Federal Register / Vol. 61, No. 2 / Wednesday, January 3, 1996 / Notices 199

7 17 CFR 200.30–3(a)(12) (1994).

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

2 17 CFR 240.19(b)–4.

disseminated to vendors of financial

data via the Exchange’s Network B.

With respect to base metals (i.e., those

traded on the LME), the value of the

commodities will be continuously

disseminated on Network B, but will be

updated only once per day during U.S.

market hours as the market for the

relevant contracts does not trade in a

continuous fashion when the U.S.

securities markets are open.

Since commodity returns historically

have been negatively correlated with

financial assets, the Exchange believes

that the ownership of ComPS (although

their return is uncertain) will help to

diversify a portfolio of financial

instruments. The proposed ComPS also

will benefit the producers, consumers

and dealers of the underlying

commodities by permitting them,

through the issuance of ComPS, to raise

low cost capital.

Returns to investors in ComPS are

unleveraged with neither a cap nor a

floor. There is an element of derivative

pricing, however, with respect to the

calculation of the final payment. The

Exchange, accordingly, will require

members, member organizations and

employees thereof to make a

determination with respect to customers

whose accounts have not previously

been approved to trade futures or

options that a transaction in the

proposed securities is suitable for such

customer. In addition, members,

member organizations or employees

thereof recommending a transaction in

ComPS would be required: (1) To

determine that the transaction

recommended is suitable for the

customer and (2) to have a reasonable

basis for believing that the customer can

evaluate the special characteristics of,

and is able to bear the financial risks of,

the recommended transaction. The

Exchange will distribute a circular to its

membership prior to trading ComPS

providing guidance with regard to

member firm compliance

responsibilities (including suitability

recommendations) when handling

transactions in such securities and

highlighting the special risks and

characteristics thereof.

ComPS will be subject to the equity

margin and trading rules of the

Exchange except that, where ComPS are

issued as debt in denominations with a

face value of $1,000 or greater, they will

be traded subject to the Exchange’s debt

trading rules.

2. Statutory Basis

The basis under the Act for this

proposed rule change is the requirement

under Section 6(b)(5) that an exchange

have rules that are 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 regulating, clearing, settling,

processing information with respect to,

and facilitating transactions in

securities, to remove impediments to

and perfect the mechanism of a free and

open market and national market

system, and, in general, to protect

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 that is 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

The Exchange has not solicited, and

does not intend to solicit, comments on

this proposed rule change. The

Exchange has not received any

unsolicited written comments from

members or other interested parties.

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 the Amex. All submissions

should refer to File No. SR–Amex–95–

50 and should be submitted by January

24, 1996.

For the Commission, by the Division

of Market Regulation, pursuant to

delegated authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–35 Filed 1–2–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36635; File No. SR–CBOE–

95–52]

Self-Regulatory Organizations; Order

Approving a Proposed Rule Change by

the Chicago Board Options Exchange,

Incorporated Relating to the

Suspension of the Ten Contract Firm

Quote Requirement During Fast

Markets

December 22, 1996.

I. Introduction

On September 5, 1995, the Chicago

Board Options Exchange, Incorporated

(‘‘CBOE’’ or ‘‘Exchange’’) filed a

proposed rule change with the

Securities and Exchange Commission

(‘‘SEC’’ or ‘‘Commission’’), pursuant to

Section 19(b)(1) of the Securities

Exchange Act of 1934 (‘‘Act’’) 1 and Rule

19b–4 thereunder,2 to amend CBOE

Rules 8.51, 6.6 and 6.20 Interpretation

.09 to: (i) Remove the pilot status of

Rule 8.51; (ii) conform Rule 8.51 to the

existing practice of permitting, but not

requiring, Floor Officials to suspend the

ten contract firm quote requirement of

Rule 8.51(a) during a fast market; (iii)

expand the group of persons with

authority to grant suspensions,

exemptions or exceptions to Rule 8.51

(currently only the Market Performance

Committee) to any two Floor Officials,

(iv) specify that when a fast market is

declared any two Floor Officials have

the power to suspend the firm quote

requirement of Rule 8.51 and turn off

the Retail Automatic Execution System

(‘‘RAES’’); (v) allow the senior person

then in charge of the Exchange’s Control

Room to suspend the ten contract firm

quote requirement under certain

circumstances; and (vi) amend Rule 6.20

Interpretation .09 to clarify the instances
200 Federal Register / Vol. 61, No. 2 / Wednesday, January 3, 1996 / Notices

3See Securities Exchange Act Release No. 36391

(October 18, 1995), 60 FR 54737.

