[Federal Register Volume 64, Number 7 (Tuesday, January 12, 1999)]
[Notices]
[Pages 1847-1849]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-595]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40880; File No. SR-CHX-98-30]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Changes by the Chicago Stock Exchange, 
Inc. Relating to MAX Executions of S&P 500 Issues, Floor Telephone 
Booth and Post Space Fees, and a Fee Waiver

January 4, 1999.
    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 December 21, 1998, the Chicago Stock Exchange, Incorporated (``CHX'' 
or ``Exchange'') filed with the Securities and Exchange commission 
(``Commission'' or ``SEC'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the CHX. 
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)(I).
    \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 Membership Dues and Fees 
Schedule to eliminate all transaction and order processing fees related 
to transactions in the stocks comprising the Standard & Poor's 500 
Stock Price Index (the ``S&P 500''), as determined and revised by 
Standard & Poor's from time to time, executed through the Exchange's 
Midwest Automated Execution System (the ``MAX'' System), effective 
January 1, 1999. Further, the Exchange proposes to amend its Membership 
Dues and Fees Schedule to change the floor telephone booth and post 
space fees charged to members from flat-rate fees to usage-based fees, 
effective July 1, 1999. In connection with the floor telephone booth 
and post space fee changes, the Exchange proposes to waive for six 
months, from January 1, 1999 to June 30, 1999, the existing floor 
telephone booth and post space charges applicable to floor members. The 
text of the proposed rule change is as follows (additions are 
italicized; delections are [bracketed]):

Membership Dues and Fees

(c) Order Processing Fee Schedule:
    Odd Lots...........................  $.35 per trade.
                                         $400.00 maximum monthly fee.
    Open Limit Orders..................  $.25 per trade (assessed on
                                          execution).
The above order processing fees shall not apply to transactions in
 NASDAQ/NMS Securities, or to transactions in the stocks comprising the
 Standard & Poor's 500 Stock Price Index executed through MAX.
(d) Transaction Fee Schedule:
    (1) Market orders sent via MAX.....  No charge.
    (2) All others orders (except as
     set forth below):
                                         Rate per share
        First 500 shares...............  $.00
        Next 2,000 shares..............  $.0075
        Next 7,500 shares..............  $.005
        Remaining shares...............  $.004 (up to a maximum of
                                          $100.00 per side)
    (3) Monthly maximums for fees
     incurred in (2) above:
        (i) Maximum monthly transaction  $7,000
         fees for orders sent via MAX.
        (ii) Maximum monthly             $78,000
         transaction fee for firms
         without a floor broker or
         market maker presence on the
         floor.
        (iii) Maximum monthly            $54,000
         transaction fee for firms with
         a floor broker or market maker
         presence on the floor.
        (iv) Maximum monthly             ...............................
         transaction fees shall not
         exceed the lesser of that
         specified in (ii) or (iii)
         above, or $.40 per 100 average
         monthly gross round lot shares.
The above transaction fees shall not apply to transactions executed
 through MAX in Tape B eligible issues or in the stocks comprising the
 Standard & Poor's 500 Stock Price Index. [which are executed through
 MAX.]
 
*                  *                  *                    *
                    *                  *                  *
(e) Equipment/Space Charges:

[[Page 1848]]

 
    Floor Telephone Booth..............  [$42 per month per booth with
                                          one telephone and $10 per
                                          month for each additional
                                          telephone in such a booth,
                                          except that there will be a
                                          minimum of $42 per month per
                                          firm occupying the booth.]
                                          Effective July 1, 1999, the
                                          expense to the Exchange of
                                          leasing the space occupied by
                                          the telephone booths shall be
                                          allocated pro rata based on
                                          usage among all floor members
                                          and member organizations on a
                                          monthly basis. Each member or
                                          member organization's portion
                                          shall be determined based on
                                          the percentage of actual
                                          square footage of floor
                                          telephone booth space occupied
                                          by each member.
    Post Space.........................  [$100 each per month] Effective
                                          July 1, 1999, the expense of
                                          the Exchange of leasing the
                                          post space shall be allocated
                                          pro rata based on usage among
                                          all floor members and member
                                          organizations on a monthly
                                          basis. Each member or member
                                          organization's portion shall
                                          be determined based on the
                                          actual square footage of the
                                          post occupied by each member.
    Technical Equipment (per month)....  Four Screen Rich Units: 250.00
                                         Three Screen Rich Units: 208.35
                                         Two Screen Rich Units: 166.65
                                         Max Floor Broker Terminals:
                                          37.95
                                         Floor Broker Printer: 49.95
                                         Specialist Back Post MAX
                                          Terminals: 37.95
                                         Specialist Printer: 49.95
    Teletype Space.....................  $25 per month for each machine
                                          of every firm employing
                                          private teletype facilities on
                                          the Floor.
    Quote Machines.....................  Quotron equipment, $180 per
                                          month. Equipment options
                                          extra.
    Floor Box Rental...................  $1 per month, payable annually.
 

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 CHX 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 CHX 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
    The Exchange is proposing three changes to its Membership Dues and 
Fees Schedule in this filing. First, the Exchange is proposing to 
eliminate all transaction and order processing fees for transactions in 
the stocks comprising the Standard & Poor's 500 Stock Price Index, as 
determined and revised by Standard & Poor's from time to time, executed 
through the Exchange's MAX System, effective January 1, 1999. The 
purpose of this change is to make the Exchange more competitive in 
attracting order flow in these actively traded stocks.
    Second, the Exchange is proposing to change the floor telephone 
booth and post space fees from flat-rate fees to pro rata fees based on 
the Exchange's cost of leasing the space as divided among members 
according to the square footage of floor telephone booth and post space 
occupied by each member, effective July 1, 1999. The purpose of this 
change is to pass through to floor members the Exchange's actual cost 
of leasing the space on the Floor so that member fees more accurately 
reflect actual Exchange costs.
    Finally, the Exchange is proposing to waive, for a period of six 
months, the current floor telephone booth and post space charges 
applicable to floor members. The waiver period will begin January 1, 
1999, and end June 30, 1999, thus coinciding with the start of the new 
floor telephone booth and post space fee structure.
    The Exchange's Finance Committee has determined that after the 
proposed changes in fee structure, the Exchange will have ample capital 
and resources to continue to fulfill its proscribed duties in its 
capacity as a self-regulatory organization and as a registered national 
securities exchange.
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 members, issuers, and other persons 
using the Exchange's facilities.

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

    The CHX does not believe that the proposed rule change will result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

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

    The foregoing rule change, which establishes or changes a due, fee, 
or other charge applicable to members of the Exchange, has become 
effective pursuant to section 19(b)(3)(A) of the Act \3\ and 
subparagraph (e)(2) of Rule 19b-4 thereunder.\4\ At any time within 60 
days of the filing of such 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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    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 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, including whether the proposed rule 
change is consistent with the Act. 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

[[Page 1849]]

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 also will be available for 
inspection and copying at the principal office of the CHX. All 
submissions should refer to File No. SR-CHX-98-30 and should be 
submitted by February 2, 1999.

    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 Secertary.
[FR Doc. 99-595 Filed 1-11-99; 8:45 am]
BILLING CODE 8010-01-M