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Notice

Self Regulatory Organizations; Chicago Board Options Exchange, Inc.; Order Granting Approval to Proposed Rule Change Amending Rules Regarding Jurisdiction Over Former Members and Associated Persons for Failure To Honor an Exchange Arbitration Award

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Information about this document as published in the Federal Register.

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This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble August 23, 2001.

On March 27, 2001, the Chicago Board Options Exchange, Inc. (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) [1] and Rule 19b-4 thereunder,[2] a proposed rule change to make amendments to its disciplinary and arbitration rules to extend the CBOE's disciplinary jurisdiction to cover former members and associated persons subject to CBOE arbitration awards. In particular, the proposed rule change provides that the failure to honor a CBOE arbitration award by a former CBOE member or associated person would subject former member or associated person to the disciplinary jurisdiction of the Exchange regardless of the date of termination of membership.

The proposed rule change was published for comment in the Federal Register on June 18, 2001.[3] The Commission received no comments on the proposal.

The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange [4] and, in particular, the requirements of Section 6 of the Act [5] and the rules and regulations thereunder. The Commission finds specifically that the proposed rule change is consistent with Sections 6(b)(1) and Section 6(b)(6) of the Act,[6] respectively, in that the proposed rule change satisfies the requirement that: (1) An exchange is so organized and has the capacity to be able to carry out the purposes of Section 6 of the Act and to enforce compliance by its members and persons associated with its members with the provisions of Section 6 of the Act, the rules and regulations thereunder, and the rules of the exchange; and (2) the rules of an exchange provide that its members and persons associated with its members shall be appropriately disciplined for violation of the Act, the rules and regulations thereunder, or the rules of the exchange.

It Is Therefore Ordered, pursuant to Section 19(b)(2) of the Act,[7] that the proposed rule change (File No. SR-CBOE-2001-04) be, and it hereby is, approved.

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[8]

End Preamble

Footnotes

3.  See Securities Exchange Act Release No. 44408 (June 11, 2001), 66 FR 32853.

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4.  In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).

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6.  15 U.S.C. 78f(b)(1); (b)(6).

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[FR Doc. 01-21793 Filed 8-28-01; 8:45 am]

BILLING CODE 8010-01-M