[Federal Register Volume 67, Number 220 (Thursday, November 14, 2002)]
[Notices]
[Pages 69059-69063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-28896]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-46787; File No. SR-OC-2002-01]
Self-Regulatory Organizations; Order Approving Proposed Rule
Change and Amendment Nos. 1 and 2 Thereto, and Notice of Filing and
Order Granting Accelerated Approval of Amendment No. 3 Thereto, by
OneChicago, LLC Relating to Customer Margin Requirements for Security
Futures
November 7, 2002.
On August 30, 2002, OneChicago, LLC (``OneChicago'' or
``Exchange'') submitted to 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 relating to customer margin
requirements for security futures. On September 25, 2002, OneChicago
submitted Amendment No. 1 to the proposed rule change.\3\ On September
25, 2002, OneChicago submitted Amendment No. 2 to the proposed rule
change.\4\ The proposed rule change was
[[Page 69060]]
published for comment in the Federal Register on October 1, 2002.\5\
The Commission received nine comment letters from ten commenters on the
proposed rule change.\6\ On November 7, 2002, OneChicago submitted
Amendment No. 3 to the proposed rule change.\7\ In addition, OneChicago
submitted a letter in response to the commenters.\8\ This order
approves the proposed rule change and Amendment Nos. 1 and 2 thereto,
accelerates approval of Amendment No. 3, and solicits comments from
interested persons on Amendment No. 3.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See letter from Kieran P. Hennigan, Sullivan & Cromwell, to
Assistant Director for Security Futures Products, Division of Market
Regulation (``Division''), Commission, dated September 24, 2002,
(``Amendment No. 1'').
\4\ See letter from Frank Ochsenfeld, Sullivan & Cromwell,
attention to T.R. Lazo, Senior Special Counsel, Division,
Commission, dated September 24, 2002, (``Amendment No. 2'').
\5\ Securities Exchange Act Release No. 46555 (September 26,
2002), 67 FR 61707.
\6\ See letters to Jonathan Katz, Secretary, Commission, from:
Philip D. DeFeo, Chairman and Chief Executive Officer, Pacific Stock
Exchange, dated October 15, 2002 (``PCX Letter''); Marc Menchel,
Senior Vice President and General Counsel, National Association of
Securities Dealers, dated October 23, 2002 (``NASD Letter'');
Richard Ketchum, Deputy Vice Chairman and President, The Nasdaq
Stock Market, Inc., dated October 23, 2002 (``Nasdaq Letter'');
Michael J. Simon, Senior Vice President and Secretary, International
Securities Exchange, Inc., dated October 22, 2002 (``ISE Letter'');
Michael J. Ryan, Jr., Executive Vice President and General Counsel,
American Stock Exchange, Inc., dated October 22, 2002 (``Amex
Letter''); John P. Davidson, Managing Director, Morgan Stanley & Co.
Inc., and Mitchell J. Lieberman, Managing Director, Goldman, Sachs &
Co., dated October 23, 2002 (``Morgan/Goldman Letter''); Kathleen M.
Hamm, Senior Vice President, Nasdaq Liffe Markets, LLC, dated
October 22, 2002 (``NQLX Letter''); Darla C. Stuckey, Corporate
Secretary, New York Stock Exchange, Inc., dated October 24, 2002
(``NYSE Letter''); and Michael R. Schaefer, Managing Director,
Salomon Smith Barney, dated October 25, 2002 (``SSB Letter'').
\7\ See letter from Frank Ochsenfeld, Sullivan & Cromwell,
attention to T.R. Lazo, Senior Special Counsel, Division,
Commission, dated November 7, 2002, (``Amendment No. 3''). In
Amendment No. 3, OneChicago modified certain aspects of its
exclusion for market making activity.
\8\ Letter from C. Robert Paul, General Counsel, OneChicago, to
Jonathan G. Katz, Secretary, Commission, dated November 7, 2002
(``OneChicago Letter'').
---------------------------------------------------------------------------
I. Description of the Proposed Rule Change
Introduction
On August 1, 2002, the Commodity Futures Trading Commission
(``CFTC'') and SEC (collectively, the ``Commissions'') jointly adopted
customer margin requirements for security futures.\9\ Under the
Commissions' ``account specific'' approach, the Commissions' margin
rules apply certain core requirements to all security futures, and
direct that the more specific requirements depend on the type of
account in which the security futures are held (i.e., a futures account
or securities account).
