Federal Register / Vol. 66, No. 125 / Thursday, June 28, 2001 / Notices 34495

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

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 44236

(April 30, 2001), 66 FR 23055 (May 7, 2001).

4 If the DPM determines that the trade is not valid,

e.g., if the trade was based on an erroneous print

in the underlying security, the order will be rebooked and the last sale canceled.

5 In approving this proposal, the Commission has

considered the proposed rule’s impact on

efficiency, competition, and capital formation. 15

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

6 15 U.S.C. 78f(b)(5).

7 15 U.S.C. 78s(b)(2).

8 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b-4.

Please direct your written comments

to Michael E. Bartell, Associate

Executive Director, Office of

Information Technology, Securities and

Exchange Commission, Mail Stop 0–4,

450 5th Street, NW., Washington, DC

20549.

Dated: June 20, 2001.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–16254 Filed 6–27–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44462; File No. SR–CBOE–

00–22]

Self-Regulatory Organizations; Order

Granting Approval of Proposed Rule

Change by the Chicago Board Options

Exchange, Inc., Relating to the

Automatic Execution of Certain Orders

on the Exchange’s Electronic Limit

Order Book

June 21, 2001.

On June 1, 2000, the Chicago Board

Options Exchange, Inc. (‘‘CBOE’’ or

‘‘Exchange’’), filed with the Securities

and Exchange Commission

(‘‘Commission’’ or ‘‘SEC’’), 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 relating to the automatic

execution of certain orders on the

Exchange’s electronic limit order book.

Notice of the proposed rule change and

Amendment Nos. 1 and 2 thereto were

published for comment in the Federal

Register on May 7, 2001.3 No comments

were received on the proposed rule

change, as amended.

The Exchange proposes to amend its

rules governing the operation of its

Retail Automatic Execution System

(‘‘RAES’’) to provide for the automatic

execution, under certain circumstances,

of orders in the Exchange’s electronic

limit order book when they become

marketable. The Exchange proposes to

implement a system enhancement

called ‘‘Autoquote Triggered EBook

Execution’’ (‘‘Trigger’’) to particular

option classes, as determined by the

appropriate Floor Procedure Committee.

Trigger will allow orders resting in the

book to be automatically executed

where the bid or offer for a series of

options generated by the Exchange’s

Autoquote system (or any Exchangeapproved proprietary quote generation

system used in lieu of Autoquote) is

equal to or crosses the Exchange’s best

bid or offer for that series as established

by a booked order. Only series in which

Autoquote (or any Exchange-approved

quote generation system) is employed

are eligible for Trigger.

Where Trigger has been activated, as

Autoquote changes and the quote

generated by Autoquote either touches

or crosses an order in the book, the

booked order(s) will be automatically

executed up to the applicable RAES

contract limit. The booked order then

will be immediately taken out of the

book and a last sale will be

disseminated. A ticket will be printed

on the book printer notifying the book

clerk that a trade has been executed and

an endorsement is required. After the

book clerk verifies with the Designated

Primary Market-Maker (‘‘DPM’’) that the

trade is valid based on movements in

the underlying security, the trade will

be endorsed by the book clerk.4 In most

instances, it will be endorsed to the

RAES ‘‘wheel’’ up to the applicable

RAES contract limit. However, the

Trigger system will have the

functionality to allow the trade to be

endorsed manually (as is done today)

when appropriate.

If the number of contracts in the book

is greater than the applicable RAES

contract limit, the trading crowd will

manually execute the remainder. In the

limited circumstance where contracts

remain in the book after a Trigger

execution and a disseminated quote

remains locked or crossed, orders in

RAES for options of that series will be

‘‘kicked-out’’ of RAES, and immediately

and automatically routed to the crowd

Public Automated Routing (‘‘PAR’’)

terminal (absent contrary instructions of

the firm), where they will be

represented by the broker and, if

executable, will ordinarily be executed

immediately. Because these orders

remain RAES eligible, they will be

entitled to receive firm quote treatment

when represented in the crowd.

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.5 In particular, the

Commission believes that the proposal

is consistent with Section 6(b)(5) of the

Act,6 which requires, among other

things, that the rules of an exchange be

designed to promote just and equitable

principles of trade, to remove

impediments to and perfect the

mechanism of a free and open market,

and to protect investors and the public

interest. The proposed rule change

should help provide faster execution of

customer orders, while reducing the

burden on the Exchange’s DPMs with

respect to manual execution of booked

orders, limiting the number of book

trade-throughs, and eliminating a large

number of RAES kick-outs.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,7 that the

proposed rule change (File No. SR–

CBOE–00–22) be, and it hereby is,

approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–16206 Filed 6–27–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44458; File No. SR–

MSRB–2001–03]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Municipal Securities Rulemaking

Board Relating to the Establishment of

an Optional Procedure for Electronic

Submissions of Required Materials

Under Rule G–36, on Delivery of

Official Statements, Advance

Refunding Documents and Forms G–

36(OS) and G–36(ARD) to the MSRB

June 20, 2001.

Pursuant to section 19(b) of the

Securities Exchange Act of 1934 (‘‘Act’’)

and Rule 19b–4 thereunder,1 notice is

hereby given that on June 7, 2001, the

Municipal Securities Rulemaking Board

(‘‘MSRB’’ or ‘‘Board’’) filed with the

Securities and Exchange Commission

(‘‘SEC’’ or ‘‘Commission’’) a proposed

rule change (File No. SR–MSRB–2001–

03) (‘‘proposed rule change’’) described

in Items, I, II, and III below, which Items

have been prepared by the MSRB. The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons.