[Federal Register Volume 61, Number 178 (Thursday, September 12, 1996)]
[Notices]
[Pages 48185-48186]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23348]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37653; File No. SR-CSE-96-05]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by The Cincinnati Stock Exchange Relating to Day Trading Margin 
Requirements

September 6, 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 August 
15, 1996, the Cincinnati Stock Exchange (``CSE'' 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 CSE proposes to amend its rules concerning day trading margin 
requirements. The text of the proposed rule change is set forth below 
[New text is italicized; deleted text is bracketed]:

Rule 6.2. Day Trading Margin

    (a) The term ``day trading'' means the purchasing and selling of 
the same security on the same day. A ``day trader'' is any customer 
whose trading shows a pattern of day trading.
    (b) Whenever day trading occurs in a customer's margin account the 
margin to be maintained shall be the margin on the ``long'' or 
``short'' transaction, whichever occurred first. When day trading 
occurs in the account of a day trader, the margin to be maintained 
shall be the margin on the ``long'' or ``short'' transaction, which 
ever occurred first.
    (c) No member shall permit a public customer to make a practice, 
directly or indirectly, of effecting transactions in a cash account 
where the cost of securities purchased is met by the sale of the same 
securities. No member shall permit a public customer to make a practice 
of selling securities with them in a cash account which are to be 
received against payment from another broker-dealer where such 
securities were purchased and are not yet paid for.

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 CSE 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 CSE 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

    The purpose of the proposed rule change is to enhance the financial 
protections and therefore the integrity of the Exchange's markets by 
ensuring that customers maintain adequate margin reserves in their 
accounts. The proposed rule change requires day traders to maintain 
margins sufficient to cover their intraday ``long'' or ``short'' 
positions, depending upon which occurred first, for a particular day.
    Because the proposed rule change will enhance the financial 
protections and the integrity of the exchange's markets, the Exchange 
believes that the proposed rule change is consistent with

[[Page 48186]]

Section 6 of the Act in general and with Section 6(b)(5) in particular 
in that it is designed to promote just and equitable principles of 
trade and to protect investors and the public interest.

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

    The Exchange believes the proposed rule change will impose no 
inappropriate 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

    Within 35 days of the publication of this notice in theFederal 
Register or within such longer 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 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. 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-96-05 and should be 
submitted by October 3, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\1\
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    \1\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-23348 Filed 9-11-96; 8:45 am]
BILLING CODE 8010-01-M