Federal Register / Vol. 61, No. 17 / Thursday, January 25, 1996 / Notices 2321

1Certain of the CTA Plan Participants submitted

the initial version of the CTA Plan to the

Commission on March 2, 1973. The Commission

declared that plan effective as of May 17, 1974. (See

Securities Exchange Act Release No. 10787 (May

10, 1974), 39 FR 17799.) The Participants filed a

restatement and amendment of that Plan (the

‘‘Restated CTA Plan’’) to the Commission on May

12, 1980. The Commission approved the Restated

CTA Plan on July 16, 1980. (See Securities

Exchange Act Release No. 16983 (July 16, 1980) 45

FR 49414.)

2 In their filing with the Commission, the

participants enclosed the following attachments:

Attachment 1—The proposed Second

Restatement of the CTA Plan, including its exhibits:

Exhibit A—Restated Articles of Association of

Consolidated Tape Association.

Exhibit B—Forms of Processor Contracts.

Exhibit C—Form of Vendor Contract (i.e., the

‘‘Consolidated Vendor Form’’, as the Participants

propose to amend it).

Exhibit D—Forms of Subscriber Contracts

(including the ‘‘Subscriber Addendum’’, which the

Participants propose to add).

Exhibit E—Schedules of Charges.

Attachment 2—A second version of the proposed

Second Restatement of the CTA Plan, marked to

show changes from the Restated CTA Plan as

currently in effect.

Attachment 3—A memorandum describing the

proposed changes incorporated into the Second

Restatement of the CTA Plan and the reasons for

those changes.

Attachment 4—A second version of the proposed

Consolidated Vendor Form, marked to show

changes from the version that the Participants

currently use.

Attachment 5—A memorandum describing the

proposed changes to the Consolidated Vendor Form

and the reasons for those changes.

Attachment 6—A memorandum describing the

use and significant provisions of the Subscriber

Addendum.

3The Participants submitted the version of the

Consolidated Vendor Form currently in use to the

Commission on October 12, 1989. The Commission

published a notice of the effectiveness of the

Consolidated Vendor Form on September 6, 1990.

(See Securities Exchange Act Release No. 28407

(September 6, 1990) 55 FR 37276.)

4The Participants propose to substitute the

proposed version of the Consolidated Vendor Form

for the existing version in the Second Restatement

of the CTA Plan.

5The Subscriber Addendum would be added to

Exhibit D of the Second Restatement of the CTA

Plan.

6AMEX and NYSE submitted the version of the

CQ Plan currently in effect to the Commission on

July 25, 1978. The Commission granted permanent

approval of that plan effective as of January 22,

1980. (See Securities Exchange Act Release No.

16518 (January 22, 1980), 45 FR 6521.)

7The Participants have enclosed the following

attachments:

Attachment 1—The proposed Restated CQ Plan,

including its exhibits:

Exhibit A—Form of Exchange-Processor Contract.

Exhibit B—Form of Association-Processor

Contract.

Exhibit C—Form of Vendor Contract (i.e., the

‘‘Consolidated Vendor Form’’, as the Participants

propose to amend it).

Exhibit D—Forms of Subscriber Contracts

(including the ‘‘Subscriber Addendum’’, which the

Participants propose to add).

Exhibit E—Schedules of Charges.

Attachment 2—A second version of the proposed

Restated CQ Plan, marked to show changes from the

CQ Plan as currently in effect.

Attachment 3—A memorandum describing the

proposed changes incorporated into the Restated

CQ Plan and the reasons for those changes.

8See Section XIII of the proposed Second

Restatement of the CTA Plan (Concurrent Use of

Facilities).

9See Section X of the proposed Restated CQ Plan

(Concurrent Use of Facilities).

Dated: January 19, 1996

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–1084 Filed 1–24–96; 8:45 am]

BILLING CODE 8010–01–P

[Release No. 34–36725; File No. SR–CTA/

CQ–96–1]

Consolidated Tape Association; Notice

of Filing of Proposed Restatements

and Amendments to the Restated

Consolidated Tape Association Plan

and the Consolidated Quotation Plan

January 17, 1996.

