[Federal Register Volume 62, Number 206 (Friday, October 24, 1997)]
[Notices]
[Pages 55445-55447]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-28180]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39257; File No. SR-CHX-97-27]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, 
Inc. Relating to the Execution of Stopped Orders Under the Enhanced 
SuperMAX Program

October 17, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on October 15, 1997, the Chicago Stock Exchange, Incorporated (``CHX'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``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

[[Page 55446]]

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).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its Rule 37(e) of Article XX 
relating to the execution of stopped orders under the CHX's Enhanced 
SuperMAX program. The text of the proposed rule change is available at 
the Office of the Secretary, the CHX, and at the Commission.

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
    On May 22, 1995, the Commission approved a proposed rule change 
that allows specialists on the Exchange, through the Exchange's MAX 
system, to provide order execution guarantees that are more favorable 
than those required under CHX Rule 37(a), Article XX.\3\ That approval 
order contemplated that the CHX would file with the Commission specific 
modifications to the parameters of MAX that are required to implement 
various options available under the rule.\4\
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    \3\ See Securities Exchange Act Release No. 35753 (May 22, 
1995), 60 FR 28007 (May 26, 1995) (order approving File No. SR-CHX-
95-08).
    \4\ Id.
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    On September 16, 1997, the CHX proposed changes to the Enhanced 
SuperMAX program.\5\ For technological reasons, the CHX has decided not 
to implement those changes at this time. Instead, the CHX will continue 
to operate the Enhanced SuperMAX program, as that program existed prior 
to the September 1997 proposed changes.
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    \5\ See Securities Exchange Act Release No. 39162 (September 30, 
1997), 62 FR 52367 (October 7, 1997) (File No. SR-CHX-97-23).
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    As a result, as is currently the case, under the Enhanced SuperMAX 
program, certain orders will be ``stopped'' at the ITS BBO (as that 
term is defined in Article XX, Rule 37 of the CHX rules) and will be 
executed with reference to the next primary market sale. The Enhanced 
SuperMAX program will continue to include a time-out feature whereby if 
there are no executions in the primary market after the order has been 
stopped for a designated time period, the order will be executed at the 
stopped price at the end of such period. Such period, known as a time-
out period, will continue to: (1) Be pre-selected by a specialist on a 
stock-by-stock basis based on the size of the order; (2) be able to be 
changed by a specialist no more frequently than once a month; and (3) 
last no less than 30 seconds.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b)(5) of the Act \6\ in that it is designed to promote just 
and equitable principles of trade, to remove impediments and to perfect 
the mechanism of a free and open market and a national market system, 
and, in general, to protect investors and the public interest.
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    \6\ 15 U.S.C. 78f(b)(5).
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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 comments were solicited or received.

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

    The Commission finds that the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \7\ and Rule 19b-
4(e)(6) \8\ thereunder because it: (1) Does not significantly affect 
the protection of investors or the public interest; (2) does not impose 
any significant burden on competition; and (3) was provided by the 
Exchange to the Commission with written notice of its intent to file 
the proposed rule change at least five days prior to the filing date. A 
proposed rule change filed under Rule 19b-4(e) 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. At any time within 
60 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 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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    \7\ 15 U.S.C. 78s(b)(30)(A).
    \8\ 17 CFR 240.19b-4(e)(6).
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    The Commission finds good cause to accelerate the thirty day period 
for the proposed rule change to become operative prior to the thirtieth 
day after the date of the filing, October 15, 1997. The Commission 
notes that due to technological obstacles, the Exchange currently is 
unable to implement the changes to its Enhanced SuperMAX program 
envisioned in its September filing, which became effective upon filing. 
The Commission further notes that acceleration will allow the Exchange 
to continue to enforce its rules relating to the treatment of stopped 
orders under the Enhanced SuperMAX program, as such rules existed prior 
to the September filing. For the foregoing reasons, the proposed rule 
change will become operative immediately.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing. Persons making written submission 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington DC 20549. Copies 
of the submissions, 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 U.S.C. 552, will be available for inspection and copying in the 
Commission's Public Reference Room, 450 Fifth Street, NW., Washington, 
DC 20549. Copies of such filing also will be available for inspection 
and copying at the principal office of the CHX. All submissions should 
refer to file number SR-CHX-97-27 and should be submitted by November 
14, 1997.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).

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[[Page 55447]]

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-28180 Filed 10-23-97; 8:45 am]
BILLING CODE 8010-10-M