7598 Federal Register / Vol. 60, No. 26 / Wednesday, February 8, 1995 / Notices

1The proposed rule change would apply to a New

Security if at least one of the following conditions

is met:

(1) Any one or more of (A) the aggregate market

value of the New Security, (B) the aggregate book

value of the assets attributed to the business

represented by the New Security, or (C) the

revenues attributed to the business represented by

the New Security are at least 25% of the same

measure determined with respect to the Original

Security or the business represented by the Original

Security, as applicable, calculated in a comparable

manner on a basis that reflects the inclusion of the

business represented by the New Security, provided

that in the case of the qualification of a New

Security under clause (B), the aggregate book value

of the assets attributed to the business represented

by the New Security is not less than $50 million,

and in the case of the qualification of a New

Security under clause (C), the revenues attributed

to the business represented by the New Security are

not less than $50 million;

(2) Any one or more of (A) the aggregate market

value of the New Security, (B) the aggregate book

value of the assets attributed to the business

represented by the New Security, or (C) the

revenues attributed to the business represented by

the New Security are at least 331⁄3% of the same

measure determined with respect to the Original

Security or the business represented by the Original

Security, as applicable, calculated in a comparable

manner on a basis that reflects the exclusion of the

business represented by the New Security, provided

that in the case of the qualification of a New

Security under clause (B), the aggregate book value

of the assets attributed to the business represented

by the New Security is not less than $50 million,

and in the case of the qualification of a New

Security under clause (C), the revenues attributed

to the business represented by the New Security are

not less than $50 million; or

(3) The aggregate market value represented by the

New Security is at least five hundred million

dollars ($500,000,000).

2Under the proposed rule change, options

contracts may not initially be listed for trading in

respect of a New Security until such time as shares

of the New Security are issued and outstanding and

are the subject of trading that is not on a ‘‘when

issued’’ basis or in any other way contingent on the

issuance or distribution of the shares.

Advisory Committee hereby gives notice

that it will meet on February 21, 1995,

in Room 1C30 at the Commission’s main

offices, 450 Fifth Street, NW.,

Washington, DC, beginning at 9 a.m.

The meeting will be open to the public.

The Committee’s responsibilities

include assisting the Commission in

identifying investor problems and being

more responsible to their needs. The

Committee will explore fundamental

issues of concern to investors, including

matters currently under consideration

by the SEC and topics of emerging

concern to investors and the financial

services industry.

The purpose of this meeting will be to

consider disclosure reform proposals;

municipal securities; litigation reform;

broker-dealer sales practices; and

investor educational projects to be

undertaken by the Office of Consumer

Affairs.

Dated: February 3, 1995.

Jonathan G. Katz,

Advisory Committee Management Officer.

[FR Doc. 95–3243 Filed 2–6–95; 1:13 pm]

BILLING CODE 8010–01–M

[Release No. 34–35315; File No. SR–CBOE–

95–11]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

Chicago Board Options Exchange, Inc.

Relating to Listing Standards for

Options on Securities Issued in Certain

Corporate Restructuring Transactions

February 1, 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 January 26, 1995,

the Chicago Board Options Exchange,

Inc. (‘‘CBOE’’ or ‘‘Exchange’’) filed with

the Securities and Exchange

Commission (‘‘Commission’’ or ‘‘SEC’’)

the proposed rule change as described

in Items I, II and III below, which Items

have been prepared by the selfregulatory 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 proposes to incorporate

in its rules listing standards applicable

to options on securities issued in certain

corporate restructuring transactions.

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

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 proposes to amend its

rules to permit the earlier listing of

options on securities issued by

companies in connection with certain

corporate restructuring transactions

(‘‘New Securities’’). Currently, certain of

the Exchange’s rules preclude the listing

of options on any security until that

security has been actively traded at or

above a specific price level for a certain

period of time. For example, under

Exchange Rule 5.3, Interpretation and

Policy .01(b)(1), trading volume in an

underlying security must be at least

2,400,000 shares during the preceding

twelve months (the ‘‘Volume Test’’).

Further, under Exchange Rule 5.3,

Interpretation and Policy .01(b)(2), the

market price for an underlying security

must be at least $7.50 for the majority

of business days during the three

calendar month period preceding the

date the security is selected as an

underlying security (the ‘‘Price Test’’).

