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Notice

Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Chicago Board Options Exchange Relating to Refunds of Unspent Marketing Fee Account Balances

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Start Preamble April 3, 2002.

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 22, 2002, the Chicago Board Options Exchange, Inc. (“CBOE”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which the CBOE has prepared. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

The CBOE proposes to change its fee schedule to permit Designated Primary Market Makers (“DPMs”) who have collected marketing fees pursuant to the CBOE's fee schedule to refund the unspent balance of the fees back to the market makers who paid them. The text of the proposed rule change is available at the 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 had 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

In July 2000 the CBOE imposed a $0.40 per contract marketing fee to collect funds to be used by the appropriate DPM to attract order flow to the CBOE.[3] In July 2001, the CBOE suspended the assessment of the marketing fee but reserved the right to reinstate the assessment of the fee by filing a proposed rule change with the Commission at a future date.[4]

Since July 2001, the DPMs have not spent all of the funds that have been collected. Some DPMs have asked the CBOE for permission to refund the unspent funds to the market makers who paid the fees. The CBOE proposes to give DPMs the right—though not the obligation—to refund the unspent funds, on a pro rata basis, to the market makers who contributed the funds. The CBOE and its clearing members would facilitate the refunds by issuing appropriate debits and credits to the applicable accounts of DPMs and market makers.

The CBOE believes that the proposed rule change is consistent with Section 6(b) of the Act [5] and furthers the objectives of Section 6(b)(4) of the Act [6] in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members.

B. Self-Regulatory Organization's Statement on Burden on Competition

The 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 CBOE neither solicited nor received any written comments with respect to the proposed rule change.

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

Because the proposed rule change establishes or changes a due, fee, or other charge that the CBOE has imposed, it has become effective upon filing pursuant to Section 19(b)(3)(A) of the Act [7] and Rule 19b-4(f)(2) thereunder.[8] At any time within 60 days after the filing of the proposed rule change, the Commission may summarily abrogate the 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.

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 the filing will also be available for inspection and copying at the principal office of the CBOE. All submissions should refer to SR-CBOE-2002-14 and should be submitted by May 1, 2002.

Start Signature
Start Printed Page 17478

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[9]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  See Exchange Act Release No. 43112 (Aug. 3, 2000), 65 FR 49040 (Aug. 10, 2000) (SR-CBOE-00-28).

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4.  See Exchange Act Release No. 44717 (Aug. 16, 2001), 66 FR 44655 (Aug. 24, 2001) (SR-CBOE-2001-43).

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[FR Doc. 02-8604 Filed 4-9-02; 8:45 am]

BILLING CODE 8010-01-P