Self-Regulatory Organizations; Filing of Proposed Rule Change by the Chicago Board Options Exchange, Inc. Relating to the Maintenance by Members of Certain Written Policies and Procedures

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-33425; File No. SR-CBOE-93-58]

Self-Regulatory Organizations; Filing of Proposed Rule Change by

the Chicago Board Options Exchange, Inc. Relating to the Maintenance by

Members of Certain Written Policies and Procedures

Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934

(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on December

20, 1993, the Chicago Board Options Exchange, Inc. (``CBOE'' or

``Exchange'') filed with the Securities and Exchange Commission

(``SEC'' or ``Commission'') the proposed rule change as described in

Items I, II, and III below, which Items have been prepared by the CBOE.

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 amend Rule 4.18 to provide that a member who

is a lessor of a membership and who performs no other function in

respect of the membership is not subject to the requirements of Rule

4.18 concerning the establishment, maintenance, and enforcement of

written policies and procedures respecting misuse of non-public

information. The text of the proposed rule change is available at the

Office of the Secretary, 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 the 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 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 the

Statutory Basis for, the Proposed Rule Change

The purpose of the proposal is to amend Rule 4.18 to provide that a

member who is a lessor of a membership and who performs no other

function in respect of the membership is not subject to the

requirements of Rule 4.18 concerning the establishment, maintenance,

and enforcement of written policies and procedures respecting misuse of

non-public information.

In its current form, Rule 4.18 requires all members to maintain and

enforce written policies and procedures concerning non-public

information. Lessor members who have no other activities, however, do

not conduct any securities business in respect of their membership,

and, according to the Exchange, are not required to register as broker-

dealers under section 15 of the Securities Exchange Act of 1934. Under

these circumstances, the Exchange believes there is no reason to

subject these members to the written policy and procedure requirements

of Rule 4.18, which by their terms are meaningful only to an ongoing

securities business. Accordingly, Rule 4.18 is proposed to be amended

to clarify that members who perform no function in respect of their

membership except as lessors do not have to establish, maintain or

enforce written policies and procedures precluding misuse of non-public

information.

The CBOE believes that the proposed rule change is consistent with

section 6(b) of the Act in general and furthers the objectives of

section 6(b)(5) of the Act in particular in that it is designed to

promote just and equitable principles of trade and to protect the

public interest by eliminating unnecessary costs and burdens without

impairing CBOE's capacity to meet the requirements of the Act.

(B) Self-Regulatory Organization's Statement on Burden on Competition

The CBOE does not believe that the proposed rule change will impose

a burden on competition.

(C) Self-Regulatory Organization's Statement on Comments on the

Proposed Rule Change Received From Members, Participants or Others

No written comments were solicited or received with respect to the

proposed rule change.

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

that 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. Persons making written submissions

should file six copies thereof with the Secretary, Securities and

Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.

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 Section, 450 Fifth Street, NW.,

Washington, DC. Copies of such filing will also be available for

inspection and copying at the principal office of the CBOE. All

submissions should refer to File No. SR-CBOE-93-58 and should be

submitted by February 1, 1994.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.\1\

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\1\17 CFR 200.30-3(a)(12) (1993).

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Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-561 Filed 1-10-94; 8:45 am]

BILLING CODE 8010-01-M