---------------------------------------------------------------------------
\9\ Securities Exchange Act Release No. 46292, 67 FR 53146
(August 14, 2002).
---------------------------------------------------------------------------
Proposal
The proposed rule change sets forth margin requirements for
security futures traded on OneChicago that are held in futures
accounts.\10\ Specifically, the proposed rule change sets the minimum
initial and maintenance customer margin rates for such security futures
and provides for lower margin levels for permitted strategy-based
offset positions. The proposed rules exclude certain financial
relations to which the Commissions' margin rules do not apply. The
proposed rule change also establishes standards under which members may
qualify as Security Futures Dealers and therefore be excluded from
OneChicago's margin rules.
---------------------------------------------------------------------------
\10\ The proposed rule change limits the scope of OneChicago's
customer margin rules to positions in futures accounts, except with
respect to the exclusion for market making activity (which is
discussed below) where the proposed rule change provides that the
rules apply to positions in both futures accounts and securities
accounts. However, the Commission notes that OneChicago's market
maker exclusion will apply to a member's positions in securities
accounts only to the extent recognized by the rules of the member's
designated examining authority.
---------------------------------------------------------------------------
Margin Levels
The Commissions' margin rules require that customers deposit in
their accounts minimum margin of 20 percent of the current market value
of security futures.\11\ In addition, the Commissions' rules permit
national securities exchanges to set margin levels below 20 percent of
the current market value of security futures for certain offsetting
positions in security futures and other securities or futures. The
proposed rule change establishes a minimum margin rate of 20 percent
for both long and short positions in security futures, except with
respect to specified, permitted offsetting positions. Under the
proposed rule change, OneChicago permits reduced margin levels for
eighteen specific offsetting positions.\12\
---------------------------------------------------------------------------
\11\ Rule 403(b)(1) under the Act and Rule 41.45(b)(1) under the
Commodity Exchange Act (``CEA'') 17 CFR 240.403(b)(1) and 17 CFR
41.45(b)(1).
\12\ In its release adopting the customer margin rules for
security futures, the Commissions' published a table of eighteen
offsetting positions and corresponding margin levels that are
consistent with comparable offsets permitted for positions involving
exchange-traded options. The proposed rule change includes all of
the offsetting positions that the Commissions included in their
table. However, OneChicago's customer margin rules will only apply
to positions held in futures accounts. Because any offset that
includes a security (other than a security future) must be carried
in a securities account, OneChicago's rule applies only to those
offsetting positions that may be carried in a futures account (i.e.,
offsets that do not include securities other than security futures).
---------------------------------------------------------------------------
Security Futures Dealers
As noted above, the proposed rule change provides an exclusion from
OneChicago's margin rules for market makers. Under the proposed rule
change, OneChicago's market maker exclusion provides that in order to
qualify for the exclusion from the margin rules, a person must (1) be a
OneChicago member that is registered with the Exchange as a dealer in
security futures; (2) be registered as a floor trader or a floor broker
with the CFTC under Section 4f(a)(1) of the CEA or as a dealer with the
Commission under Section 15(b) of the Act; (3) maintain records
sufficient to prove compliance with the requirements of OneChicago Rule
515(n) and Rule 41.42(c)(2)(v) under the CEA and Rule 400(c)(2)(v)
under the Act, as applicable, ``including without limitation trading
account statements and other financial records sufficient to detail
activity;''\13\ and (4) hold itself out as being willing to buy and
sell security futures for its own account on a regular or continuous
basis. In addition, the market maker exclusion provides that any market
maker that fails to comply with the Rules of the Exchange or the margin
rules adopted by the Commission and the CFTC shall be subject to
disciplinary action in accordance with Chapter 7 of OneChicago's rules,
and that appropriate sanctions in the case of any such failure shall
include, without limitation, a revocation of such market maker's
registration as a dealer in security futures.
---------------------------------------------------------------------------
\13\ OneChicago added the quoted language to this requirement of
the market maker exclusion in Amendment No. 3.
