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ADDRESSES: Send or deliver comments ADDRESSES: Send or deliver comments Budget, New Executive Office Building,
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Linda M. Springer,
Administrative Coordination Contact: Services Branch, (202) 606–0623.
Cyrus S. Benson, Team Leader, U.S. Office of Personnel Management.
Director.
Publications Team, RIS Support Linda M. Springer,
[FR Doc. 05–14112 Filed 7–18–05; 8:45 am] Services/Support Group, (202) 606–
BILLING CODE 6325–46–P Director.
0623.
[FR Doc. 05–14114 Filed 7–18–05; 8:45 am]
U.S. Office of Personnel Management.
BILLING CODE 6325–38–P
OFFICE OF PERSONNEL Linda M. Springer,
MANAGEMENT Director.
[FR Doc. 05–14113 Filed 7–18–05; 8:45 am] SECURITIES AND EXCHANGE
Proposed Collection; Comment BILLING CODE 6325–38–P COMMISSION
Request for Review of a Currently
Approved Information Collection: RI [Release No. 34–52011; File No. SR–CBOE–
38–107 OFFICE OF PERSONNEL 2004–63]
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41452 Federal Register / Vol. 70, No. 137 / Tuesday, July 19, 2005 / Notices
comment on Amendment No. 2 and class also would be P.M.-settled. managing their risk exposures and
approves the proposal, as amended, on Similarly, Short Term Option Series for carrying out their investment objectives.
an accelerated basis. a particular class would be physically The Commission also believes that the
settled or cash-settled in the same pilot program strikes a reasonable
II. Description of Proposed Rule
manner as the monthly option contract balance between the Exchange’s desire
CBOE proposes to amend its rules to in that class. The Exchange usually to offer a wider array of investment
establish a pilot program to list and would open five Short Term Option opportunities and the need to avoid
trade Short Term Option Series, which Series for each expiration date in that unnecessary proliferation of option
would expire one week after the date on class. The strike price of each Short series that could compromise options
which a series is opened. Under the Term Option Series would be fixed at a quotation capacity. The Commission
proposal, the Exchange could select up price per share, with at least two strike expects CBOE to monitor the trading
to five approved option classes 7 on prices above and two strike prices below and quotation volume associated with
which Short Term Option Series could the value of the underlying stock or the additional option series created
be opened. A series could be opened on calculated index value at about the time under the pilot program and the effect
any Friday that is a business day and that the Short Term Option Series is of these additional series on the
would expire at the close of business on opened. CBOE would not open a Short capacity of the Exchange’s, OPRA’s, and
the next Friday that is a business day. Term Option Series in the same week vendors’ systems.
If a Friday were not a business day, the that the corresponding monthly option The Commission received one
series could be opened (or would series is expiring, because the monthly comment letter on the proposed rule
expire) on the first business day option series in its last week before change.11 The commenter questioned
immediately prior to that Friday. expiration is functionally equivalent to the appropriateness of P.M. settlement
Under the pilot program, the the Short Term Option Series. The for Short Term Option Series on
Exchange also could list and trade Short interval between strike prices on Short indexes, given the Commission’s
Term Option Series on any option class Term Option Series would be the same historical concern that P.M.-settled
that is selected by another exchange that as with the corresponding monthly index options have the potential to
employs a similar pilot program. option series. CBOE would aggregate a increase volatility in the underlying
Limiting the number of such option Short Term Option Series with its equity market.
classes would ensure that the addition corresponding monthly option series for The Commission shares the
of new series through the pilot program purposes of the Exchange’s rules on commenter’s concern. In Amendment
would have only a negligible impact on position limits. No. 2, CBOE revised its proposal so that
the Exchange’s and the Options Price The Exchange represented that it has all Short Term Option Series will be
Reporting Authority’s (‘‘OPRA’’) quoting the system capacity to adequately settled in the same manner as the
capacity. Also, limiting the term of the handle the new option series corresponding monthly expiration series
pilot program to a period of one year contemplated by this proposal. The in the same class. Consequently, the
would allow the Exchange and the Exchange provided to the Commission majority of Short Term Option Series on
Commission to determine whether the information in a confidential indexes will be A.M.-settled, as are the
Short Term Option Series program submission to support that majority of regular index options. The
should be extended, expanded, and/or representation. Commission believes that this
made permanent. CBOE proposed that the pilot program amendment adequately addresses any
As originally proposed, all Short extend one year from the date of this concerns regarding settlement time.
Term Option Series would be P.M.- approval. Pursuant to Section 19(b)(2) of the
settled. However, in Amendment No. 2, Act,12 the Commission finds good cause
CBOE revised the proposal so that a III. Discussion
for approving the amended proposal
Short Term Option Series would be After careful review, the Commission prior to the thirtieth day after the
settled in the same manner as the finds that the proposal, as amended, is publication of Amendment No. 2 in the
monthly expiration series in the same consistent with the requirements of the Federal Register. Amendment No. 2
class. If the monthly option contract for Act and the rules and regulations proposes that Short Term Option Series
a particular class were A.M.-settled, as thereunder applicable to a national listed on currently approved option
most index options are,8 the Short Term securities exchange.9 In particular, the classes will settle in the same manner
Option Series for that class also would Commission believes that the proposal (i.e., with respect to A.M. or P.M.
be A.M.-settled; if the monthly option is consistent with the requirements of settlement and cash or physical
contract for a particular class were P.M.- Section 6(b)(5) of the Act,10 which settlement) as do their corresponding
settled, as most non-index options are, requires, among other things, that the monthly expiration series in the same
the Short Term Option Series for that rules of a national securities exchange option class. The Commission finds
be designed to remove impediments to good cause to accelerate approval of the
Series listed on currently approved option classes and perfect the mechanism of a free and amended proposal because CBOE’s
would settle in the same manner (i.e., with respect open market and a national market approach to settlement times for the
to A.M. or P.M. settlement and cash or physical system and, in general, to protect
settlement) as do the monthly expiration series in new Short Term Option Series is
the same option class. investors and the public interest. consistent with prior Commission
7 A Short Term Option Series could be opened in The Commission believes that listing
guidance regarding options settlement
any option class that satisfied the applicable listing and trading Short Term Option Series,
times generally.
criteria under CBOE rules (i.e., stock options, under the terms described in CBOE’s
options on exchange-traded funds as defined under proposal, will further the public interest IV. Solicitation of Comments
Interpretation and Policy .06 to CBOE Rule 5.3, or
options on indexes). by offering investors new means of Concerning Amendment No. 2
8 The Exchange notes, however, that certain
9 In approving this proposed rule change, the
Interested persons are invited to
monthly expiration index options—specifically,
American- and European-style options on the S&P Commission has considered the proposed rule’s
submit written data, views, and
100 Index (OEX and XEO, respectively)—are P.M.- impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f). 11 See Amex Letter, supra note 5.
settled. Therefore, the Short Term Option Series in
these index options would also be P.M.-settled. 10 15 U.S.C. 78f(b)(5). 12 15 U.S.C. 78s(b)(2).
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Federal Register / Vol. 70, No. 137 / Tuesday, July 19, 2005 / Notices 41453
arguments concerning Amendment No. CBOE–2004–63), as amended, is Chicago Board Options Exchange,
2, including whether it is consistent approved, and that Amendment No. 2 Incorporated Rules
with the Act. Comments may be thereto is approved on an accelerated * * * * *
submitted by any of the following basis, as a pilot program, through July
methods: 12, 2006. Rule 6.7. Exchange Liability
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