Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Chicago Board Options Exchange, Inc. Relating to the Market-Maker Surcharge Fee Schedule

[Federal Register Volume 64, Number 164 (Wednesday, August 25, 1999)]
[Notices]
[Pages 46465-46466]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-21979]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41752; File No. SR-CBOE-99-42]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Board Options 
Exchange, Inc. Relating to the Market-Maker Surcharge Fee Schedule

August 17, 1999.
    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 August 2, 1999, 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 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).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The CBOE is proposing to make changes to its fee schedule pursuant 
to CBOE Rule 2.40, Market-Maker Surcharge for Brokerage.\3\
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    \3\ See Securities Exchange Act Release No. 41121 (February 26, 
1999), 64 FR 11523 (March 9, 1999) (order approving CBOE Rule 2.40).
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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

1. Purpose
    Pursuant to CBOE Rule 2.40, on July 30, 1999, the Equity Floor 
Procedure Committee (``Committee'') approved the following fees for the 
option classes listed in the chart below. The Order Book Official 
Brokerage Rate (per contract) currently is $.00 for these option 
classes.\4\ The market-maker surcharge for brokerage is proposed to be 
raised as reflected below.
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    \4\ As the Order Book Official Brokerage Rate (per contract) for 
these classes is already $.00, additional funds generated by the 
surcharge will be paid to Stationary Floor Brokers as provided in 
Exchange Rule 2.40. Telephone conversation between Timothy Thompson, 
Director, Regulatory Affairs, Legal Department, CBOE, and Kenneth 
Rosen, Attorney, and Matthew Boesch, Paralegal, Division of Market 
Regulation, Commission, on August 16, 1999.

------------------------------------------------------------------------
                                                           Market-Maker
                      Option class                           surcharge
                                                          (per contract)
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Friede Goldman International, Inc. (FGI)................           $0.15
Northwest Airlines Corporation (NAQ)....................            0.14
Open Market, Inc. (OQM).................................            0.17
Orbital Sciences Corporation (ORB)......................            0.11
ONSALE, Inc. (QOL)......................................            0.12
Synovous Financial Corporation (SNV)....................            0.12
Zebra Technologies Corporation (ZBQ)....................            0.15
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    These fees will be effective as of August 2, 1999. All of the fees 
will remain in effect until such time as the Committee or the Board 
determines to change these fees and files the appropriate rule change 
with the Commission.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b)(4) \5\ of the Act because it is designed to provide for 
the equitable allocation of reasonable dues, fees, and other charges 
among its members.
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    \5\ 15 U.S.C. 78f(b)(4).
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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 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

    Written comments on the proposed rule change were neither solicited 
nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    The foregoing rule change establishes or changes a due, fee, or 
other charge imposed by the Exchange and, therefore, has become 
effective pursuant to section 19(b)(3)(A)(ii) \6\ of the Act and 
subparagraph (f)(2) of Rule 19b-4 thereunder.\7\ 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.\8\
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    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 17 CFR 240.19b-4(f)(2).
    \8\ In reviewing this proposal, the Commission has considered 
the proposal's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
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IV. Solicitation Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. 
Copies of the submission, all subsequent

[[Page 46466]]

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 Room. Copies of such filing also will be available for 
inspection and copying at the principal office of the CBOE. All 
submissions should refer to File No. SR-CBOE-99-42 and should be 
submitted by September 15, 1999.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-21979 Filed 8-24-99; 8:45 am]
BILLING CODE 8010-01-M