---------------------------------------------------------------------------
As originally submitted, the market maker exclusion further
provided that a market maker would be considered to be holding itself
out as being willing to buy and sell security futures for its own
account on a regular or continuous basis if either (1) at least 75% of
its gross revenue on an annual basis is derived from business
activities or occupations from trading listed financial derivatives and
the instruments underlying those derivatives, including security
futures, stock index futures and options, stock and index options,
stocks, foreign currency futures and options, foreign currencies,
interest rate futures and options, fixed income instruments and
commodity futures and options; or (2) except for unusual circumstances,
at least fifty percent (50%) of its trading activity on OneChicago in
any calendar quarter is in classes of security futures
[[Page 69061]]
products to which it is assigned under a market making program adopted
by OneChicago pursuant to Rule 514.
In Amendment No. 3, OneChicago amended this aspect of its proposed
rule change. As amended, the market maker exclusion now provides three
alternative ways for a member to satisfy the requirement that a
security futures dealer hold itself out as being willing to buy and
sell security futures for its own account on a regular or continuous
basis. Under the first alternative, the market maker must (1) provide
continuous two-sided quotations throughout the trading day for all
delivery months of security futures representing a meaningful
proportion of the total trading volume on the Exchange,\14\ subject to
relaxation during unusual market conditions as determined by OneChicago
(such as a fast market in either a security future an underlying
security) at which times the market maker must use its best efforts to
quote continuously and competitively; and (2) when providing
quotations, quote with a maximum bid/ask spread of no more than the
greater of $0.20 or 150% of the bid/ask spread in the primary market
for the security underlying each security future.
---------------------------------------------------------------------------
\14\ Beginning on the 181st calendar day after the commencement
of trading on the Exchange, a ``meaningful proportion of the total
trading volume on the Exchange from time to time'' shall mean a
minimum of 20% of such trading volume.
---------------------------------------------------------------------------
Under the second alternative, the market maker must (1) respond to
at least 75% of the requests for quotation for all delivery months of
security futures representing a meaningful proportion of the total
trading volume on the Exchange \15\, subject to relaxation during
unusual market conditions as determined by the OneChicago (such as a
fast market in either a security future or an underlying security) at
which times such Market Maker must use its best efforts to quote
competitively; and (2) when responding to requests for quotation, quote
within five seconds with a maximum bid/ask spread of no more than the
greater of $0.20 or 150% of the bid/ask spread in the primary market
for the security underlying each security future.
---------------------------------------------------------------------------
\15\ Beginning on the 181st calendar day after the commencement
of trading on the Exchange, a ``meaningful proportion of the total
trading volume on the Exchange from time to time'' shall mean a
minimum of 20% of such trading volume.
---------------------------------------------------------------------------
Under the third alternative, the market maker is assigned to a
group of security futures that is either unlimited in nature
(``Unlimited Assignment'') or is assigned to no more than 20% of the
security futures listed on the Exchange (``Limited Assignment''). In
addition, this alternative provides that: (a) At least 75% of the
market maker's total trading activity in OneChicago products is in its
assigned security futures, measured on a quarterly basis; (b) during at
least 50% of the trading day the market maker has bids or offers in the
market that are at or near the best market, except in unusual market
conditions (such as a fast market in either a security future or an
underlying security), with respect to at least 25% (in the case of an
Unlimited Assignment) or at least one (in the case of a Limited
Assignment) of its assigned security futures; and (c) the first two
requirements are satisfied on at least 90% (in the case of an Unlimited
Assignment) or 80% (in the case of a Limited Assignment) of the trading
days in each calendar quarter.
II. Summary of Comments
As noted above, the Commission received nine comment letters from
ten commenters on the proposed rule change,\16\ and OneChicago
submitted a letter in response to the comments.\17\
---------------------------------------------------------------------------
\16\ PCX Letter, NASD Letter, Nasdaq Letter, ISE Letter, Amex
Letter, Morgan/Goldman Letter, NQLX Letter, NYSE Letter, and SSB
Letter. See supra note 6. The SSB Letter stated that it agreed
generally with the comments expressed in the Morgan/Goldman Letter.
\17\ OneChicago Letter, supra note 8.
