[Federal Register Volume 59, Number 165 (Friday, August 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-21008]


[[Page Unknown]]

[Federal Register: August 26, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34555; File No. SR-CSE-94-01]
August 19, 1994.

 

Self-Regulatory Organizations; Notice of Filing of Amendment No. 
1 to Proposed Rule Change by Cincinnati Stock Exchange, Inc. Relating 
to the Exchange's Quality of Markets Policy

    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 August 
1, 1994, the Cincinnati Stock Exchange, Inc. (``CSE'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') 
Amendment No. 1 to the proposed rule change as described in Items I, II 
and III below, which Items have been prepared by the self-regulatory 
organization. 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 CSE hereby proposes to amend its prior filing regarding the 
CSE's policy governing Quality of Markets. The following is the text of 
the proposed rule change, with italics representing new language to be 
added and brackets representing deleted language:
D. Non-Preferencing Designated Dealers
(a) ITS Inbound Activity
    [The percentage of a non-preferencing member firm's total monthly 
CSE trade activity which consists of ITS inbound executions shall equal 
at least 5%]
    The percentage of a non-preferencing member firm's total monthly 
CSE trade activity which consists of ITS inbound executions shall equal 
or exceed the average percentage achieved by preferencing Designated 
Dealers that manually enter quotations. If there exist no preferencing 
Dealers on CSE that are manually entering quotations, then the 
percentage of a non-preferencing member firm's total monthly CSE trade 
activity which consists of ITS inbound executions shall equal at least 
5%. For the purpose of comparing ITS inbound activity, a rolling three-
month average will be used to derive the percentage for the DDs 
entering manual quotations and these will be compared to the next 
month's percentages achieved by those member firms using computer-
generated quotations.

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 self-regulatory organization 
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 self-regulatory organization 
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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On February 25, 1994, the CSE filed proposed changes to its quality 
of markets policy.\1\ The proposal calls for the elimination of 
autoquoting and the adoption of objective standards to ensure that CSE 
specialists are contributing to the national market system. In response 
to comments on the filing, the Exchange proposes to amend one component 
of its new policy, the Intermarket Trading System (``ITS'') inbound 
execution requirement. Specifically, the requirement, as amended, would 
require that all Designated Dealers who computer-generate their 
quotations, whether or not they preference order flow, generate the 
same percentage of ITS inbound activity as preferencing Designated 
Dealers who manually generate quotes. The Exchange believes that such 
an approach would more fairly allocate the burden of improved 
performance across all of its specialists.
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    \1\The rule change was published for public comment in 
Securities Exchange Act Release No. 33849 (April 1, 1994), 59 FR 
16870 (April 8, 1994).
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the Act 
in general and furthers the objectives of Section 6(b)(5) in particular 
in that it is intended to promote just and equitable principles of 
trade.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The CSE does not believe that the proposed rule change will impose 
any inappropriate 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 either solicited or received with respect 
to Amendment No. 1 to the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Within 35 days of the publication of this notice in the Federal 
Register or within such other 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 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve the 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 size copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 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. Sec. 552, will be available for inspection and copying at 
the Commission's Public Reference Section, 450 Fifth Street, N.W., 
Washington, D.C. 20549. Copies of such filing will also be available 
for inspection and copying at the principal office of the CSE. All 
submissions should refer to File No. SR-CSE-94-01 and should be 
submitted by September 16, 1994.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-21008 Filed 8-25-94; 8:45 am]
BILLING CODE 8010-01-M