[Federal Register Volume 64, Number 67 (Thursday, April 8, 1999)]
[Notices]
[Pages 17204-17206]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-8682]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41238; File No. SR-CSE-99-03]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by The Cincinnati Stock Exchange,
Inc., Relating to Transaction and Book Fees
March 31, 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 March 1, 1999, the Cincinnati Stock Exchange,
[[Page 17205]]
Inc. (``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.
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)
\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 CSE proposes to amend its schedule of books and transaction
fees. The text of the proposed rule change is as follows (additions are
italicized; deletions are in brackets):
Rule 11.10 National Securities Trading System Fees
A. Trading Fees
(a)-(i) No Change.
(j) Tape B Transactions. The CSE will not impose a transaction fee
on Consolidated Tape B securities. In addition, Members will receive a
50 per cent pro rata transaction credit of Tape B revenue.\3\ [based on
the following schedule:
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\3\ Telephone conversation between David Colker, President and
Chief Operating Officer, CSE, and Daniel M. Gray, Special Counsel,
Division of Market Regulation, Commission, on March 31, 1999.
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Percentage of
Average Quarterly Exchange Tape B Transaction Tape B Revenue
Credited
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1-2.99%................................................. 10
3-4.99%................................................. 25
5-6.99%................................................. 30
7% and.................................................. 40
greater................................................. ..............
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(k) DD Issue/Book Fees. Designated Dealers will be charged a
monthly book fee based on the following incremental schedule:
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Number of Issues Fee Per Issue
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0 to 150 [500].......................................... $20.00 [25.00]
[500] 151 to 300 [750].................................. 10.00
[751] 301 and higher.................................... 5.00
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[The DD Issue/Book Fee shall be $5.00 per issue where there is only
one Designated Dealer in that issue.]
(l)-(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 CSE is modifying its book fees and is implementing an
improvement to its CTA Network B (``Tape B'') transaction credit in
order to create additional incentives to trade on the Exchange. These
actions are consistent with the CSE's ongoing efforts to remain the
low-cost provider of exchange services in the National Market System.
Book fees are charged to Designated Dealers for each issue in which
they are registered as a specialist. The fee for the first tier of
issues is reduced from $25 per issue to $20 per issue, and the upper
limit of the first tier is reduced from 500 issues to 150 issues.
Although the fee per issue for the second and third tiers will remain
the same, the number of issues covered by the second tier is now 151 to
300, and the number of issues covered by the third tier is now 301 and
higher. Finally, the limitation of the fee per issue to $5 for issues
in which there is only Designated Dealer is deleted. Under the revised
Tape B program, member firms will receive fifty percent (50%) of all
Tape B revenue on a pro rata without regard to market share
prerequisites.
2. Statutory Basis
The CSE believes the proposed rule change is consistent with
section 6(b) of the Act,\4\ in general, and furthers the objectives of
section 6(b)(5),\5\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
In addition, the Exchange believes that the proposed rule change is
consistent with section 6(b)(4) of the Act \6\ in that it is designed
to provide for the equitable allocation of reasonable dues, fees, and
other charges among Exchange members by crediting members on a pro rata
basis.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
\6\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The CSE does not believe that the proposed rule change will impose
any inappropriate 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 in connection with the proposed rule
change.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
The foregoing rule change has become effective pursuant to section
19(b)(3)(A) of the Act \7\ and subparagraph (f) of Rule 19b-4
thereunder \8\ because it establishes or changes a due, fee, or other
charge. 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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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(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.\9\ Persons making written
submissions should file six copies thereof with the Secretary,
Securities and Exchange Commission, 450 Fifth Street, NW., Washington,
DC 20549-0609. 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 in the Commission's Public Reference Room.
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\9\ In reviewing the proposed rule change, the Commission
considered its potential impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
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Copies of such filings will also be available for inspection and
copying at the principal office of the CSE. All submissions should
refer to File No. SR-CSE-99-03 and should be submitted by April 29,
1999.
[[Page 17206]]
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-8682 Filed 4-7-99; 8:45 am]
BILLING CODE 8010-01-M