Pursuant to Rule 11Aa3–2 of the

Securities Exchange Act of 1934

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

December 26, 1995, the Consolidated

Tape Association (‘‘CTA’’) and

Consolidated Quotation (‘‘CQ’’) Plan

Participants filed with the Securities

and Exchange Commission

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

to the Restated CTA Plan and CQ Plan.

The Commission is publishing this

notice to solicit comments from

interested persons on the amendments.

I. General Overview of the

Amendments

A. Second Restatement of the CTA Plan

The Participants propose to restate

and amend the Restated CTA Plan.1 The

restatement (the ‘‘Second Restatement of

the CTA Plan’’) would incorporate into

the Restated CTA Plan the 17

substantive amendments, and 16

charges amendments, to the Restated

CTA Plan that the Commission has

previously approved and would

incorporate the additional amendments

described below and in the attachments

submitted to the Commission.2

In connection with the proposed

amendments, the Participants are also

proposing (1) to revise the form of

agreement 3 into which the Participants

require vendors and certain end users to

enter (the ‘‘Consolidated Vendor

Form’’)4 and (2) to introduce a form of

addendum (the ‘‘Subscriber

Addendum’’)5 that the Participants,

under appropriate circumstances, would

allow vendors to attach to, or to

incorporate into, agreements with

certain subscribers as a surrogate for the

form of agreement that the Exchange

currently requires subscribers to

execute.

B. Restated CQ Plan

The Participants in the CQ Plan

propose to restate and amend the CQ

Plan.6 The restatement (the ‘‘Restated

CQ plan’’) would incorporate into the

CQ Plan the 21 substantive

amendments, and 6 charges

amendments, to the CQ Plan that the

Commission has previously approved

and would incorporate the additional

amendments described below and in the

attachments. 7

The Participants are also proposing to

sue the revised Consolidated Vendor

Form and the subscriber Addendum in

connection with the Restated CQ Plan,

in the same manner as in the proposed

Second Restatement of the CTA Plan.

II. Description and Purpose of the

Amendments

A. Rule 11Aa3–2

Attachment 3 to each of the Plan

binders submitted to the Commission

describes in greater detail the purposes

of the proposed changes. A brief

overview of those changes follows:

1. Concurrent Use Securities

The Participants propose to

significantly redraft Section XI(d)(i)

(‘‘Concurrent Use’’) and Section XIV

(‘‘Reporting of Other Transactions’’) of

the Restated CTA Plan 8 and Section XI

of the CQ Plan (‘‘Other Uses of Facilities

Utilized by the System’’),9 which

sections govern the concurrent use of

CTA and CQ facilities. In particular, the

scope of concurrent use information

would be broadened to include virtually

all Participant securities (including

bonds) and index information. The new

sections would also clarify that

information sent out pursuant to

concurrent use authority is subject to

the same rights and privileges as

information relating to Eligible

Securities, although the sections would

also affirm the primacy of information

relating to Eligible Securities.

The proposed Consolidated Vendor

Form would be modified to extend the

coverage of the Consolidated Vendor

Form’s terms and conditions to

concurrent-use securities.

2. Housekeeping

The Second Restatement of the CTA

Plan would incorporate the several

amendments to the CTA Plan that CTA

has adopted and the Commission has

approved since the Restated CTA Plan

first became effective. Similarly, the

Restated CQ Plan would incorporate the
2322 Federal Register / Vol. 61, No. 17 / Thursday, January 25, 1996 / Notices

10Cf. Section XI of the Restated CTA Plan

(Financial Matters) to proposed Section XII of the

Second Restatement of the CTA Plan (Financial

Matters).

11See Section XIV of the proposed Second

Restatement of the CTA Plan (Miscellaneous) and

Section XI of the proposed Restated CQ Plan

(Miscellaneous).

several amendments to the CQ Plan that

the Operating Committee has adopted

and the Commission has approved since

the CQ Plan first became effective.

