance of the ORS order

would be instantly rerouted through the

ORS as if it were a new order, which

could, among other things, include

handling under CBOE’s RAES Rule

(Rule 6.8).

The proposed change would be

contained in proposed new Rule 6.8.B.,

which would further provide that the

appropriate Floor Procedure Committee

(‘‘FPC’’) could determine which option

classes would be subject to the rule.

Furthermore, the proposed rule would

allow two Floor Officials, the FPC

Chairman, or the Chairman’s designee to

attempt an option class or classes from

the proposed rule’s requirements if

warranted by unusual market

conditions.

2. Statutory Basis

The Exchange believes that the

proposed rule change is consistent with

and furthers the objectives of section

6(b)(5) of the Act 4 in that it is designed

to remove impediments to a free and

open market and to protect investors

and the public interest.

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 not necessary or

appropriate in furtherance of the

purposes of the Act.

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 disapproved.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether the proposed rule 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

20594–0609. 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 the CBOE. All

submissions should refer to File No.

SR–CBOE–00–56 and should be

submitted by June 25, 2001.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–13884 Filed 6–1–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44364; File No. SR–GSCC–

2001–04]

Self-Regulatory Organizations; The

Government Securities Clearing

Corporation; Notice of Filing and

Immediate Effectiveness of Proposed

Rule Change Relating to Amendments

to Fee Structures

May 29, 2001.

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

Securities and Exchange Act of 1934

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

April 18, 2001, the Government

Securities Clearing Corporation

(‘‘GSCC’’) filed with the Securities and

Exchange Commission (‘‘Commission’’)

and on April 27, 2001, amended the

proposed rule change as described in

Items I, II, and III below, which items

have been prepared primarily by GSCC.

The Commission is publishing this

notice to solicit comments on the

proposed rule change from interested

parties.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change will allow

GSCC to amend its fee structure to

reallocate certain repurchase transaction

(‘‘repo’’) processing fees in both its

delivery-versus-payment (‘‘DVP’’) and

GCF Repo services to provide for a more

equitable distribution among its

members. These changes became

effective on May 1, 2001.