4The Security Traders Association (‘‘STA’’)

supports the proposal to codify the Exchange’s

authority to suspend the ten contract firm quote

requirement during a fast market because it will

permit the market to react promptly to systems

malfunctions, events in the market, or other

circumstances which interfere with the Exchange’s

ability to disseminate current and accurate quotes.

The STA believes that a self-regulatory organization

must have the power and authority to modify,

within limits, any technological or operational

procedure immediately upon determining that it

does not fulfill its intended purpose. See Letter

from William R. Rothe, Chairman, and John L.

Watson, III, President, STA, to Jonathan G. Katz,

Secretary, Commission; dated November 15, 1995

(‘‘Comment Letter’’).

5See Securities Exchange Act Release No. 26924

(June 13, 1989), 54 FR 26284 (June 22, 1989).

6See Letter from Michael Meyer, Attorney, Schiff

Hardin & Waite, to John Ayanian, Attorney, Office

of Market Supervision (‘‘OMS’’), Division of Market

Regulation (‘‘Market Regulation’’), Commission,

dated December 14, 1995 (‘‘CBOE Letter’’).

where a member of the Market

Performance Committee may perform

the functions of a Floor Official.

Notice of the proposal was published

for comment and appeared in the

Federal Register on October 25, 1995.3

The Commission received one comment

letter concerning the proposed rule

change.4 This order approves the

Exchange’s proposal.

II. Description of the Proposal

The purposes of the proposal are: (1)

To approve Rule 8.51 (‘‘ten contract firm

quote requirement’’) on a permanent

basis, removing the current pilot

program designation, (2) to conform

Rule 8.51 to the existing practice of

permitting, but not requiring, Floor

Officials to suspend the ten contract

firm quote requirement of Rule 8.15(a)

during a fast market, (3) to expand the

group of persons with authority to grant

suspension, exemptions, or exceptions

to the firm quote requirement from the

Market Performance Committee

members to any two Floor Officials, (4)

to specify that when a fast market is

declared pursuant to Rule 6.6, two Floor

Officials have the power to suspend the

firm quote requirement of Rule 8.51 and

turn off RAES, (5) grant the senior

person then in charge of the Exchange’s

Control Room the authority to suspend

the ten contract firm quote requirement,

if there is a system malfunction that

affects the Exchange’s ability to

disseminate or update market quotes,

and (6) to amend Rule 6.20

Interpretation .09 to clarify that the

instances where a member of the Market

Performance Committee may perform

the functions of a Floor Official include

enforcing policies and acting pursuant

to rules related to RAES, fast markets,

and the ten contract firm quote

requirement.

Rule 8.51(a) requires a trading crowd

to sell (buy) at least ten contracts at the

offer (bid) which is displayed when a

buy (sell) customer order reaches the

trading crowd. Initially, this rule was

adopted as an Exchange pilot program

to be monitored and enforced by the

Exchange’s Market Performance

Committee.5 The ten contract firm quote

requirement has been in effect since

1989, and the Exchange believes it is

now time to remove the designation as

a pilot program. The Exchange believes

that the ten contract firm quote

requirement has been beneficial to

investors and has provided greater

liquidity to the markets by requiring

that the orders of non-broker dealer

customer be filled for at least ten

contracts at the displayed quote price.

