32470 Federal Register / Vol. 61, No. 122 / Monday, June 24, 1996 / Notices

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

2 17 CFR 240.19b–4.

3The Exchange submitted Amendment No. 1 to

clarify the duties of the OEX Market Performance

Committee, as described more fully herein. See

Letter from Timothy Thompson, Senior Attorney,

CBOE, to John Ayanian, Attorney, Office of Market

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

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

dated June 4, 1996 (‘‘Amendment No. 1’’).

4The ‘‘expiration month’’ is from the Monday

following an expiration date to the next expiration

date. For example, the July expiration month starts

on June 24, 1996, and ends on July 19, 1996.

5The OEX Market Performance Committee was

created in November 1995 in order to evaluate the

performance of the OEX trading crowd in fulfilling

its general market-related duties and to make

recommendations on how to improve trading crowd

performance. The OEXMPC will, among other

things, recommend rules and programs to enhance

market performance, respond to market

performance related issues in the OEX trading

crowd including RAES and firm quote concerns,

monitor the opening rotation procedures used in

OEX, and conduct OEX crowd evaluation surveys.

See Amendment No. 1, supra note 3.

6Telephone Conversation between Timothy

Thompson, Senior Attorney, CBOE, to John

Ayanian, Attorney, OMS, Market Regulation,

Commission, on June 12, 1996.

for hearing will not be entertained

absent a determination by the

Commission, the presiding officer or the

presiding Atomic Safety and Licensing

Board that the petition and/or request

should be granted based upon a

balancing of the factors specified in 10

CFR 2.714(a)(1) (i)–(v) and 2.714(d).

For further details with respect to this

action, see the application for

amendment dated June 10, 1996, which

is available for public inspection at the

Commission’s Public Document Room,

the Gelman Building, 2120 L Street,

NW., Washington, DC, and at the local

public document room located at the

Salem Free Public Library, 112 West

Broadway, Salem, New Jersey.

Dated at Rockville, Maryland, this 18th day

of June 1996.

For the Nuclear Regulatory Commission.

Leonard N. Olshan,

Project Manager, Project Directorate I–2,

Division of Reactor Projects—I/II, Office of

Nuclear Reactor Regulation.

[FR Doc. 96–15988 Filed 6–21–96; 8:45 am]

BILLING CODE 7590–01–P

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–37313; File No. SR–CBOE–

96–30]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Board Options Exchange,

Incorporated Relating to Its Retail

Automatic Execution System

Participation Requirements in OEX

Options

June 14, 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 May 9,

1996, the Chicago Board Options

Exchange, Incorporated (‘‘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

Exchange submitted to the Commission

Amendment No. 1 on June 12, 1996.3

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 amend its

rules respecting eligibility to participate

in the CBOE’s Retail Automatic

Execution System (‘‘RAES’’) for

transactions in Standard & Poor’s 100

Index (‘‘OEX’’) options. The text of the

proposed rule change is available at the

Office of the Secretary, the Exchange,

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

the proposed rule change. The text of

these statements may be examined at

the places specified in Item IV below.

The Exchange has prepared summaries,

set forth in Section (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 purpose of the proposed rule

change is to amend Rule 24.17 (‘‘RAES

Eligibility in OEX’’) to require

individual market-makers, who are

eligible to participate on OEX RAES, to

log onto OEX RAES any time they are

present in the OEX trading crowd until

the expiration date if they have logged

onto OEX RAES at any earlier time in

that expiration month.4 This rule

proposal would conform the OEX RAES

eligibility rule to a similar requirement

in the SPX RAES eligibility rule and the

RAES eligibility rule for equity options.

The rule proposal also would move

authority over certain of the provisions

of the rule from the OEX Floor

Procedure Committee to the OEX

Market Performance Committee

(‘‘OEXMPC’’). The OEXMPC was

recently formed by the Exchange to

handle market performance issues of the

OEX trading post, including RAES

related issues.5 The Exchange represents

that it will issue a regulatory circular to

its membership outlining the duties to

be performed by the OEXMPC.6

By requiring market-makers to log

onto OEX RAES each time they are in

the trading crowd, the Exchange expects

to ensure that there is always adequate

participation in RAES to handle the

small customer orders that are eligible

for RAES, even in the busiest market

conditions, without having to assign an

inordinate number of RAES trades to

any particular market-maker. Currently,

the Rule does not permit the Exchange

to require RAES participation by

members of the OEX trading crowd in

the event there appears to be inadequate

participation. The Exchange believes,

however, that this proposed rule change

will help to avoid forced participation.

The Exchange believes that the

proposed rule change is consistent with

Section 6 of the Act, in general, and

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

in particular, in that it is designed to

promote just and equitable principles of

trade, to foster cooperation with persons

engaged in facilitating and clearing

transactions in securities, and to protect

investors and the public interest.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any 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 proposed

rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Because the foregoing proposed rule

change: (1) Does not significantly affect

the protection of investors or the public

interest; (2) does not impose any

significant burden on competition; (3)

was provided to the Commission for its

review at least five days prior to the

filing date; and (4) does not become

operative for 30 days from June 12,

1996,7 the rule change proposal has
Federal Register / Vol. 61, No. 122 / Monday, June 24, 1996 / Notices 32471

7Because the Exchange filed Amendment No. 1

subsequent to the original filing date, the 30-day

period commences on the filing date of Amendment

No. 1.