In several instances, the Participants

propose to amend the language and

format of the two Plans in order to cause

counterpart provisions of the two Plans

to comport more closely. In other

instances, the Participants propose to

delete old, outdated language.

A new ‘‘definitions’’ section (Section

I) would be added to the CTA Plan,

similar in concept to Section I of the CQ

Plan (‘‘Definitions’’). The Participants

propose to add or refine various

definitions in order to cause them to

comport more closely with current

market data business practices and to

improve the Plans’ readability. In

addition, the CTA Plan would be

revised to take advantage of the drafting

economies that the newly defined terms

permit.

New economies would be introduced

into the ‘‘Financial Matters’’ section of

the CTA Plan 10 by addressing Network

A and Network B simultaneously, rather

than through separate provisions. (This

same drafting technique already exists

in the CQ Plan.) Accomplishing this

task requires certain organizational

changes to that section. Theses changes

are not intended to effect the substance

of the ‘‘Financial Matters’’ section.

The Participants propose to relocate

the ‘‘boilerplate’’ sections of the Plans

(e.g., ‘‘Counterparts’’ and ‘‘Effective

Dates’’) to a new ‘‘Miscellaneous’’

section.11 ‘Governing Law’’ and

‘‘Section Headings’’ provisions would

be added to those sections.

3. Receipt and Use of Market Data

Section IX of the Second Restatement

of the CTA Plan (‘‘Receipt and Use of

CTA Information’’) and Section VII of

the Restated CQ Plan (‘‘Receipt and Use

of Quotation Information’’), which deal

with the receipt and use of market

information, would be significantly

redrafted. The changes would include

the following.

The proposed ‘‘Receipt and Use’’

sections would make generic the terms

and conditions pursuant to which

vendors and subscribers can receive and

use information. The proposed changes

would also afford the Participants

flexibility in determining which

vendors and subscribers need to enter

into contracts in order to receive and

use information and which terms and

conditions apply.

The proposed ‘‘Receipt and Use’’

sections would accommodate current

contract and administrative practices,

yet would also accommodate

anticipated future practices that

changing technology and the perfection

of the ‘‘information superhighway’’ are

likely to require.

The proposed ‘‘Receipt and Use’’

sections would omit specific references

to nonprofessional services. From a

technology standpoint, the Participants

feel that the distinction between the

level of services that vendors make

available to nonprofessional subscribers

as opposed to professional subscribers is

small. Rather, the Participants state that

the distinction is essentially a rate

matter, and that they are not proposing

to distribute that rate distinction at this

time.

The proposed ‘‘Receipt and Use’’

sections would omit equipment testing

arrangements. The Participants claim

that equipment testing provisions have

become moot because equipment testers

in today’s environment invariably

qualify as ‘‘Service Facilitators’’ under

the Consolidated Vendor Form.

4. Financial Matters

Section XII of the proposed Second

Restatement of the CTA Plan

(‘‘Financial Matters’’) and Section IX of

the proposed Restated CQ Plan

(‘‘Financial Matters’’) would change as

follows:

a. As a housekeeping measure, all of

the language that discusses the sharing

of revenues and expenses in the first

years of the Plans would be removed.

b. The Restated CQ Plan would

replace the existing CQ Plan’s definition

of ‘‘Annual Share’’ with a cross

reference to the CTA Plan definition of

‘‘Annual Share’’.

5. The Consolidated Vendor Form

The proposed Consolidated Vendor

Form would modify the version of the

Consolidated Vendor Form currently in

use in that it would accommodate the

current use initiatives described above

and would provide the Participants with

greater flexibility. In particular, the

proposed Consolidated Vendor Form:

a. Would newly define several terms

that have a long history of use in the

market data industry (e.g.,

‘‘interrogation service’’, ‘‘market

minder’’, ‘‘ticker display’’);

b. Would simplify the definitions of

several terms;

c. Would expand the scope of some

types of market data in order to comport

with the broadened notion of

‘‘concurrent use’’ that the Participants

are proposing to add to the Plans;

d. Would introduce the Subscriber

Addendum and provide for its

modification and enforcement;

e. Would afford the Participants

greater flexibility in prescribing contract

and other requirements for subscriber

services, including the use of the

Subscriber Addendum or such

alternative requirements as the

Participants may prescribe; and

f. Would omit the concepts of limited

access services and nonprofessional

subscriber services, in order to comport

with similar changes to the Plans.