The Exchange further represents that

trading crowds are aware of the

requirements of Rule 8.51 and have

generally been able to meet its

requirements.6

Rule 8.51(a)(2) currently provides that

the ten contract firm quote requirement

will be in effect unless a fast market has

been declared. Although not presently

explicit in the rules, it is current

practice not to automatically suspend

this requirement when a fast market has

been declared. The Exchange proposes

to amend Rule 8.51(a)(2) and add

Interpretation .07 to clarify that the ten

contract firm quote requirement in

paragraph (a) of Rule 8.51 is not

automatically suspended when a fast

market is declared. Instead,

Interpretation .07 would provide that

any two Floor Officials have the power,

but are not required, to suspend this

requirement when a fast market has

been declared.

CBOE believes the interests of a fair

and orderly market are better served

when the rules allow Exchange officials

the discretion to evaluate market

conditions and circumstances and to

exercise their judgment as to whether

the ten contract firm quote requirement

should be suspended in a fast market.

This permits the firm quote requirement

to remain in place for the benefit of nonbroker dealer customers even when a

fast market has been declared, except in

those specific instances where two Floor

Officials have determined that the ten

contract firm quote requirement should

be suspended.

As set forth in Interpretation .09 to

Rule 6.20, members of the Market

Performance Committee may perform

the functions of Floor Officials for the

purpose of enforcing trading conduct

policies. As Rule 8.51 is presently

written, only the Market Performance

Committee or Market Performance

Committee members acting as Floor

Officials may grant exemptions from, or

make exceptions to, Rule 8.51. CBOE

believes Floor Officials from the Floor

Officials Committee are also qualified to

make decisions regarding exemptions

from, and exceptions to Rule 8.51.

CBOE sees no reason to limit this power

to members of the Market Performance

Committee. CBOE also believes that the

power to suspend Rule 8.51 once a fast

market is declared should be granted to

any two Floor Officials, whether they

are members of the Market Performance

Committee or members of the Floor

Officials Committee.

CBOE’s proposal would grant equal

power to members of the Floor Officials

Committee and members of the Market

Performance Committee to act under

Rule 8.51 regarding suspensions,

exceptions to or exemptions from the

firm quote requirement. It is important

for a timely decision to be made once

a fast market has been declared or other

situations have arisen which warrant

the suspension of the firm quote

requirement, or an exemption or

exception to this requirement. CBOE

believes that it could be detrimental to

a fair and orderly market to delay action

until a member of the Market

Performance Committee could be found

to make such a decision when members

of the Floor Officials Committee might

already be present at the trading post.

To implement CBOE’s intention that

any two Floor Officials may make

decisions under Rule 8.51, including

members of the Market Performance

Committee acting as Floor Officials and

members of the Floor Officials

Committee, the proposal would amend

Rule 6.20, Interpretation .09, amend

Rule 8.51(a)(3), and add Interpretation

.06 to Rule 8.51. In addition, the

proposal would amend Rule 8.51 to

clarify that in deciding whether to grant

a suspension, exception to or exemption

from the firm quote requirement, Floor

Officials consider whether to do so

would be in the interest of a fair and

orderly market.

Because Rule 8.51 requires that

Exchange market makers honor nonbroker dealer customer orders at the

displayed quote for up to ten contracts,

it is important that the displayed market

quote be accurate. Otherwise, market

makers would be forced to trade ten

contracts at an inaccurate or ‘‘stale’’

quote price. Therefore, if there is a

system malfunction or other

circumstance which interferes with the

Exchange’s ability to disseminate the

then current and accurate quote, it is

important for the Exchange to be able to

act quickly to suspend the market
Federal Register / Vol. 61, No. 2 / Wednesday, January 3, 1996 / Notices 201

7A PAR workstation is an automated, computerbased workstation that provides users with the

ability to execute trades, transmit trade reports, and

enter other data and commands at the touch of a

screen, thereby eliminating the delay inherent in a

keyboard-based system. Telephone conversation

between Anthony Montesano, Manager, Trading

Operations, CBOE, and John Ayanian, Attorney,

OMS, Market Regulation, Commission, on

December 21, 1995.

8According to CBOE, when determining order

parameters for routing purposes, the member firms

look to (1) the size of the order, (2) whether the

series is on RAES, and (3) whether it is a market

order or an immediately executable limit order.

