[Federal Register Volume 61, Number 37 (Friday, February 23, 1996)]
[Notices]
[Pages 7032-7033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4122]



-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36851; File No. SR-CHX-96-05]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, 
Incorporated Relating to Acting as Agent for Members and Member 
Organizations

February 15, 1996.
    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 February 
7, 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.

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Article XXI, Rule 13 of the CHX's 
rules relating to the CHX acting as agent for certain persons.

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
    In Securities Exchange Act Release No. 36684 (January 5, 1996), 61 
FR 1195 (January 17, 1996) (File No. SR-CHX-95-27), the Commission 
approved a proposed rule change by the Exchange relating to its 
decision to withdraw from the clearance and settlement and securities 
depository businesses conducted by its subsidiaries, among other 
things. In Securities Exchange Act Release No. 36723 (January 16, 
1996), 61 FR 1803 (January 23, 1996) (File No. SR-CHX-95-29), the 
Commission approved a proposed rule change by the Exchange making 
certain changes to its rules that were necessitated by its withdrawal 
from those businesses. One change related to the adoption of a new 
Article XXI, Rule 13 that permits the Exchange to act as agent on 
behalf of specialists, market makers, and floor brokers.\1\ However, it 
has become apparent that the Exchange needs the flexibility to be able 
to provide this service to qualified non-floor members that are members 
of a Qualified Clearing Agency (as that term is defined in the 

[[Page 7033]]
CHX rules).\2\ Thus, the purpose of the proposed rule change is to 
expand the scope of this agency service.

    \1\ Specifically, Article XXI, Rule 13 authorizes the Exchange 
to enter into agreements with specialists, market makers, or floor 
brokers to perform various functions on behalf of and as agent for 
them. Such functions may include making deposits or withdrawals from 
a bank account, borrowing securities, providing and keeping reports 
and records, and performing special cashiering functions, among 
other things.
    \2\ See CHX Article XXI, Rule 4, Interpretation and Policy .03.
---------------------------------------------------------------------------

2. Statutory Basis
    The proposed rule change is consistent with Section 6(b)(5) of the 
Act \3\ in that it is designed to promote just and equitable principles 
of trade, to remove impediments to and perfect the mechanism of a free 
open market and a national market system, and, in general, to protect 
investors and the public interest.

    \3\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will 
impose a 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 solicited or received with respect to the 
proposed rule change.

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

    Because the foregoing 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) the Exchange has 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, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \4\ and Rule 19b-4(e)(6) thereunder.\5\

    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(e)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(e)(6) does not become 
operative prior to thirty days after the date of filing or such shorter 
time as the Commission may designate if such action is consistent with 
the protection of investors and the public interest. In conjunction 
with the Exchange's recent withdrawal from the securities clearance and 
depository businesses, the Commission approved new CHX Article XXI, 
Rule 13, which permits the CHX to act as agent on behalf of 
specialists, market makers, and floor brokers. As it subsequently has 
become apparent to the Exchange that the CHX needs the flexibility to 
be able to act as agent on behalf of non-floor members that are members 
of a Qualified Clearing Agency, the CHX requests that the Commission 
accelerate the implementation of the proposed rule change so that it 
may take effect prior to the thirty days specified under Rule 19b-
4(e)(6)(iii).\6\ The Commission finds that the proposed rule change is 
consistent with the protection of investors and the public interest and 
therefore has determined to make the proposed rule change operative as 
of the date of this order.

    \6\ 17 CFR 240.19b-4(e)(6)(iii).
---------------------------------------------------------------------------

    At any time within 60 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, 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. 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 Exchange. All 
submissions should refer to File No. SR-CHX-96-05 and should be 
submitted by March 15, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-4122 Filed 2-22-96; 8:45 am]
BILLING CODE 8010-01-M