14042 Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices

4The six-month extension expired in May 1994.

BSE did not seek another extension until this filing.

5At the time of the original filing in 1992, the

Exchange solicited comments from the Fee

Committee of the Board of Governors, comprised of

representatives of dealer-specialist, retail, and

institutional firms, the Executive Committee, which

serves as the Board of Governors of the Clearing

Corporation, and the Board of Governors of the

Exchange. See Securities Exchange Act Release No.

31515 (Nov. 24, 1992), 57 FR 56937 (notice of

immediate effectiveness of File No. SR–BSE–92–9).

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

2 17 CFR 240.19b–4 (1991).

3See Securities Exchange Act Release No. 35324

(February 2, 1995), 60 FR 7599 (February 8, 1995). 4 Id.

regarding certain ITS transactions. The

Exchange temporarily amended these

fees in 1992 for a one-year period and

extended these fees in 1993 for a sixmonth period, pending the outcome of

the Market 2000 Study.4 The affected

fees are comprised of the value charges

instituted on all nonspecialist outbond

ITS trades, which replaces the ITS User

Fee of $.003 per share on all outbound

trades incurred by non-specialist firms.

2. Statutory Basis

The statutory basis for this proposal is

Section 6(b)(4) of the Securities

Exchange Act of 1934.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The fee 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 fee

change.5

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change establishes

or changes a due, fee, or other charge

imposed by the Exchange and, therefore,

has become effective pursuant to

Section 19(b)(3)(A) of the Act and

subparagraph (e) of Rule 19b–4

thereunder. 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.

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 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 NW.,

Washington, DC 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the Exchange. All submissions

should refer to File No. SR–BSE–95–1

and should be submitted by April 5,

1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–6353 Filed 3–14–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35463; International Series

Release No. 790; File No. SR–CBOE–95–

12]

Self-Regulatory Organizations; Notice

of Filing of Amendment No. 1 to

Proposed Rule Change by the Chicago

Board Options Exchange, Inc.,

Relating to Margin Levels for Currency

Warrants Based on the Value of the

U.S. Dollar in Relation to the Mexican

Peso

March 9, 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 March 6,

1995, the Chicago Board Options

Exchange, Inc. (‘‘CBOE’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’)

Amendment No. 1 to the proposed rule

change as described in Items I, II, and

III below, which Items have been

prepared by the Exchange. The

Exchange filed the original proposal

with the Commission on January 27,

1995. Notice of the proposed rule

change appeared in the Federal Register

on February 8, 1995.3 The Commission

is publishing this notice to solicit

comments on Amendment No. 1 to 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 margin levels for

warrants traded on the Exchange that

are based upon the value of the U.S.

dollar in relation to the Mexican peso

(‘‘Mexican Peso Warrants’’). The text of

Amendment No. 1 to 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 and basis for

Amendment No. 1 to the proposed rule

change and discussed any comments it

received on the amendment. 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

In the Exchange’s proposal to list and

trade Mexican Peso Warrants, the CBOE

represented that ‘‘Exchange will require

that customer positions in Mexican Peso

Warrants be subject to the margin

requirements applicable to foreign

currency options.’’ 4 The Exchange is

now amending that proposal to specify

objective margin levels that will be

applicable to Mexican Peso Warrants

trading on the Exchange.

The Exchange represents that it has

calculated frequency distributions

reflecting U.S. dollar/Mexican peso

returns for all one, seven, and 21 day

periods for the period from January 2,

1992, through January 25, 1995 (‘‘three

year period’’), and for the period from

January 3, 1994, through January 25,

1995 (‘‘one year period’’). The Exchange

further represents that these

distributions demonstrate that 97.5% of

all seven day returns for the three year

period would have been covered by

4.5% of the underlying peso value and

that 95% of all seven day returns for the

one year period would have been

covered by approximately 10% of the

underlying peso value. Based upon

these results, the Exchange is proposing
Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices 14043

5 15 U.S.C. 78f(b)(5) (1988).

6 17 CFR 200.30–3(a)(12) (1994).

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

2 17 CFR 240.19b–4 (1992).

3See Securities Exchange Act Release No. 35261

(January 23, 1995), 60 FR 5745 (January 30, 1995).

4See Securities Exchange Act Release No. 34925

(November 1, 1994), 59 FR 55720 (November 8,

1994) (‘‘Exchange Act Release No. 34925’’).