Telephone conversation between Edward Joyce,

CBOE, and John Ayanian, OMS, Market Regulation,

Commission, on December 21, 1995.

maker’s obligations under Rule 8.51

until the difficulty is resolved. To

implement such a quick response, the

proposal would further amend Rule 8.51

to grant to the senior person then in

charge of the Exchange’s Control Room

the authority to suspend the ten contract

firm quote requirement contained in

Rule 8.51(a) if there is a system

malfunction or other circumstance that

affects the Exchange’s ability to

disseminate or update market quotes.

After exercising such authority, the

senior person would need to

immediately seek approval of two Floor

Officials, who would be empowered to

confirm or overrule the suspension.

It is important for the Control Room

to have this power to suspend the firm

quote requirement, since the Control

Room would most likely learn of the

system malfunction before Floor

Officials or other Exchange staff.

Consequently, the Control Room could

act in a timely manner to prevent

market makers from having to trade at

‘‘stale’’ market quotes. If the Control

Room does invoke its power to suspend

the firm quote requirement, then the

Control Room would disseminate a

message notifying the public that the

displayed quotes are not firm because of

a data dissemination problem. This

would inform non-broker dealer

customers that their orders would not

necessarily be filled at that displayed

bid or offer. Once the system

malfunction has been corrected and the

market quotes have been updated, either

the senior person then in charge of the

Exchange’s Control Room or two Floor

Officials would be required to end the

suspension of the firm quote

requirement.

As it is presently written, Rule 6.6(b)

provides that the two Floor Officials

declaring a fast market have the power

to take a number of specified actions

and more generally to take such other

actions as are deemed necessary in the

interest of maintaining a fair and orderly

market. When a fast market has been

declared, pursuant to these general

powers, Floor Officials will often, in the

interest of maintaining a fair and orderly

market, suspend the ten contract firm

quote requirement of Rule 8.51. This

decision to suspend the firm quote

requirement is made often during a fast

market because the displayed quote is

not current or accurate due to the influx

of orders or other unusual

circumstances. Therefore, market

makers should not be forced to trade ten

contracts at an inaccurate quote. In

order to notify members and the public

that, during a fast market, Floor Officials

may suspend the firm quote

requirements, CBOE proposes to specify

in Rule 6.6(b) that when a fast market

is declared, Floor Officials have the

power to suspend the ten contract firm

quote requirement of Rule 8.51.

For the same reasons, after a fast

market declaration, another action Floor

Officials may take in the interest of

maintaining a fair and orderly market is

to turn off RAES. When RAES receives

an order, the system automatically will

attach to the order its execution price,

determined by the prevailing market

quote at the time of the order’s entry

into the system. A buy order will pay

the prevailing market quote for an offer

and a sell order will sell at the

prevailing market quote for the bid. A

market maker who has signed on as a

participant in RAES will be designated

as a contra-broker on the trade. Trades

are assigned to these participating

market makers on a rotating basis.

Therefore, by agreeing to participate in

RAES, a market maker is automatically

assigned trades based on the prevailing

market quote that is then being

disseminated. Consequently, it is

important for the prevailing market

quote to be accurate, because otherwise

market makers participating in RAES

may be assigned trades at prices other

than the actual prevailing market quote.

During a fast market, often the influx of

orders is greatly increased or other

unusual circumstances exist that affect

the accuracy of the prevailing market

quote. For this reason, Floor Officials,

acting under the general powers of Rule

6.6(b), may turn off RAES to prevent

market makers from being assigned

trades based on inaccurate market

quotes. In order to notify members and

the public that such action may be taken

in a fast market, CBOE proposes to

amend Rule 6.6 to specify that Floor

Officials have the power to turn off

RAES after a fast market has been

declared.

If RAES is turned off because of the

circumstances described above, the

orders that would have been routed to

RAES will be automatically re-outed to

either the Public Automated Routing

System (‘‘PAR’’) workstation 7 or floor

broker printer in the trading crowd, or

to the appropriate member firm booth.

