[Federal Register Volume 61, Number 34 (Tuesday, February 20, 1996)]
[Notices]
[Pages 6402-6404]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3668]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36828; File No. SR-CHX-96-04]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, 
Incorporated Relating to Maximum Monthly Transaction Fees and Other 
Processing Fees

February 12, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on January 25, 1996 the 
Chicago Stock Exchange, Incorporated (``CHX'' 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 self-regulatory organization. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.

    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Section (d) of, and add Section (r) 
to, its Membership Dues and Fees Schedule.

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
    The purpose of the proposed rule change is to add an alternative 
monthly cap on transaction fees for certain orders. These orders 
(except orders of specialists, orders in NASDAQ/NMS Securities,\2\ and 
orders of a floor broker acting in the capacity as a principal) \3\ 
will be charged a maximum monthly transaction fee based on $.45 per 100 
average monthly gross round lot shares.\4\ This alternative monthly cap 
on transaction fees is in addition to the current monthly cap on 
transaction fees of $45,000 per month for firms with a floor broker or 
market maker presence on the Floor and $65,000 per month for firms 
without a floor broker or market maker presence on the Floor.\5\ The 
filing also codifies the Exchange's current practice of rebilling 
members and member organizations the Exchange's cost in taking and 
processing fingerprints and conducting background checks.

    \2\ The Commission notes that the National Association of 
Securities Dealers, Inc. refers to such securities as ``Nasdaq 
National Market securities.'' In order to maintain consistency 
within its rules, however, the Exchange still utilizes the term 
``NASDAQ/NMS Securities.'' The Exchange intends to update this 
aspect of its rules at a later date. Telephone conversation between 
David T. Rusoff, Attorney, Foley & Lardner, and Anthony P. Pecora, 
Attorney, SEC (Jan. 16, 1996).
    \3\ These orders are subject to different rules concerning 
transaction fees. For example, Nasdaq National Market securities are 
not charged transaction fees, while transaction fees for specialists 
and floor brokers acting as principals are not subject to monthly 
caps. See CHX Fee Schedule Secs. (d)(4)-(6).
    \4\ For example, transaction fees for a 2,500 share limit order 
would be zero for the first 500 shares of the order and $0.0075 per 
share for the next 2,000 shares for a total transaction charge of 
$15.00 per side (2,000 shares multiplied by $0.0075), with an 
average round lot share charge of $0.60 per round lot ($15.00 
divided by 25 round lots. If, in a particular month, a firm's total 
business consisted solely of 1,000 limit orders for 2,500 shares, 
its transaction fees for that month normally would be $15,000.00, 
with an average round lot share charge of $0.60 per round lot. This 
proposal, however, would reduce the average round lot share charge 
to $0.45 per round lot and, in turn, reduce the firm's transaction 
fees for that month to $11,250.00.
    Although the CHX does not impose a transaction fee on market 
orders sent via the CHX's MAX system, the Commission notes that such 
orders are nonetheless included in calculating a firm's monthly 
average round lot share charge. Telephone conversation between David 
T. Rusoff, Attorney, Foley & Lardner, and Anthony P. Pecora, 
Attorney, SEC (Jan. 29, 1996).
    \5\ See CHX Fee Schedule Secs. (d)(3)(ii)-(iv).
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the Act 
\6\ in general and furthers the objectives of Section 6(b)(4) \7\ in 
particular in that it provides for the equitable allocation of 
reasonable dues, fees, and other charges among the Exchange's members 
and other persons using its facilities.

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes the proposed rule change does not impose any 
burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

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

    The foregoing rule change constitutes or changes a due, fee, or 
other charge imposed by the Exchange and, therefore, has become 
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and 
subparagraph (e) of Rule 19b-4 thereunder.\9\

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4.
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    At any time within sixty days of the filing of such 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 furtherance of the purposes of the Act.

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, 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 NW., 
Washington, D.C. 20549. Also, copies of such filing will be available 
for inspection and copying at the principal office of the CHX. All 
submissions should refer to File No. SR-CHX-96-04 and should be 
submitted by March 12, 1996.

    For the Commission, by Division of Market Regulation, pursuant 
to delegated authority.\10\

    \10\ 17 CFR 200.30-3(a)(12).
    
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-3668 Filed 2-16-96; 8:45 am]
BILLING CODE 8010-01-M