5The Exchange represents that the average value

of a 300 contract Customized FCO transaction, at

prevailing exchange rates, is approximately $15

million. Reducing the minimum opening

transaction size to 200 contracts would still result

in an average minimum transaction value of

approximately $10 million.

6 15 U.S.C. 78(b)(5) (1988).

7See supra note 5.

8See Securities Exchange Act Release No. 32781

(August 20, 1993), 58 FR 45360 (August 27, 1993).

9See Securities Exchange Act Release Nos. 32694

(July 29, 1993), 58 FR 41814 (August 5, 1993), and

31920 (February 24, 1993), 58 FR 12280 (March 3,

1993).

10See Securities Exchange Act Release No. 34364

(July 13, 1994), 59 FR 36813 (July 19, 1994).

to set the margin ‘‘add-on’’ percentage

for Mexican Peso Warrants at 12% for

both initial and maintenance margin,

with a minimum add-on for out-of-themoney warrants of 8%. If, as a result of

the Exchange’s routine monitoring of

margin adequacy, the CBOE determines

that a different percentage would be

appropriate, the Exchange will file a

proposal with the Commission pursuant

to section 19(b) of the Act to modify the

margin add-on percentages applicable to

Mexican Peso Warrants.

The Exchange believes that

Amendment No. 1 to the proposed rule

change is consistent with section 6 of

the Act, in general, and furthers the

objectives of section 6(b)(5) oft he Act,5

in particular, in that the proposal will

promote just and equitable principles of

trade and will contribute to the

protection of investors and the public

interest.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

Amendment No. 1 to the proposed rule

change will impose any inappropriate

burden on competition.

(c) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

Written comments on Amendment

No. 1 to the proposed rule change were

neither solicited nor received.

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, as amended, or

(b) Institute proceedings to determine

whether the proposed rule change, as

amended, should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning Amendment No.

1 to the proposed rule change. 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, as amended, that are filed

with the Commission, and all written

communications relating to the

proposed rule change, as amended,

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

Section, 450 Fifth Street NW.,

Washington, DC. 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–95–12 and should be

submitted by April 5, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–6351 Filed 3–14–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35464; International Series

Release No. 791; File No. SR–Phlx–95–03]

Self-Regulatory Organizations; Order

Approving a Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.,

Relating to Customized Foreign

Currency Options Transaction Size

March 9, 1995.

On January 17, 1995, the Philadelphia

Stock Exchange, Inc. (‘‘Phlx’’ or

‘‘Exchange’’) filed with the Securities

and Exchange Commission

(‘‘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

reduce the minimum transaction size for

customized foreign currency options

(‘‘Customized FCOs’’) from 300 to 200

contracts. Notice of the proposed rule

change appeared in the Federal Register

on January 30, 1995. 3 No comment

letters were received on the proposed

rule change. This order approves the

Exchange’s proposal.

On November 1, 1994, the

Commission approved the Exchange’s

proposal to trade Customized FCOs. 4

Presently, Phlx Rule 1069(a)(6) imposes

a 300 contract minimum for opening

Customized FCO transactions. The

Exchange represents that a number of

midsized corporations and institutions

have told the Exchange that the current

minimum contract value is too large for

their purposes. The Exchange, therefore,

proposed to reduce the minimum

opening transaction size for Customized

FCO transactions to 200 contracts.5

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, and, in particular, the

requirements of Section 6(b)(5) 6 in that

the proposal is designed to promote just

and equitable principles of trade, to

prevent fraudulent and manipulative

acts and practices, and to protect

investors and the public interest.

Specifically, the Commission believes

that the proposed rule change is

designed to make the Customized FCO

market accessible to smaller corporate

FCO users while maintaining the focus

of this market towards institutional

investors. As a result, the Commission

believes that the proposal may serve to

add liquidity to this market which

would benefit all users of Customized

FCO’s.

Moreover, even with lowering the

minimum opening transaction size to

200 contracts, the average value of an

opening Customized FCO transaction

will be approximately $10 million.7 The

Commission believes that this level is

sufficient to ensure that Customized

FCO market continues to be used almost

exclusively by institutional investors.

The Commission also notes that this

dollar value is equivalent to the

minimum opening transaction size that

the Commission required in approving

proposals by the American Stock

Exchange,8 the Chicago Board Options

Exchange,9 and the Pacific Stock

Exchange10 for trading flexible exchange

options (‘‘FLEX Options’’). As a result,

the Commission believes that this

proposal does not raise any regulatory

concerns that were not adequately

addressed by the Exchange when the