---------------------------------------------------------------------------
Market Maker Exclusion
All of the comments expressed concern with OneChicago's proposed
market maker exclusion. In particular, the commenters objected to the
provision that would allow OneChicago members to qualify for the market
maker exclusion based on the amount of revenue they derive from trading
listed financial derivatives and underlying instruments. Six comments
expressed the view that this test was inconsistent with the guidelines
provided by the Commission and the CFTC,\18\ and six comments
maintained that the proposed revenue requirement was not consistent
with the margin requirements for comparable exchange-traded options and
therefore did not satisfy the requirements of section 7(c)(2) of the
Act.\19\ Commenters argued that the revenue test would allow OneChicago
members to qualify for the market maker exclusion without actually
providing liquidity to the market for security futures.\20\ Other
commenters contended that the revenue test would increase systemic risk
in the marketplace for security futures, and therefore did not satisfy
section 7(c)(2) of the Act, by allowing an excessively high number of
market professionals to trade security futures with reduced margin
requirements.\21\
---------------------------------------------------------------------------
\18\ NASD Letter, Morgan/Goldman Letter, NQLX Letter, NYSE
Letter, Nasdaq Letter, SSB Letter, and Amex Letter.
\19\ PCX Letter, NASD Letter, ISE Letter, Amex Letter, Morgan/
Goldman Letter, and SSB Letter.
\20\ PCX Letter, ISE Letter, and NQLX Letter, Morgan/Goldman
Letter.
\21\ Morgan/Goldman Letter, NASD Letter, SSB Letter.
---------------------------------------------------------------------------
Three comments also expressed concern with the provision that would
allow a OneChicago member to qualify for the market maker exclusion if
at least 50% of its trading activity per quarter was in contracts to
which it is assigned pursuant to a market making program adopted by
OneChicago.\22\ Those comments generally expressed the belief that the
requirement was too vague and asked the Commission not to approve it
until OneChicago had explained the nature of its market making program
more fully.
---------------------------------------------------------------------------
\22\ PCX Letter, Amex Letter, and NQLX Letter.
---------------------------------------------------------------------------
In response to the commenters' concerns, OneChicago modified the
tests that a member must satisfy to qualify for the market maker
exclusion by eliminating the test based on revenue and revising the
test based on trading activity. OneChicago stated that it believes that
its revised test is consistent with the rules of the options exchanges.
In addition, OneChicago noted that it requested approval of the revised
tests on a six-month pilot basis and stated that it intends to use this
pilot program to monitor carefully the operation and affect of the
revised tests. OneChicago, in response to commenters' concerns. The
Commission believes that Amendment No. 3 addresses the commenters'
concerns by modifying the requirements of the market maker exclusion,
particularly by eliminating the revenue test, and notes that any
changes or additions to OneChicago's current market making program
would be filed with the Commission for approval under section 19(b)(2)
of the Act.
In addition, two comments expressed the view that OneChicago's
proposed market maker exclusion would encourage imprudent risk taking,
speculation, and leverage because there would be no net capital
requirements imposed either on a floor broker that qualifies for the
market maker exclusion or on its carrying broker-dealer or FCM.\23\ The
commenters' concern is that the regulatory capital requirements for
certain security futures market participants is inadequate. Moreover,
those commenters expressed concern that in the event of a bankruptcy of
a carrying firm, a bankruptcy receiver or
[[Page 69062]]
trustee would pay out to the floor broker a pro rata share of the
available pool of assets on the same terms as customers,
notwithstanding that the floor broker was not required to post customer
margin.
---------------------------------------------------------------------------
\23\ Morgan/Goldman Letter and SSB Letter.
---------------------------------------------------------------------------
In response, OneChicago stated that Rule 1.17 under the CEA and the
minimum financial requirements of the futures exchanges all require
that a futures commission merchant maintain adjusted net capital of at
least four percent of customer segregated funds (an amount which
includes required margin deposits as well as open trade equity) and to
deduct from net capital the amount of undermargined and deficit
customer and non-customer accounts. In addition, OneChicago stated that
a market maker is entitled to nothing more than its pro rata share of
customer property in a bankruptcy proceeding, and that if a market
maker had reduced margin requirements its share of the customer estate
would be correspondingly reduced.
The Commission believes that the determination of what amount of
capital is sufficient for a market participant is within the purview of
the participant's primary regulator and does not believe that it would
be appropriate to require OneChicago's margin rules to address these
concerns indirectly. In addition, the Commission believes that any
concerns regarding a market maker's share of a customer's estate in a
bankruptcy proceeding would be more properly addressed by changes to
the insolvency regime applicable to those market participants.
