[Federal Register Volume 61, Number 143 (Wednesday, July 24, 1996)]
[Notices]
[Pages 38490-38491]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18719]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37443; File No. SR-CHX-96-17]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, 
Incorporated Relating to Clearing Support Fees

July 16, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), 15 U.S.C. Sec. 78s(b)(1), notice is hereby given that on 
July 2, 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 add an odd-lot dealer CUSIP fee to Section 
(o) of its Membership Dues and Fees Schedule. The text of the proposed 
rule change is as follows [new text is italicized]:
Chicago Stock Exchange, Incorporated
Membership Dues and Fees
    (o) Clearing Support Fees
(1) Account Fees
    First Master Account Fee: $500 per month
    Additional Master Account Fee: $300 per month
    Sub-Account Fees: $100 per account per month
(2) CUSIP Fees
    Specialist CUSIP Fee: $50 per CUSIP per month
    Market Maker CUSIP Fee: $10 per CUSIP per month
    Odd Lot Dealer CUSIP Fee:\1\ $2.50 per CUSIP per month
    Floor Broker as Principal: $2 per CUSIP per month
    \1\ The Odd Lot Dealer CUSIP Fee does not apply to any issue in 
which the off-lot dealer is also the specialist for the issue.

(minimum clearing support fee is $600 per month)
Discounts
    The above Specialist CUSIP Fee will be subject to the following 
discounts:
    If between 20 and 200 trades occur in a particular CUSIP in a given 
month, the Specialist CUSIP Fee for the CUSIP shall be $40 for that 
month.
    If less then 20 trades occur in a particular CUSIP in a given 
month, the Specialist CUSIP Fee for that CUSIP shall be $20 for that 
month.

II. Self-Regulatory Organizations' 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 place specified in Item IV below. The self-regulatory organization 
has prepared summaries, set forth in Section A, B, 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 a 
clearing support fee for odd-lot dealers. The new fee will not apply to 
any issue in which the odd-lot dealer is also the specialist for the 
issue. This new fee is similar to the clearing support fees imposed on 
specialists, market makers and floor brokers acting as principal 
pursuant to SR-CHZ-96-10.\1\ This fee relates to the additional 
services the CHX is providing to odd-lot dealers as a result of the 
Midwest Clearing Corporation's withdrawal from the clearance and 
settlement business. The odd-lot dealer clearing support fee is 
applicable to all odd-lot dealers that have entered into an agency 
agreement with the CHX pursuant to Article XXI, Rule 13 of the 
Exchange's Rules.
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    \1\ Securities Exchange Act Release No. 37054 (April 1, 1996), 
61 FR 15544 (publishing Notice of Filing and Immediate Effectiveness 
of Proposed Rule Change Relating to Clearing Support and Other 
Fees).
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    The amount of this CUSIP fee is based on expected account activity 
and the expenses that the CHX will incur in servicing accounts for odd-
lot dealers. For example, because the CHX expects odd-lot dealers to 
have less activity per CUSIP than specialists or market markers due to 
the unusually large number of issues that an odd-lot dealer typically 
trades, thus resulting in a lesser amount of staff time expended per 
CUSIP to produce reports and provide the service contemplated by the 
agency agreement, the odd-lot dealer CUSIP fee is less than the 
specialist and market maker CUSIP fee.
    2. Statutory Basis. The proposed rule change is consistent with 
Section 6(b)(4) of the Act in that it provides for the equitable 
allocation of reasonable dues, fees and other charges among its members 
and issuers and persons using its facilities.

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

    The proposed rule change will impose no 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

    The foregoing rule change establishes or changes a due, fee, or 
other charge imposed by the Exchange and, therefore, has become 
effective pursuant to Section 19(b)(3)(A)(ii) of the Act and 
subparagraph (e) of Rule 19b-4 \2\ thereunder. At any time within 60 
days of the filing of such proposed rule

[[Page 38491]]

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 purpose of the Act.
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    \2\ 17 CFR 240.19b-4.
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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, DC 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, DC 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-96-17 and should be 
submitted by August 14, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-18719 Filed 7-23-96; 8:45 am]
BILLING CODE 8010-01-M