Where the order is re-routed will

depend upon parameters set by member

firms for their customers’ orders prior to

entering the orders onto RAES.8

Furthermore, as Rule 6.6(b) is

presently written, it could be

interpreted that only the same two Floor

Officials who declared the fast market

have the power to take the other actions

specified in Rule 6.6(b). CBOE’s practice

has been that any two Floor Officials

have the powers specified in Rule

6.6(b), not just the specific two

individuals who declared the fast

market. Therefore, CBOE proposes an

amendment to Rule 6.6(b) to clarify that

any two Floor Officials have the powers

specified in 6.6(b).

CBOE believes that members of the

Market Performance Committee, who

perform Floor Officials functions, as

well as Floor Officials who are members

of the Floor Officials Committee, are

equally qualified to make decisions

regarding Rule 6.6. To clarify that

members of the Market Performance

Committee may also act pursuant to

Rule 6.6, the proposal would amend

Rule 6.20 Interpretation .09 to specify

that the Floor Official functions that

Market Performance Committee

members may perform include acting

pursuant to rules related to fast markets

and RAES. Again, when circumstances

arise which might require the

declaration of a fast market, it is

important for timely decisions to be

made regarding the declaration of a fast

market and other related decisions

specified in Rule 6.6. CBOE believes

that it would be detrimental to a fair and

orderly market to delay action until a

Floor Official from the Floor Officials

Committee is found to make such

decisions when members of the Market

Performance Committee might already

be present at the trading post.

The Exchange believes that the

proposal is consistent with and furthers

the objectives of Section 6(b)(5) of the

Act, in that the proposal is designed to

perfect the mechanisms of a free and

open market and to protect investors

and the public interest by: (1) Enabling

any two Floor Officials to evaluate and

consider market conditions and

circumstances in determining whether

to suspend the firm quote requirement

of Rule 8.51 during a fast market; (2)

clarifying the powers of Market

Performance Committee members and

specifying the powers Floor Officials

may invoke during a fast market; and (3)
202 Federal Register / Vol. 61, No. 2 / Wednesday, January 3, 1996 / Notices

9 15 U.S.C. 78f(b)(5).

10See Securities Exchange Act Release No. 26924

(June 13, 1989), 54 FR 26284 (June 22, 1989).

11See CBOE Rule 8.51(a)(2).

12See CBOE Letter, supra note 6.

13See CBOE Letter, supra note 6.

14 15 U.S.C. 78s(b)(2).

15 17 CFR 200.30–3(a)(12).

granting certain authority to the senior

person then in charge of the Control

Room to suspend the firm quote

requirement when there has been a

system malfunction affecting the

dissemination or updating of quotes.

The Exchange also believes that the

entire proposal is consistent with

Section 6(b) of the Act in general and

furthers the objectives of Section 6(b)(5)

in particular in that it is designed to

prevent fraudulent and manipulative

acts and practices, to promote just and

equitable principles of change, to foster

cooperation and coordination with

persons engaged in facilitating

transactions in securities, and to remove

impediments to and perfect the

mechanism of a free and open market

and a national market system.

III. Commission Finding and

Conclusions

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) of the

Act.9 Specifically, the Commission finds

that the Exchange’s proposal strikes a

reasonable balance between the

Commission’s mandates under Section

6(b)(5) to remove impediments to and

perfect the mechanism of a free and

open market and a national market

system, while protecting investors and

the public interest.

For purposes of the CBOE’s proposal

to permanently approve the ten contract

firm quote pilot program, the

Commission reasserts its initial position

regarding the benefits of the rule on the

CBOE.10 Specifically, the permanent

approval of the ten contract firm quote

requirement rule is consistent with

Section 6(b)(5) of the Act in that the rule

results in improved market quality and

better market maker performance than

would otherwise occur. The ten contract

firm quote requirement should continue

to result in better executions of small

customer orders by ensuring greater

depth of CBOE options markets.

The Commission also believes that the

ten contract firm quote requirement

encourages market makers to become

more competitive in making size

markets, thereby facilitating transactions

in securities, contributing to a more free

and open market, and improving the

quality of the CBOE’s public customers’

options markets.

