[Federal Register Volume 64, Number 134 (Wednesday, July 14, 1999)]
[Notices]
[Pages 38060-38061]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17934]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41605; File No. SR-CHX-99-06]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change and Amendments
No. 1 by the Chicago Stock Exchange, Inc. Relating to the Minimum for
Nasdaq-100 Shares and Disclaimer of Liability With Respect to the
Nasdaq-100 Index
July 7, 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 June 21, 1999, the Chicago Stock Exchange, Inc. (``CHX'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'' or the ``SEC'') the proposed rule change, as described
in Items I, and II below, which Items have been prepared by the self-
regulatory organization. The filing was subsequently amended on July 1,
1999.\3\ The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons, and simultaneously
approving the filing.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In Amendment No. 1, the Exchange moved a new section
proposed under CHX Rule 24 of Article XXVIII, Investment Company
Units, to CHX Rule 25 of Article XXVIII, Portfolio Depository
Receipts; as well as made a typographic correction to the proposed
rule change. See Letter from Kirsten M. Carlson, Foley & Lardner, to
Katherine A. England, Assistant Director, Division of Market
Regulation, Commission, dated June 30, 1999 (``Amendment No. 1'').
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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 CHX Rule 22 of Article XX, to amend
interpretation and policy .05 thereunder, to permit dealings in Nasdaq-
100 Shares of the Nasdaq 100 Trust (``Nasdaq-100 Shares'') in
increments smaller than the minimum variation, and to amend CHX Rule 25
of Article XXVIII relating to disclaimer of liability with respect to
the Nasdaq-100 Index.\4\
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\4\ See Amendment No. 1, supra note 3.
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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 III 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
The Exchange is proposing to amend CHX Rule 22 of Article XX, to
amend interpretation and policy .05 thereunder, to permit dealings in
Nasdaq-100 Shares in increments of \1/64\ of $1.00. The Nasdaq 100
Trust is a unit investment trust sponsored by Nasdaq-Amex Investment
Product Services, Inc. with a portfolio based on the component stocks
of the Nasdaq-100 Index. The Exchange intends to trade the Nasdaq-100
Shares pursuant to unlisted trading privileges (``UTP'') under the
Exchange's Investment Company Unit rules.\5\ These securities are
currently traded on the American Stock Exchange (``Amex'') in
increments of \1/64\ of $1.00 and, thus, the Exchange believes it is
appropriate to trade these securities on the Exchange with the same
minimum increment of \1/64\ of $1.00 as well.\6\
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\5\ See CHX Rule 24 of Article XXVIII.
\6\ See Securities Exchange Act Release No. 41119 (February 26,
1999), 64 FR 11510 (March 9, 1999) (SR-Amex-98-34).
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In connection with the Exchange's license agreement with the Nasdaq
Stock Market (``Nasdaq'') relating to, among other things, the use of
the name ``Nasdaq-100 Shares,'' and the disclaimers of liability
relating to the Nasdaq-100 Index, the Exchange is proposing to amend
CHX Rule 25 of Article XXVIII to add a new subsection (h) to codify a
rule governing disclaimers of liability relating to the Nasdaq-100
Index.\7\ The proposed CHX Rule 25 of Article XXVIII will reflect the
disclaimers of liability language adopted by the Amex in its Rule
1006.\8\
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\7\ See Amendment No. 1, supra note 3.
\8\ Id.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \9\ in general and furthers the objectives
of Section 6(b)(5) \10\ in particular in that it is designed to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons regulating securities transactions, 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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\9\ 15 U.S.C. 78f(b).
\10\ 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 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 either solicited or received.
III. 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 20549-0609.
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 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
CHX. All submissions should refer to File No. SR-CHX-99-06 and should
be submitted by August 4, 1999.
IV. Commission's Findings and Order Granting Accelerated Approval
of Proposed Rule Change
The Commission finds that the CHX's proposed rule change is
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\11\ Specifically, the Commission believes that the proposal
is consistent with Section 6(b)(5) of the Act \12\ because it will
facilitate transactions in securities by permitting
[[Page 38061]]
the CHX: (1) To trade Nasdaq-100 Shares, on a UTP basis, in increments
of \1/64\th of $1.00, and (2) to adopt a disclaimer of liability rule
relating to the Nasdaq-100 Index, consistent with the license agreement
between Nasdaq and the Exchange.
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\11\ In reviewing the proposed rule change, the Commission
considered its potential impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
\12\ 15 U.S.C. 78f(b)(5).
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The Exchange has requested that the Commission find good cause
pursuant to Section 19(b)(2) of the Act for approving the proposed rule
change prior to the thirtieth day after the publication of the proposal
in the Federal Register. The Commission believes that such action is
appropriate, in that the proposed rule change establishes the same
minimum trading variation as the Amex has adopted for Nasdaq-100
Shares. Further, the proposed rule relating to the disclaimer of
liability with respect to the Nasdaq-100 Index is also identical to the
disclaimer of liability adopted by the Amex.\13\ For the reasons set
forth above, the Commission does not believe that this proposal raises
any new regulatory issues. Accordingly, the Commission finds that there
is good cause for approving the proposed rule change prior to the
thirtieth day after the publication of the proposal in the Federal
Register.
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\13\ The Amex Disclaimer of liability provision was approved in
Securities Exchange Act Release Nos. 41119 (February 26, 1999), and
41562 (June 25, 1999). It was subject to the full notice and comment
process in Securities Exchange Act Release No. 41119 and no comments
were received with respect to the disclaimer.
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\14\ that the proposed rule change is hereby approved on an
accelerated basis.
\14\ 15 U.S.C. 78s(b)(2).
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-17934 Filed 7-13-99; 8:45 am]
BILLING CODE 8010-01-M