Finally, three commenters expressed concern with the fact that
certain aspects of OneChicago's margin rules would apply to positions
carried in securities accounts. One commenter objected to OneChicago's
proposal to adopt margin levels for offsetting positions that may only
be held in securities accounts even though its rules apply only to
positions in futures accounts because the proposal gave the impression
that those offsets were permitted to be carried in a futures
account.\24\ Two commenters also objected to the provisions in
OneChicago's rules asserting that, with respect to the exclusion for
market makers, OneChicago's margin rules would apply to positions in
both futures accounts and securities accounts.\25\ These comments
argued that this aspect of the proposed rule change would conflict with
current margin requirements governing securities accounts of broker-
dealers and would create confusion by subjecting those market makers to
the margin requirements of both OneChicago and their designated
examining authority.
---------------------------------------------------------------------------
\24\ NQLX Letter.
\25\ NASD Letter, Nasdaq Letter.
---------------------------------------------------------------------------
In response to these comments, OneChicago stated that it prefers to
retain the full range of permitted margin offsets, so that they can be
made effective if OneChicago later amends its margin rules to apply
them to securities accounts or if the Commission at some future date
takes steps that would permit these margin offsets to be carried in a
futures account. In addition, OneChicago stated its view that it should
be free to adopt its own rule and to apply that rule to its own
members. However, OneChicago also clarified that it was not suggesting
that OneChicago's margin rule supersedes that of any other self-
regulatory organization. Rather, OneChicago explained that there may be
broker-dealers that do not do a customer business that are members only
of OneChicago and that these broker-dealers should be able to claim the
advantages of market maker margin treatment without regard to whether
they carry their positions in a securities or a futures account.
The Commission reiterates that because any offset that includes a
security (other than a security future) must be carried in a securities
account, OneChicago's rule applies only to those offsetting positions
that may be carried in a futures account (i.e., offsets that do not
include securities other than security futures). In addition, the
Commission emphasizes that approval of the proposed rule change does
not affect the applicability of the rules of another self-regulatory
organization to its members. As a result, OneChicago's market maker
exclusion will apply to a member's positions in securities accounts
only to the extent recognized by the rules of the member's designated
examining authority.
III. Discussion
Under section 19(b)(2) of the Act, the Commission is directed to
approve the proposed rule change if it finds that it is consistent with
the requirements of the Act and the rules and the rules and regulations
thereunder applicable to a national securities exchange.\26\ Section
6(b)(5) of the Act \27\ requires, among other things, that the rules of
a national securities exchange be designed to promote just and
equitable principles of trade and, in general, to protect investors and
the public interest.\28\ In addition, section 7(c)(2)(B) of the Act
\29\ provides, among other things, that the margin rules for security
futures must preserve the financial integrity of markets trading
security futures, prevent systemic risk, and be consistent with the
margin requirements for comparable exchange-traded options. Section
7(c)(2)(B) also provides that the margin levels for security futures
may be no lower than the lowest level of margin, exclusive of premium,
required for any comparable exchange-traded option. For the reasons
discussed below, after careful review and consideration of the
commenters' views, the Commission finds that the rule change is
consistent with OneChicago's obligations under the Act and the rules
and regulations thereunder.
---------------------------------------------------------------------------
\26\ 15 U.S.C. 78s(b)(2).
\27\ 15 U.S.C. 78f(b)(5).
\28\ In approving this rule change, the Commission has
considered its impact on efficiency, competition, and capital
formation. 15 U.S.C. 78o-3(b)(9).
\29\ 15 U.S.C. 78g(c)(2)(B).
---------------------------------------------------------------------------
The Commission believes that the rule change is generally
consistent with the customer margin rules for security futures adopted
by the Commission and the CFTC. In particular, the Commission notes
that, consistent with Rule 403 under the Act, OneChicago's proposed
rule provides for a minimum margin level of 20% of current market value
for all positions in security futures. The Commission believes that 20%
is the minimum margin level necessary to satisfy the requirements of
section 7(c)(2)(B) of the Act. Rule 403 under the Act \30\ also
provides that a national securities exchange may set margin levels
lower than 20% of the current market value of the security future for
an offsetting position involving security futures and related
positions, provided that an exchange's margin levels for offsetting
positions meet the criteria set forth in section 7(c)(2)(B) of the Act.