6. Subscriber Addendum

The Participants claim that the use of

the Subscriber Addendum would

provide an alternative to vendors in

certain circumstances as a replacement

for the forms of subscriber agreement

that the Participants currently require

subscribers to execute. In practice,

subscribers would not enter into the

Subscriber Addendum with the

Participants. Rather, vendors would

incorporate the Subscriber Addendum

into their agreements with subscribers.

The Participants state that vendors

have been prompting exchanges to

develop and adopt a common form of

subscriber agreement and the Financial

Information Services Division of the

Information Industry Association has

endorsed an initiative of this nature for

more than two years. The Subscriber

Addendum represents a partial response

to that effort, in that it contains only

those terms and conditions that the

Participants deem absolutely essential.

In many cases, it would eliminate a

separate document that today’s practices

require.

The initial use of the Subscriber

Addendum is intended for vendor

services in respect of which the

Participants do not bill end users

directly, but rather impose the payment

obligation on the vendor.

The Participants view the Subscriber

Addendum concept as an integral part

of their ‘‘usage-based fees’’ initiative.

Currently, such fees are the subject of

pilot tests. They are designed to

streamline the current rate structure and

to promote the widespread

dissemination of market data.

7. Governing or Constituent Documents

The proposed restatements do not

require any new governing or

constituent documents relating to SIAC

or any other person authorized to

implement or administer the Plans on

the Participants’ behalf.
Federal Register / Vol. 61, No. 17 / Thursday, January 25, 1996 / Notices 2323

8. Implementation of Amendment

The restated Plans would take effect

upon Commission approval. The

Participants then intend to notify

vendors and other interested parties,

both in writing and through verbal

contact, of the new Consolidated

Vendor Form and the Subscriber

Addendum.

9. Development and Implementation

Phases

The Participants intend to implement

the new Consolidated Vendor Form and

the Subscriber Addendum on a vendorby-vendor basis, as appropriate, over the

next few years. After Commission

approval, the Participants would expect

all new accounts that are required to

execute the vendor form of agreement to

execute the new Consolidated Vendor

Form. As for the 500 or so parties that

have executed the present version of the

Consolidated Vendor Form, the

Participants intend to convert those

organizations to the proposed version of

the Consolidated Vendor Form in an

orderly manner over a period of 12 to

18 months.

The Participants expect to make the

Subscriber Addendum available for

vendor use once the Commission

approves it. Of course, the Subscriber

Addendum would only be available to

vendors that have executed the

proposed Consolidated Vendor Form

and that offer the types of services for

which the use of the Subscriber

Addendum is appropriate.

10. Analysis of Impact on Competition

The Participants do not believe that

any of the proposed changes would

adversely impact or lessen competition.

Instead, the Participants believe that the

proposed Consolidated Vendor Form

and the Subscriber Addendum may

facilitate the entry of new parties into

the market data industry because of the

‘‘user friendly’’ nature of those

documents.

11. Written Understandings or

Agreements Relating to Interpretation

of, or Participation in, Plan

The Participants do not anticipate that

they will enter into any new written

understandings or agreements relating

to interpretations of the restated Plans

or to conditions for becoming a sponsor

or participant in either Plan.

12. Approval by Sponsors in

Accordance with Plan

Each of the Participants has approved

the restatements of, and amendments to,

both Plans in accordance with the Plans’

terms.

13. Description of Operation of Facility

Contemplated by the Proposed

Amendment

The proposed amendments to the

Plans would not have any impact on the

manner in which CTA and CQ facilities

are operated.