The Commission also believes that it

is appropriate for the Exchange to

conform its rules to the current practice

not to automatically suspend the ten

contract firm quote requirement when a

fast market has been declared.11

Accordingly, the Commission believes

that it is appropriate to add

Interpretation .07 to Rule 8.51 to grant

any two Floor Officials the authority,

but not require them, to suspend the ten

contract firm quote requirement during

a fast market. The Commission agrees

with the CBOE that, during a fast

market, Exchange officials should have

the discretion to evaluate market

conditions and circumstances and to

exercise their judgment as to whether

the ten contract firm quote requirement

should be suspended. Both amended

Rule 8.51(a)(2) and proposed

Interpretation .07 to Rule 8.51

adequately address these issues and

should help minimize adverse impact

on non-broker dealer customers during

a fast market when two Floor Officials

determine that market conditions and

circumstances do not warrant such

action.

The Commission also believes it is

appropriate to allow the Exchange to

allow any two Floor Officials, including

members of the Market Performance

Committee acting as Floor Officials and

members of the Floor Officials

Committee, to grant suspensions,

exemptions, or exceptions to the ten

contract firm quote requirement under

Rule 8.51. Specifically, proposed rule

change will (i) allow members of the

Market Performance Committee to retain

authority to grant exemptions from, or

to suspend, the ten contract firm quote

requirement under Rule 8.51, and grant

Floor Officials that same authority; and

(ii) clarify that the authority of Market

Performance Committee members under

Interpretation .09 under Rule 6.20

includes enforcing policies and acting

pursuant to rules related to RAES and

fast markets.12 The Commission

believes that the Exchange adequately

addresses these issues by amending (1)

Rule 8.51(a)(3), (2) Interpretation .06 to

Rule 8.51, (3) Interpretation .09 to Rule

6.20, and (4) Rule 6.6(b)(iv) as set forth

above in Section II.

In regard to RAES orders during a fast

market, the Commission believes that it

is appropriate to grant any two Floor

Officials, pursuant to proposed Rule

6.6(b) (v), the express authority to turn

off RAES after a fast market declaration

if in the interest of maintaining a fair

and orderly market. Floor Officials have

the general authority to turn off RAES

during unusual market conditions

pursuant to current Rule 6.6(b)(v).

Current Rule 6.6 (b)(v) allows Floor

Officials to ‘‘[t]ake such other actions as

are deemed necessary in the interest of

maintaining a fair and orderly market.’’

The Commission agrees with the

Exchange that by expressly granting its

Floor Official the discretion to turn off

RAES during a fast market, Exchange

members and the public will be

properly notified that such action may

be taken when a fast market has been

declared.

The Commission also believes that it

is appropriate to allow the senior person

then in charge of the Exchange’s Control

Room the authority to suspend the ten

contract firm quote requirement if there

is a systems malfunction or other

circumstance that affects the Exchange’s

ability to disseminate or update market

quotes. The type of circumstances that

might impair the Exchange’s ability to

disseminate or update market quotes in

a timely and accurate manner, include,

but are not limited to, outages of the

Exchange’s autoquote system,

communication disruptions between the

Exchange and the Processor for the

Options Price Reporting Authority, and

the unavailability of market data from

the underlying market and the CBOE.13

The Commission notes that the

proposed rule change requires the

senior person in charge of the

Exchange’s Control Room to

immediately seek approval from two

Floor Officials after exercising such

authority. The Commission believes that

this proposed rule change provides a

reasonable mechanism for the CBOE to

suspend the market maker’s obligations

under Rule 8.51 when the Exchange is

unable to disseminate the then current

and accurate quote.

It is therefore ordered, pursuant to

section 19(b) (2) of the Act,14 that the

proposed rule change (File No. SR–

CBOE–95–52) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.15

Jonathan G. Katz,

Secretary.

[FR Doc. 96–00020 Filed 1–2–96; 8:45 am]

BILLING CODE 8010–01–M