The proposed rule change would

facilitate the earlier listing of options on

New Securities by permitting the

Exchange to determine whether a New

Security satisfies the Volume Test and

Price Test by reference to the trading

volume and market price history of an

outstanding equity security (the

‘‘Original Security’’) previously issued

by the issuer of the New Security (or an

affiliate thereof). Specifically, if (a) the

aggregate market value, assets or

revenue attributable to a New Security

is at least a stated percentage of the

same measure attributable to the

Original Security and if a stated

minimum value of assets or revenues

represented by the New Security, as

applicable, is satisfied or (b) the

aggregate market value of the New

Security is not less than $500 million,1

then the Exchange would be permitted

to determine whether a New Security

satisfies the Volume Test and Price Test

by reference to the trading volume and

market price history of the Original

Security. Reference may be made to the

trading volume and market price history

of the Original Security only for trading

days occurring prior to the ex-date for

the transaction in which the New

Security is issued 2 and prior to any

trading day for which these tests are

determined to be satisfied by reference

to the trading volume and market price

history of the New Security. If reference

is made to either the trading volume or

market price history of the Original

Security for this purpose for any period

of time, then reference must be made to

both such criteria in respect of the

Original Security for that period.

In addition, if the New Security is to

be listed on an exchange or in an

automatic quotation system that has an

initial listing requirement equivalent to
Federal Register / Vol. 60, No. 26 / Wednesday, February 8, 1995 / Notices 7599

1 15 U.S.C. 78s(b)(1) (1988).

2 17 CFR 240.19b–4 (1991).

the requirement of paragraph (a)(2) of

Interpretation and Policy.01 under

Exchange Rule 5.3 (number of

shareholders must be at least 2,000),

that requirement would be deemed to be

satisfied. Finally, if at least 40 million

shares of a New Security will be

outstanding in a restructuring, the

Exchange may assume that the New

Security will satisfy the listing criteria

of both paragraphs (a)(1) (sufficient

public float) and (a)(2) of Interpretation

and Policy .01 under Exchange Rule 5.3.

Before relying on either of the

assumptions described above, the

Exchange must make a reasonable

investigation as to the number of

shareholders and public float of the

New Security and must not have

determined that the requirements of

paragraphs (a)(1) and (a)(2) will, in fact,

not be satisfied.

The proposed rule change also would

revise one of the Exchange’s guidelines

relating to the withdrawal of approval of

underlying securities. Currently, under

Exchange Rule 5.4, Interpretation and

Policy .01(c) and .01(d), an underlying

security will not be deemed to satisfy

the Exchange’s listing criteria if the

trading volume of the underlying

security in all markets was less than

1,800,000 shares in the preceding

twelve months (the ‘‘Maintenance

Volume Test’’) or if the market price of

the underlying security closed below $5

on a majority of business days during

the preceding six months (the ‘‘Market

Price Test’’). Because New Securities

have limited trading history, they may

be unable to satisfy the Maintenance

Volume Test or the Market Price Test at

the time options on such securities are

first listed for trading on the Exchange.

Accordingly, the proposed rule change

would add a new Interpretation and

Policy .01(g) to Exchange Rule 5.4 to

provide that the Exchange may

determine whether a New Security

satisfies the Maintenance Volume and

Market Price Test set forth in paragraphs

(c) and (d) of that Interpretation, as well

as the comparable tests set forth in

Interpretation and Policy .04 of

Exchange Rule 5.4, by reference to the

trading volume and price history of the

Original Security prior to

commencement of trading in the New

Security, including ‘‘when issued’’

trading.

2. Statutory Basis

The proposed rule change is

consistent with Section 6(b) of the Act,

in general, and furthers the objectives of

Section 6(b)(5) in particular, by

removing impediments to a free and

open market in options covering

securities issued by companies engaged

in corporate restructuring transactions.

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.

B. 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 publication of

this notice in the Federal Register or

within such other 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 the CBOE. All submissions

should refer to File No. SR–CBOE–95–

11 and should be submitted by March

1, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–3109 Filed 2–7–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35324; International Series

Release No. 781 File No. SR–CBOE–95–12]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Board Options Exchange,

Inc. Relating to Currency Warrants

Based on the Value of the U.S. Dollar

in Relation to the Mexican Peso

February 2, 1995.

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 January

27, 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 Exchange.

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 list and trade

warrants based upon the value of the

U.S. dollar in relation to the Mexican

peso (‘‘Mexican Peso Warrants’’). 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

Exchange included statements

concerning the purpose of the 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.