14. Terms and Conditions of Access

As explained in greater detail above

and in Attachment 5 and Attachment 6

to the Second Restatement of the CTA

Plan, the proposed revisions to the

Consolidated Vendor Form and the

introduction of the Subscriber

Addendum would modify the terms and

conditions under which brokers, dealers

and others would be granted access.

However, the Participants believe that

the changes work to the net benefit of

data recipients because the proposed

changes to the Consolidated Vendor

Form and the substitution (in

appropriate cases) of the Subscriber

Addendum for the forms of subscriber

agreement currently in use permit more

‘‘use friendly’’ terms and conditions

than do current practices and, especially

in the case of the Subscriber

Addendum, streamline the procedures

for subscriber processing.

15. Method of Determination and

Imposition, and Amount of, Fees and

Charges

In restating and amending the Plans,

the Participants are not proposing to

make any changes to (a) the methods by

which they determine or impose fees or

charges of (b) the amount of such fees

or charges.

16. Method and Frequency of Processor

Evaluation

In respect of changes in the methods

of evaluating processor performance,

please see the discussion of proposed

Sections V(d) (‘‘Review of Processor’’)

and V(e) (‘‘Notice to SEC of Processor

Reviews’’) of the Second Restatement of

the CTA Plan set forth in Attachment 3

to that Plan and the discussion of

proposed Sections V(c) (‘‘Review of

Processor’’) and V(d) (‘‘Notice to SEC of

Processor Reviews’’) of the Restated CQ

Plan set forth in Attachment 3 to that

Plan.

17. Dispute Resolution

In restating and amending the Plans,

the Participants are not proposing to

make any change to the method by

which disputes arising in connection

with the Plans will be resolved.

B. Rule 11Aa3–1 (In Respect of the CTA

Plan Only)

1. Listed Securities

In restating and amending the CTA

Plan, the Participants do not intend to

make any change to the listed equity

securities or classes of such securities in

respect of which the CTA Plan would

require transaction reports. However, as

explained in greater detail in

Attachment 3 to the CTA Plan, the

amendments would expand the scope of

‘‘concurrent use’’ under the CTA Plan

and would therefore expand the

universe of securities in respect of

which the CTA Plan would permit

transaction reports.

2. Reporting Requirements

In restating and amending the CTA

Plan, the Participants do not intend to

make any change to the reporting

requirements for brokers or dealers for

transactions in listed securities.

3. Manner of Collecting, Processing,

Sequencing, Making Available and

Disseminating Last Sale Information

In restating and amending the CTA

Plan, the Participants do not intend to

change the manner of collecting,

processing or sequencing last sale

information. As for changes in the

manner of making available and

disseminating last sale information,

please see the discussion of Section IX

of the Second Restatement of the CTA

Plan (‘‘Receipt and Use of CTA

Information’’) set forth in Attachment 3

to that Plan.

4. Manner of Consolidation

In restating and amending the CTA

Plan, the Participants do not intend to

make any change to the manner in

which transaction reports are

consolidated.

5. Standards and Methods Ensuring

Promptness, Accuracy and

Completeness of Transaction Reports

In restating and amending the CTA

Plan, the Participants do not intend to

make any change to the standards and

methods by which the promptness of

reporting, and accuracy and

completeness of transaction reports, is

ensured.

6. Rules and Procedures Addressed to

Fraudulent or Manipulative

Dissemination

The participants state that the

proposed amendments to the CTA Plan

do not impact the rules and procedures

that ensure that last sale information

will not be disseminated in a fraudulent

or manipulative manner.
2324 Federal Register / Vol. 61, No. 17 / Thursday, January 25, 1996 / Notices

12 17 CFR 200.30–3(a)(27) (1989).

1 15 U.S.C. § 78s(b)(1) (1988).

2 17 CFR 240.19b–4 (1994).

3Securities Exchange Act Release No. 30944 (July

21, 1992), 57 FR 33376 (July 28, 1992) (approval

order for SR–CBOE–92–13).

