[Federal Register Volume 62, Number 54 (Thursday, March 20, 1997)]
[Notices]
[Pages 13415-13416]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7055]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38397; File No. SR-CHX-97-05]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, 
Incorporated Relating To Amending the Exchange's SRO Fee To Provide for 
an Exemption for Certain Inactive Members

March 13, 1997.
    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 
18, 1997, 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 Section (q) of its Membership Dues 
and Fees Schedule to provide for an exemption from the Exchange's SRO 
fee for certain members. Below is the text of the proposed rule change. 
Proposed new language is italicized.
    Chicago Stock Exchange, Incorporated Membership Dues and Fees.
    (q) Self-Regulatory Organization Fee,\1\ $100 per member and member 
organization per month.
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    \1\ This fee shall not be applicable to inactive organizations. 
An inactive organization is one which has no securities transaction 
revenue, as determined by annual FOCUS reports, as long as the 
organization continues to have no such revenue each month.
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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.

[[Page 13416]]

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 provide an exemption 
from the Exchange's SRO fee for certain members. The Exchange's SRO fee 
applies to members and members organizations and helps recoup costs 
incurred by the Exchange in performing its self-regulatory function. 
The Exchange proposes to exempt inactive organizations \2\ from this 
fee because the Exchange does not incur any significant costs for 
regulating these firms.
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    \2\ The Commission notes that the phrase ``inactive 
organizations'' includes both inactive members and inactive member 
organizations that meet the definition of ``inactive organization'' 
as noted in footnote number 1. Phone conversation between David 
Rusoff, Attorney, Foley & Lardner, and Heather Seidel, Attorney, 
Market Regulation, Commission, on March 7, 1997.
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    An inactive organization is defined as an organization that has no 
securities transaction revenue, as initially determined by its most 
recent annual FOCUS report, so long as the organization continues to 
have no such revenue each month.\3\ For inactive organizations which do 
not file FOCUS reports with the Exchange, such as when the CHX is not 
the Designated Examining Authority for the firm, each organization must 
still make such filings with the Exchange to support its contention 
that it is an inactive organization. If appropriate documentation is 
not received from the organization, the Exchange will impose the SRO 
fee.
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    \3\ This definition of ``inactive organization'' is the same as 
the definition for the ``inactive organization'' exemption from the 
Exchange's examination fee, section (p) under the CHX Membership 
Dues and Fee Schedule. Phone conversation between David Rusoff, 
Attorney, Foley & Lardner, and Heather Seidel, Attorney, Market 
Regulation, Commission, on March 7, 1997.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(4) of the Act \4\ 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.
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    \4\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe the proposed rule change will impose 
any 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 proposed rule change has become effective upon filing pursuant 
to Section 19(b)(3)(A) of the Act \5\ and subparagraph (e)(2) of Rule 
19b-4 \6\ thereunder, in that the proposal establishes or changes a 
due, fee, or other charge imposed by the Exchange. 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.
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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(e)(2).
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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, 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 Room. 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-97-05 and 
should be submitted by April 10, 1997.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 97-7055 Filed 3-19-97; 8:45 am]
BILLING CODE 8010-01-M