[Federal Register Volume 62, Number 140 (Tuesday, July 22, 1997)]
[Notices]
[Pages 39293-39294]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19194]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-38842; File No. SR-CSE-97-08]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Cincinnati Stock Exchange, 
Inc., Relating to Transaction Fees

July 16, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on July 15, 1997, The 
Cincinnati Stock Exchange, Incorporated (``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 CSE.\2\ The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1) (1988).
    \2\ The proposed rule change was originally submitted on June 
27, 1997.
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I. Self-Regulatory Organizations Statement of the Terms of Substance of 
the Proposed Rule Change

    The Exchange hereby proposes to amend the schedule of fees set 
forth in Exchange Rule 11.1010. The text of the proposed rule change is 
below. Additions are in italics; deletions are bracketed.

The Cincinnati Stock Exchange, Incorporated

* * * * *
Rule 11.10  National Securities Trading System Fees
A. Trading Fees
    (a) Agency Transactions. As in the case for Preferenced 
transactions, members acting as an agent will be charged the per share 
incremental rates as noted below for public agency transactions:

------------------------------------------------------------------------
                                                        Charge per share
               Avg. daily share* volume                    (dollars)    
------------------------------------------------------------------------
1 to 250,000.........................................    [0.0020] 0.0015
250,001 to 500,000...................................    [0.0015] 0.0013
500,001 to 750,000...................................    [0.0013] 0.0009
[1,000,001] 750,001 to 1,250,000 [1,500,001].........    [0.0009] 0.0007
1,250,001 to 1,750,000...............................    [0.0007] 0.0005
1,750,001 and higher.................................                  0
------------------------------------------------------------------------
*Odd-lot Shares Excluded.                                               

    (b) No Change.
    (c) Agency Order Mix Fee. Agency limit orders shall be charged 
based on the percentage of public agency market order shares executed 
on the Exchange during the trading month, according to the following 
schedule:

------------------------------------------------------------------------
                                              Agency limit order mix fee
    Percent market order shares executed              (dollars)         
------------------------------------------------------------------------
25 and higher..............................  No Charge                  
20-24.99...................................  .005 per share             
15-19.99...................................  .01 per share              
10-14.99...................................  .015 per share             
Less than 10...............................  .02 per share              
------------------------------------------------------------------------

    (c)-(e) To be renumbered (d)-(f).
    [(f) Maximum Trade Charge. The maximum charge per firm for any 
single transaction shall be $150.00 except for crosses and meets.]
    (g) Proprietary (principal) Transactions
    (1) All Designated Dealers, except those acting as Preferencig 
Dealers or Contributing Dealers, will be charged [$0.005] $.0025 per 
share ([$0.50] $0.25/100 shares) for principal transactions [excluding] 
including ITS transactions, with a maximum charge of $3.75 per firm per 
side of transaction. [Designated Dealers will be billed $0.005 per 
share on outbound ITS trades and $0.0000 per share on inbound ITS 
trades. All Designated Dealers' charges are subject to the minimum 
charges set forth in paragraph 5 below. Billable shares shall not 
exceed 650,000 shares times the number of trading days in any given 
month.]
    (2) Designated Dealers acting as ``Dealer of the Day'' will be 
charged [$0.005] $0.0025 per share ([$0.50] $0.25/100 shares) for 
principal transactions.
    (3) Contributing Dealers will be charged $0.02 per share ($2.00/100 
shares) for principal transactions.
    (4) Members executing principal transactions in securities for 
which they are not registered as a Designated or Contributing Dealer 
will be charged $0.02 per share ($2.00/100 shares).
    [(5) Designated Dealers (DD) shall have the following minimum 
average per share charge applied to their aggregate monthly DD 
transactions using the DD's average volume per trading day:

[[Page 39294]]



------------------------------------------------------------------------
                                                              Per share 
                                                               minimum  
      Designated dealer's average share volume per day          charge  
                                                              (dollars) 
------------------------------------------------------------------------
1 to 2,000,000.............................................       0.0038
2,000,001 and higher.......................................      0.0030]
------------------------------------------------------------------------

    (h) Preferenced Transactions. Designated Dealers that are 
preferencing transactions are charged for one side of their preferenced 
transactions and are subject to the incremental rates as noted below:

------------------------------------------------------------------------
                                                        Charge per share
               Avg. daily share* volume                    (dollars)    
------------------------------------------------------------------------
1 to 250,000.........................................  [$0.0020] $0.0015
250,001 to 500,000...................................  [$0.0015] $0.0013
500,001 to 750,000...................................  [$0.0013] $0.0009
[1,000,001] 750,001 to 1,250,001 [1,500,001].........  [$0.0009] $0.0007
1,250,001 to 1,750,000...............................  [$0.0007] $0.0005
1,750,001 and higher.................................                  0
------------------------------------------------------------------------
*Odd-Lot Shares Excluded.                                               

    (i)-(n) No Change.
    B. Membership Fees.
    No Change.

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 parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    (1) Purpose. The Exchange is changing its fee schedule as part of 
its annual budget process. The Exchange's transaction fees have been 
reduced in order to retain CSE's position as the low-cost provider of 
exchange services. In addition, the Exchange's fees have been revised 
in light of recent changes in the National Market System. Specifically, 
the Commission's new limit order display rule, in conjunction with 
evolving payment for order flow practices, recent changes to the 
minimum trading increment and heightened systems demands caused by 
these changes have led the Exchange to impose an order mix charge which 
will ensure that the Exchange receives a typical industry mix of market 
and limit orders.
    (2) Basis. The Exchange believes that proposed rule change is 
consistent with Section 6(b) of the Act, in general, and furthers the 
objectives of Section 6(b)(4), 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. 
Specifically, the proposed rule change will reduce transaction fees on 
the Exchange, thereby reducing members' costs. The Exchange believes 
that these changes will benefit the investing public as members pass 
these savings along to their customers. In addition, the proposed rule 
change is consistent with Section 6(b)(5) of the Act in that it is 
designed to promote just and equitable principles of trade by helping 
to ensure that the Exchange receives a typical mix of market and limit 
orders.

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

    The CSE does not believe that 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 Exchange has designated this proposal as establishing or 
changing a due, fee or other charge under Section 19(b)(3)(A) of the 
Act \3\ and subparagraph (e) of Rule 19b-4,\4\ which renders the 
proposed rule change effective on July 15, 1997, the date of receipt of 
this filing by the Commission.
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    \3\ 15 U.S.C. Sec. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(e) (1991).
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    At any time within sixty days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary to 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, 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 in 
the Commission's Public Reference Room. 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-97-08 and should 
be submitted by August 12, 1997.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-19194 Filed 7-21-97; 8:45 am]
BILLING CODE 8010-01-M