[Federal Register Volume 61, Number 213 (Friday, November 1, 1996)]
[Notices]
[Page 56586]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27997]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37871; Filed No. SR-CBOE-96-65]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Chicago Board Options
Exchange, incorporated Relating to Exchange Fees
October 25, 1996.
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
October 24, 1996, the Chicago Board Options Exchange, Incorporated
(``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 CBOE. 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 is proposing to waive Exchange fees on transactions in
Equity FLEX options from the start of trading of Equity FLEX options,
which is scheduled to begin on October 24, 1996, until January 31,
1997. 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 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, Proposed Rule Change
The purpose of this proposed rule change is to waive Exchange fees
related to transactions in Equity FLEX options from the start of
trading of these options on the Exchange until January 31, 1997. The
Exchange plans to begin trading Equity FLEX options on October 24,
1996. The fees affected and the amount of the fees absent any reduction
or rebate \1\ are: (1) Exchange transaction fees, which are $.05 per
contract side for market-makers, $.06 for member firm proprietary
trades, $.15 for customer trades for options under $1, and $.30 for
customer trades for options of $1 or more; (2) trade match fees, which
are $.04 per contract side for all trades; and (3) floor broker fees,
which are $.03 per contract side for all trades. The foregoing fee
changes are being implemented by the Exchange pursuant to CBOE Rule
2.22. The Exchange will distribute a circular to its members to notify
them of this waiver of Exchange fees.
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\1\ The fees may actually be less than these amounts pursuant to
the Exchange's Prospective Fee Reduction Schedule, the Customer
Large Trade Discount Program, and rebate programs that have been
filed with the Commission as part of the Exchange's fee schedule.
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The Exchange is adopting this waiver of fees related to
transactions in Equity FLEX options in order to promote trading in the
these options at the outset of their trading on the Exchange. The
Exchange believes that the reduction in the fees may encourage more
participation in the trading of these options and enhance the prospect
that Equity FLEX options will prosper on the Exchange in the future.
The fee reduction also will place the Exchange in a position to compete
effectively for business in Equity FLEX options with other exchanges
trading the same product.
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act, in general, and furthers the objectives
of Section 6(b)(4) of the Act in particular, in that it is designed to
provide for the equitable allocation of reasonable dues, fees, and
other changes among CBOE members.
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 rule change establishes or changes a due,
fee, or other charge imposed by the Exchange, it 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 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 in 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-96-65 and should be
submitted by November 22, 1996.
For the Commission, by the Division of market Regulation,
pursuant to delegated authority.\2\
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\2\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-27997 Filed 10-31-96; 8:45 am]
BILLING CODE 8010-01-M