The offsets proposed by OneChicago are consistent with the strategy-
based offsets permitted for comparable offset positions involving
exchange-traded options and therefore consistent with section
7(c)(2)(B) of the Act.
---------------------------------------------------------------------------
\30\ 17 CFR 240.403(b)(2).
---------------------------------------------------------------------------
Finally, the Commission believes that the standards for
OneChicago's market maker exclusion, as amended by Amendment No. 3, are
consistent with the Act, and Rule 400(c)(2)(v) thereunder.\31\
Specifically, the Commissions' margin rules do not apply to a member of
a national securities exchange that is registered with such exchange as
a ``security futures dealer'' pursuant to exchange rules that must meet
several criteria, including a requirement that a security futures
dealer be required ``to hold itself out as
[[Page 69063]]
being willing to buy and sell security futures for its own account on a
regular or continuous basis.'' The Commission believes that the
affirmative obligations required by OneChicago Rule 515(n) satisfy this
requirement.
---------------------------------------------------------------------------
\31\ 17 CFR 200.400(c)(2)(v).
---------------------------------------------------------------------------
IV. Accelerated Approval of Amendment No. 3
OneChicago has asked the Commission to approve Amendment No. 3 to
the proposed rule change prior to the thirtieth day after the date of
publication of notice of the filing to accommodate the timetable for
the trading of security futures. Amendment No. 3 modifies two aspects
of OneChicago's market maker exclusion. First, Amendment No. 3
clarifies the recordkeeping requirements that market makers must meet
in order to qualify for the exclusion. The amendments to the
recordkeeping requirement of the market maker exclusion clarify the
types of records that, consistent with Rule 400(c)(2)(v)(2) under the
Act, a market maker must keep in order to qualify for the exclusion for
security futures dealers from OneChicago's margin requirements.
Second, Amendment No. 3 modifies the trading obligations that
market maker must meet to qualify for the exclusion. The amendments to
the trading obligations are in response to the commenters' concerns,
and clarify the minimum trading requirements imposed on market makers
in order to satisfy the requirement of the exclusion that a market
maker hold itself out as being willing to buy and sell security futures
for its own account on a regular or continuous basis. OneChicago has
also requested that the Commission approve the amendments to the
trading obligations as a pilot program for six months beginning on the
date of this order.
The Commission finds good cause for approving the proposed rule
change, as amended, prior to the thirtieth day after the date of
publication of notice of filing thereof in the Federal Register. The
Commission believes that accelerated approval of the proposed rule
change should enable OneChicago to begin trading security futures from
the outset of security futures trading.\32\ In addition, the Commission
believes that granting accelerated approval to Amendment No. 3 thereto
should clarify obligations the obligations that OneChicago members must
meet in order to qualify for the market maker exclusion from the margin
requirements. In addition, the Commission notes that the modifications
to the trading obligations of the market maker exclusion set forth in
Amendment No. 3 will take effect as a temporary pilot to give members
of the public an opportunity to comment on the substance of that aspect
of Amendment No. 3 before OneChicago requests permanent approval.
Accordingly, the Commission believes that there is good cause,
consistent with Section 19(b) of the Act, to approve Amendment No. 3 to
the proposed rule change on an accelerated basis.
---------------------------------------------------------------------------
\32\ The Commission understands that trading in security futures
is scheduled to begin on November 8, 2002.
---------------------------------------------------------------------------
V. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether Amendment No. 3
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 Exchange. All
submissions should refer to File No. SR-OC-2002-01 and should be
submitted by December 5 2002.
VI. Conclusion
It is therefore ordered, pursuant to section 19(b)(2) of the
Act\33\, that the proposed rule change, as amended, (File No. SR-OC-
2002-01) be, and hereby is, approved, provided, however, that
OneChicago Rule 515(n)(ii)(C) is approved until May 7, 2003.
---------------------------------------------------------------------------
\33\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\34\
---------------------------------------------------------------------------
\34\ 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-28896 Filed 11-13-02; 8:45 am]
BILLING CODE 8010-01-P