4The CBOE notes that in September 1992, the

average daily SPX index option volume during

expiration week was 86,682 contracts and open

interest was 1.3 million contracts. In comparison,

in March 1995, the average daily SPX index option

volume during expiration week was 208,678

contracts and open interest was 1.2 million

contracts. In each of the years 1992 through 1994,

approximately 300 market-maker exemptions from

SPX position limits were granted. In contrast, from

January through November 20, 1995, 455 marketmaker exemptions from SPX position limits were

granted.

7. Terms of Access to Transaction

Reports

As explained in greater detail above

and in Attachment 5 and Attachment 6

to the CTA Plan, the proposed revisions

to the Consolidated Vendor form and

the introduction of the Subscriber

Addendum would modify the terms and

conditions of access to last sale

information. The Participants believe

that the changes work to the net benefit

of the investor community because the

proposed changes to the Consolidated

Vendor Form and the substitution (in

appropriate cases) of the Subscriber

Addendum for the forms of subscriber

agreement currently in use permit more

‘‘user friendly’’ terms and conditions

than do current practices and, especially

in the case of the Subscriber

Addendum, streamline the procedures

for subscriber processing.

8. Identification of Marketplace of

Execution

The Participants state that the

proposed amendments are intended to

have no impact on the requirement that

vendor displays of last sale information

identify the marketplace of execution.

III. Solicitation of Comments

Rule 11Aa3–2(c)(2) under the Act

provides that the proposed amendment

shall be approved by the Commission

with such changes or subject to such

conditions as the Commission may

deem necessary or appropriate in the

public interest, for the protection of

investors and maintenance of fair and

orderly markets, to remove impediments

to and perfect the mechanisms of a

National Market System, or otherwise in

furtherance of the purposes of the Act

within 120 days of the date of

publication of notice of filing, or within

such longer period as the Commission

may designate up to 180 days of such

date pursuant to Rule 11Aa3–2(c)(2).

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 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 CTA/CQ. All

submissions should refer to the file

number in the caption above and should

be submitted by February 15, 1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.12

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–1182 Filed 1–24–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36738; File No. SR–CBOE–

96–01]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Board Options Exchange,

Inc., to Increase SPX Position and

Exercise Limits, to Increase SPX Firm

Facilitation, Index Hedge, and Money

Managers Exemptions, and To Extend

Broad-Based Index Hedge Exemption

to Broker-Dealers

January 19, 1996.

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 8,

1996, 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 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 CBOE proposes to amend

Exchange Rule 24.4, and other related

rules, to increase the S&P 500 index

option (‘‘SPX’’) position and exercise

limits, to increase the SPX firm

facilitation, index hedge, and money

manager exemptions, to extend the

broad-based index hedge exemption to

broker-dealers, and to expand the types

of qualified portfolios for the index

hedge exemption. The text of the

proposed rule change is available at the

Office of the Secretary, the CBOE, and

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

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 aspects of such statements.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

The CBOE is proposing a number of

revisions to Exchange Rule 24.4, the

position limit rule for broad-based index

options, as well as other related

Exchange rules. First, member firms

have expressed to the CBOE their need

for relief from the current SPX position

and exercise limits, which have not

increased since 1992.3 Between 1992

and the present, however, volume in the

SPX index option class has more than

doubled, and open interest has

remained consistently high.4 The CBOE

believes that by increasing the existing

45,000 contract limit to 100,000

contracts, the investing public as well as

CBOE members and member firms will

be afforded greater opportunity and

flexibility to use SPX options for their

hedging needs. The CBOE does not

believe that the higher limit will

increase any potential for market

disruption.

To enhance its ability to monitor for

unhedged, speculative positions as well

as to create a database of non-standard

hedge practices, the CBOE will add a

reporting requirement for accounts

having SPX positions in excess of

45,000 contracts on the same side of the

market. This reporting requirement will

allow the CBOE to gather data on

hedging practices that do not fit into the

CBOE definition of a qualified portfolio.