8 17 CFR 200.30–3(a)(12) (1994).

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

2Letter from James C. Yong, First Vice President

and General Counsel, OCC, to Jerry W. Carpenter,

Assistant Director, Division of Market Regulation,

Commission (March 19, 1996).

3Securities Exchange Act Release No. 36988

(March 20, 1996), 61 FR 13558.

4The exchanges include the American Stock

Exchange, the Chicago Board Options Exchange, the

New York Stock Exchange, the Pacific Stock

Exchange, and the Philadelphia Stock Exchange.

5Section 11 of Article VI sets forth the procedures

by which adjustments are made to options when

there is a distribution, stock split, rights offering,

reorganization or similar event with respect to the

underlying security.

6For a complete description of FX Index Options,

refer to Securities Exchange Act Release No. 35149

(January 3, 1995), 60 FR 158 [File No. SR-OCC-94-

08] (order approving proposed rule change).

7 15 U.S.C. 78q–1(b)(3)(F) (1988).

become effective pursuant to Section

19(b)(3)(A) of the Act and Rule 19b–

4(e)(6) thereunder. In particular, the

Commission believes the proposal

would qualify as a ‘‘noncontroversial

filing’’ in that the proposed standards

do not significantly affect the protection

of investors or the public interest and do

not impose any significant burden on

competition. At any time within 60 days

of the filing of the 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, 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 SR–CBOE–96–30 and

should be submitted by July 15, 1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Jonathan G. Katz,

Secretary.

[FR Doc. 96–16029 Filed 6–21–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34-37315; File No. SR-OCC95-18]

Self-Regulatory Organizations; The

Options Clearing Corporation; Order

Approving a Proposed Rule Change

Clarifying Rules Regarding the

Unavailability of Current Index Values

June 17, 1996.

On November 24, 1995, The Options

Clearing Corporation (‘‘OCC’’) filed with

the Securities and Exchange

Commission (‘‘Commission’’) a

proposed rule change (File No. SR-OCC95-18) pursuant to Section 19(b)(1) of

the Securities Exchange Act of 1934

(‘‘Act’’).1 On March 19, 1996, OCC

amended the proposed rule change.2

Notice of the proposal was published in

the Federal Register on March 27,

1996.3 No comment letters were

received. For the reasons discussed

below, the Commission is approving the

proposed rule change.

I. Description of the Proposal

OCC has determined that certain

technical changes should be made to its

rules to clarify the respective rights and

responsibilities of OCC and the options

exchanges (‘‘exchanges’’) 4 with respect

to the reporting of current index values

and the determination of settlement

values. Specifically, OCC is amending

Article XVII, Section 4 of its by-laws,

which empowers OCC to fix an exercise

settlement amount in the event that

OCC determines that the current index

value is unreported or otherwise

unavailable, to clarify that OCC has the

authority to fix an exercise settlement

amount whenever the primary market

for the securities representing a

substantial part of the value of an

underlying index is not open for trading

at the time when the current index

value i.e., the value used for exercise

settlement purposes) ordinarily would

be determined. OCC believes this

authority is implicit in the language of

the present by-law because in such

circumstances the current index value

would generally be ‘‘unreported or

otherwise unavailable;’’ however, OCC

believes the rule change will make

OCC’s authority explicit.

In addition, the rule change assigns

the responsibility for fixing exercise

settlement amounts in situations where

the current index value is unavailable or

inaccurate to a panel consisting of

OCC’s Chairman and two designated

representatives of each exchange on

which the affected series is open for

trading, one of whom shall be such

exchange’s representative on OCC’s

Securities Committee. This procedure to

assign the decision-making

responsibility to an exchange-controlled

panel conforms with the procedures

used in making determinations with

respect to adjustments made pursuant to

Article VI, Section 11.5 The rule change

authorizes the panel to fix the exercise

settlement amount based on its

judgment as to what is appropriate for

the protection of investors and the

public interest taking into account

factors such as fairness to holders and

writers and the maintenance of fair and

orderly markets. The panel may, but is

not restricted to, fixing the exercise

settlement amount on the basis of the

reported level of the underlying index at

the close of trading on the last preceding

trading day for which a closing index

level was reported.

Identical changes also are being made

to Article XXIII, Section 5, which

governs the fixing of exercise settlement

amounts for Flexibly Structured Index

Options Denominated in a Foreign

Currency (‘‘FX Index Options’’). Under

these proposed changes, the situation

contemplated by the last two sentences

of the definition of ‘‘expiration date’’ in

Article XXIII, Section 1.E.(3) (i.e., where

the primary markets for underlying

securities representing a substantial part

of the value of an index is closed on an

expiration date) will be explicitly

covered by Article XXIII, Section 5;

therefore, the last two sentences of

Article XXIII, Section 1.E. (3) will be

deleted.

The remainder of the changes to

OCC’s by-laws are technical changes

that are being made primarily for the

purpose of conforming OCC’s by-laws to

changes made in the Commission’s

approval of FX Index Options.6

II. Discussion

Section 17A(b)(3)(F) 7 requires that

the rules of a clearing agency be

designed to promote the prompt and

accurate clearance and settlement of