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Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Accelerated Approval of Proposed Rule Change Relating to Amendments to Its Constitution and Rules Pertaining to the Governance of the Exchange

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Start Preamble October 24, 2002.

On August 26, 2002, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “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 amend CBOE's Constitution and Rules relating to governance of the Exchange. The principal governance proposal increases the public representation on the Exchange's Board of Directors (“Board”) and three committees of the Board so that the Board and these three committees will be balanced between industry (member) and public directors. The Exchange also proposed to codify in its Constitution establishment of the Audit Committee, Compensation Committee, and Floor Directors Committee of the Board. It also proposed to amend its Constitution to clarify that the authority of the Vice Chairman of the Board to coordinate the activities of Exchange committees does not extend to the Executive, Audit or Compensation Committees. Finally, the Start Printed Page 66187CBOE proposed certain “housekeeping” amendments to its Constitution and Rules.

The proposed rule change was published for comment in the Federal Register on October 2, 2002.[3] The Commission received no comments on the proposal. This order approves the proposed rule change on an accelerated basis.

The Commission finds that the proposed rule change is consistent with the Act and the rules and regulations under the Act 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 the requirement of Section 6(b)(5)[6] because it is designed to promote just and equitable principles of trade and to protect investors and the public interest by increasing public representation on the Exchange's Board and certain committees so that the Board and those committees will be balanced between industry (member) and public directors.

The Commission finds good cause for approving the proposed rule change prior to the thirtieth day after notice of publication in the Federal Register, in light of the absence of adverse comments on the proposed rule change. Acceleration of this approval will permit the CBOE to implement the changes without delay.

It is therefore ordered, pursuant to Section 19(b)(2) of the Act,[7] that the proposed rule change (SR-CBOE-2002-48) is approved.

Start Signature

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

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble


3.  See Securities Exchange Act Release No. 46546 (September 24, 2002), 67 FR 61934.

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

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[FR Doc. 02-27576 Filed 10-29-02; 8:45 am]