[Federal Register: April 1, 2003 (Volume 68, Number 62)]
[Notices]
[Page 15780-15781]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01ap03-99]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-47573; File No. SR-CBOE-2003-12]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Chicago Board Options
Exchange, Inc., Proposing To Extend the Rapid Opening System Pilot
Program
March 26, 2003.
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 March 20, 2003, 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 and
II below, which Items have been prepared by the Exchange. 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
CBOE proposes to extend the Rapid Opening System (``ROS'') pilot
program until September 30, 2003 or such time as the Commission has
approved ROS on a permanent basis.\3\ The text of the proposed rule
change appears below. New text is in italics. Deleted text is in
brackets.
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\3\ The request to permanently approve ROS is being considered
separately under SR-CBOE-2002-55.
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Rapid Opening System
Rule 6.2A
(a)-(c) No change.
(d) Pilot Program.
This Rule (and the sentences in Rule 6.2 and Rule 6.45 referring to
this Rule) will be in effect until [March 31, 2003] September 30, 2003
on a pilot basis.
* * * Interpretation and Policies:
.01-.02 Unchanged.
* * * * *
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 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 Exchange 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
On February 9, 1999, the Commission approved, on a pilot basis, the
implementation of ROS.\4\ ROS is a system developed by CBOE to open an
entire options class, all series, as a single event, based on a single
underlying value. The ROS pilot program is due to expire on March 31,
2003.\5\ The Exchange proposes to extend the ROS pilot until September
30, 2003 or such time as the Commission has approved ROS on a permanent
basis.
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\4\ See Securities Exchange Act Release No. 41033 (February 9,
1999), 64 FR 8156 (February 18, 1999) (approving SR-CBOE-98-48). ROS
is governed by CBOE Rule 6.2A.
\5\ The Commission has extended the ROS pilot program four
times. See Securities Exchange Act Release Nos. 42596 (March 30,
2000), 65 FR 18397 (April 7, 2000) (extending the pilot until
September 30, 2000); 43395 (September 29, 2000), 65 FR 60706
(October 12, 2000) (extending the pilot until September 30, 2001);
44891 (October 1, 2001), 66 FR 51483 (October 9, 2001) (extending
the pilot until September 30, 2002); and 46572 (September 30, 2002),
67 FR 62508 (October 7, 2002) (extending the pilot until March 31,
2003).
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The Exchange recently submitted a proposed rule filing to the
Commission proposing permanent approval of ROS as well as an extension
of the ROS pilot.\6\ CBOE proposes an extension of the ROS pilot so
that the pilot may continue to operate while the Commission considers
the Exchange's request for permanent approval.
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\6\ See SR-CBOE-2002-55.
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2. Statutory Basis
The CBOE believes that ROS has improved market efficiency for all
market participants by successfully facilitating expedited openings of
options classes on the Exchange during the pilot period. Therefore,
CBOE believes that the proposed rule change is consistent with section
6(b) of the Act,\7\ in general, and furthers the objectives of section
6(b)(5),\8\ in particular, in that it is designed to promote just and
equitable principles of trade and to protect investors and the public
interest.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
CBOE does not believe that the proposed rule change will impose any
burden on competition 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
The Exchange neither solicited nor received written comments with
respect to the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to section
19(b)(3)(A) of the Act \9\ and subparagraph (f)(6) of rule 19b-4\10\
thereunder because the Exchange has designated the proposed rule change
as one that does not: (i) Significantly affect the protection of
investors or the public interest; (ii) impose any significant burden on
competition; (iii) become operative for 30 days from the date on which
it was filed, or such shorter time as the Commission may designate; and
the Exchange has given the Commission written notice of its intention
to file the proposed rule change at least five business days prior to
filing, or such shorter time as designated by the Commission. At any
time within 60 days of the filing of such proposed rule change, the
Commission may summarily
[[Page 15781]]
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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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
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The Exchange has requested that the Commission waive the five-day
pre-filing notice requirement and accelerate the operative date of the
proposal to March 31, 2003 so that the ROS pilot program may continue
without interruption after it would have otherwise expired on March 31,
2003. For this reason, the Commission, consistent with the protection
of investors and the public interest, has determined to waive the five-
day pre-filing notice requirement and accelerate the operative date of
the proposal to March 31, 2003.\11\
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\11\ For purposes of accelerating the operative date of this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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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. Copies of such filing will also be
available for inspection and copying at the principal office of the
Exchange. All submissions should refer to File No. SR-CBOE-2003-12 and
should be submitted by April 22, 2003.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-7759 Filed 3-31-03; 8:45 am]
BILLING CODE 8010-01-P