[Federal Register: November 18, 1999 (Volume 64, Number 222)] [Notices] [Page 63064-63065] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr18no99-83] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-42126; File No. SR-Amex-99-40; SR-PCX-99-41; SR-CBOE- 99-59] Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the American Stock Exchange LLC; Pacific Exchange, Inc.; and Chicago Board Options Exchange, Inc. Relating to Permanent Approval of the Elimination of Position and Exercise Limits for Flex Equity Options November 10, 1999. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Exchange Act'' or ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on October 5, 1999, October 13, 1999, and November 4, 1999, the American Stock Exchange LLC (``Amex''), Pacific Exchange, Inc. (``PCX'') and the Chicago Board Options Exchange, Inc. (``CBOE'') (collectively, the ``Exchanges'') 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 self-regulatory organization. The PCX filed an amendment to the proposed rule change on October 28, 1999.\3\ The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\See Letter to Richard Strasser, Commission, from Robert Pacileo, PCX, dated October 27, 1999 (``PCX Amendment No. 1''). PCX Amendment No. 1 clarifies that the rule filing is being filed pursuant to Section 19(b)(4) of the Exchange Act, not Section 19(b)(3). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchanges propose to make permanent their pilot programs to eliminate position and exercise limits for FLEX Equity options. 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 self-regulatory organizations 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 self-regulatory organizations have 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 The purpose of the proposed rule filings is to approve permanently the Exchanges' pilot programs allowing for the elimination of position and exercise limits for FLEX Equity options. On September 9, 1997, the Commission approved separate proposals by the Exchanges to eliminate position and exercise limits for FLEX Equity options under a 2-year pilot program.\4\ On September 9, 1999, the Commission approved an extension of the pilot programs for another 3 months.\5\ --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 39032 (September 9, 1997), 62 FR 48683 (September 16, 1997) (approving SR-CBOE-96-79, SR-Amex-96-19, and SR-PXC-97-09) (``Approval Order''). \5\ See Securities Exchange Act Release No. 41848 (September 9, 1999), 62 FR 50846 (September 20, 1999). --------------------------------------------------------------------------- The Approval Order required the Exchanges to report to the Commission on the status of the programs so that the Commission could use this information to evaluate the consequences of the programs and to determine whether to approve the elimination of position and exercise limits for these products on a [[Page 63065]] permanent basis. All of the Exchanges have submitted the requisite reports.\6\ The Exchanges believe that their experiences with the pilot programs have been positive and therefore, request that the elimination of position and exercise limits for FLEX Equity options be approved on a permanent basis. --------------------------------------------------------------------------- \6\ Amex, PCX and CBOE submitted their reports on May 28, 1999, September 30, 1999, and June 2, 1999, respectively. --------------------------------------------------------------------------- 2. Basis The Exchanges believe that the proposal is consistent with Section 6(b) \7\ of the Act, in general, and Section 6(b)(5) \8\ of the Act, in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78f(b). \8\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement of 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 Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve such proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of 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 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, located at the above address. Copies of such filing will also be available for inspection and copying at the principal office of the self-regulatory organization. All submissions should refer to File No. SR-Amex-99-40; SR-PCX-99-41; and SR-CBOE-99-59 and should be submitted by December 9, 1999. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\9\ --------------------------------------------------------------------------- \9\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Margaret H. McFarland. Deputy Secretary. [FR Doc. 99-30090 Filed 11-17-99; 8:45 am] BILLING CODE 8010-01-M