67 FR 85 pgs. 22142-22143 - Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Chicago Board Options Exchange, Inc. Relating to Legal Proceedings Against the Exchange
Type: NOTICEVolume: 67Number: 85Pages: 22142 - 22143
Docket number: [Release No. 34-45837; File No. SR-CBOE-2002-20]
FR document: [FR Doc. 02-10870 Filed 5-1-02; 8:45 am]
Agency: Securities and Exchange Commission
Official PDF Version: PDF Version
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-45837; File No. SR-CBOE-2002-20]
Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Chicago Board Options Exchange, Inc. Relating to Legal Proceedings Against the Exchange
April 26, 2002.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 ("Act")1and Rule 19b-4 thereunder,2notice is hereby given that on April 23, 2002, 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, 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.
Footnotes:
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b-4.
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange proposes to amend CBOE Rule 6.7A to prohibit members from initiating certain types of legal proceedings against the Exchange or its contractors. The text of the proposed rule change is provided below. Text that has been added to the current Exchange rule is in italics.
Rule 6.7A Legal Proceedings Against the Exchange and its Directors, Officers, Employees, Contractors or Agents
No member or person associated with a member shall institute a lawsuit or other legal proceeding against the Exchange or any director, officer, employee, contractor, agent or other official of the Exchange or any subsidiary of the Exchange, for actions taken or 2 omitted to be taken in connection with the official business of the Exchange or any subsidiary, except to the extent such actions or omissions constitute violations of the federal securities laws for which a private right of action exists. This provision shall not apply to appeals of disciplinary actions or other actions by the Exchange as provided for in the Rules.
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 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
1. Purpose
Currently, CBOE Rule 6.7A prohibits a member or associated person from instituting a lawsuit or any other type of legal proceeding against any officer, director, employee, agent or other official of the Exchange or any of its subsidiaries based on action taken or omitted to be taken while such person is acting on Exchange business or the business of any of its subsidiaries. CBOE Rule 6.7A does not prevent a legal proceeding based on violation of the federal securities laws where a private right of action for such violation otherwise exists, nor does it prevent appeals of Exchange actions as provided for in the Rules of the Exchange.3
Footnotes:
3 The Commission approved CBOE Rule 6.7A on July 11, 1996. See Securities Exchange Act Release No. 37421, 61 FR 37513 (July 18, 1996).
The purpose of the proposed rule change is to amend CBOE Rule 6.7A to also prohibit a member or associated person from instituting a lawsuit or any other type of legal proceeding against the Exchange or its contractors. According to the CBOE, the proposed change to CBOE Rule 6.7A would not impair a member's ability to initiate legal action against the Exchange or its contractors based upon violations of the federal securities laws for which a private right of action exists, appeals of disciplinary actions, or other actions by the CBOE as provided for in the Exchange's rules. The Exchange believes that the proposed rule change would make CBOE Rule 6.7A consistent with the International Securities Exchange's Rule 705(c).
2. Statutory Basis
The CBOE believes that the proposed rule change is consistent with the provisions of Section 6(b) of the Act,4in general, and furthers the objectives of Section 6(b)(5) of the Act,5in particular, because by precluding certain types of legal actions by members against the Exchange and its contractors, it will further reduce the costs of the Exchange in responding to claims and lawsuits, thereby permitting the resources of the Exchange to be better utilized for promoting just and equitable principles of trade and protecting investors and the public interest.
Footnotes:
4 15 U.S.C. 78f(b).
5 15 U.S.C. 78f(b)(5).
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 that is not necessary or appropriate in furtherance of purposes of the Act.
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
The proposed rule change has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act6and Rule 19b-4(f)(6) thereunder,7because the proposed rule change (1) does not significantly affect the protection of investors or the public interest; (2) does not impose any significant burden on competition; and (3) does not become operative for 30 days from the date of filing, or such shorter time that the Commission may designate if consistent with the protection of investors and the public interest, and the Exchange provided the Commission with written notice of its intent to file the proposed rule change at least five business days prior to the filing date.
Footnotes:
6 15 U.S.C. 78s(b)(3)(A)(iii).
7 17 CFR 240.19b-4(f)(6).
At any time within 60 days of the filing of the proposed rule change, the Commission may summarily 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 the furtherance of the purposes of the Act.8
Footnotes:
8 15 U.S.C. 78s(b)(3)(C).
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 CBOE. All submissions should refer to File No. SR-CBOE-2002-20 and should be submitted by May 23, 2002.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.9
Footnotes:
9 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-10870 Filed 5-1-02; 8:45 am]
BILLING CODE 8010-01-P