[Federal Register Volume 62, Number 32 (Tuesday, February 18, 1997)]
[Notices]
[Pages 7285-7286]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3918]
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SECRUTIES AND EXCHANGE COMMISSION
[Release No. 34-38262; File No. SR-CBOE-97-05]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Chicago Board Options
Exchange, Incorporated Relating to Waiver of Transaction Charges for
FLEX Equity Options
February 10, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on January 30, 1997, 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.
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\1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The CBOE proposes to extend its waiver of Exchange fees on
transactions in Equity FLEX options traded on the Exchange until
further notice. 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
Purpose
In conjunction with the start of trading of FLEX Equity options,
the Exchange waived Exchanges fees related to transactions in Equity
FLEX until January 31, 1997. The Exchange has now determined to extend
the waiver of the transaction fees because the Exchange believes that
the waiver will encourage trading in this new product and 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 intends to establish transaction charges for FLEX
Equity options at some time in the future.\2\ However, the Exchange is
now proposing to waive the transaction fees until further notice. The
fees affected and the amount of the fees absent any reduction or rebate
\3\ 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 trade
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 forgoing fee changes are being
[[Page 7286]]
implemented by the Exchange pursuant to CBOE Rule 2.22.
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\2\ The Commission notes that any imposition of transaction
charges for FLEX Equity Options would have to be submitted to the
Commission pursuant to Section 19(b) of the Act.
\3\ 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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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \4\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \5\ in particular, in that it
is designed to promote just and equitable principles of trade, 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.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5)
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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) \6\ of the Act and subparagraph (e) of
Rule 19b-4 \7\ 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.
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(e).
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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-97-05 and should be
submitted by March 11, 1997.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-3918 Filed 2-14-97; 8:45 am]
BILLING CODE 8010-01-M