[Federal Register Volume 64, Number 215 (Monday, November 8, 1999)]
[Notices]
[Pages 60864-60865]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29158]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42089; File No. SR-CHX-99-23]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, 
Incorporated Amending Membership Dues and Fees Schedule for 
Transactions Occurring During the E-Session

November 2, 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 October 15, 1999, the Chicago Stock Exchange, Incorporated (``CHX'' 
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 Exchange. The 
Exchange has designated this proposal as one establishing or changing a 
due, fee, or other charge imposed by the CHX under Section 
19(b)(3)(A)(ii) of the Act,\3\ which renders the proposal effective 
upon filing with the Commission. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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, through December 31, 1999, all transaction, 
order processing and floor broker fees for transactions that occur 
during the Exchange's after-hours trading session (``E-Session'').\4\ 
The text of the proposal is available upon request from the CHX or the 
Commission.
---------------------------------------------------------------------------

    \4\ On October 13, 1999, the Commission approve, on a pilot 
basis, the CHX's proposed rule change that allows the CHX to 
implement an after-hours trading session. See Securities Exchange 
Act Release No. 42004 (October 13, 1999) (SR-CHX-99-16). The E-
Session takes place from 3:30 p.m. to 5:30 p.m. Central Time, Monday 
through Friday, and began on October 29, 1999.
---------------------------------------------------------------------------

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 Exchange 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 Exchange 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 proposed rule change amends the CHX schedule of membership dues 
and fees to eliminate, through December 31, 1999, order processing, 
transaction and floor broker fees for transactions that occur during 
the E-Session.\5\ The Exchange seeks this change to allow CHX members 
to participate in the E-Session without incurring the fees normally 
associated with their CHX transactions.\6\
---------------------------------------------------------------------------

    \5\ The fees which CHX seeks to eliminate through December 31, 
1999 with this proposed rule change include OTC agency orders in 
Nasdaq/NMS securities transacted by floor brokers, which were 
recently reviewed by the Commission. See Securities Exchange Act 
Release No. 41947 (September 29, 1999), 64 FR 54703 (October 7, 
1999) (SR-CHX-99-15).
    \6\ The Exchange notes that the vast majority of securities that 
initially will be eligible for trading in the E-Session are already 
subject to order processing and transaction fee waivers under the 
Exchange's current fee schedule because they are either Nasdaq/NMS 
issues or issues within the S&P 500. The Exchange does not 
anticipate much floor brokerage activity in the E-Session, and 
believes that waiving brokerage fees will likely have little impact 
on the Exchange's revenues. According to the Exchange, waiving the 
fees on the few transactions to which they would otherwise apply 
will allow the Exchange to simplify its communications to members 
about the fees. Telephone conversation between Paul B. O'Kelly, 
Executive Vice President, CHX, and Joseph Morra, Attorney, Division 
of Market Regulation, SEC, October 28, 1999.

---------------------------------------------------------------------------

[[Page 60865]]

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b)(4) of the Act \7\ in that it provides for the equitable 
allocation of reasonable dues, fees and other charges among its 
members.
---------------------------------------------------------------------------

    \7\15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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

    The Exchange 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 written comments were solicited or received.

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

    The proposed rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act \8\ and subparagraph (f)(2) of Rule 19b-4 
thereunder,\9\ because it involves a due, fee, or other charge. 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.\10\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
    \10\ In reviewing this proposal, the Commission has considered 
its impact on efficiency, competition, and capital formation. 15 
U.S.C. 78c(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal is 
consistent with the Act. Persons making written submissions should file 
six copies thereof with the Secretary, Securities and Exchange 
Commission, 450 Fifth Street, N.W., Washington, D.C. 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 wit the provisions 
of 5 U.S.C. 552, with 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 
Exchange. All submissions should refer to file number SR-CHX-99-23, and 
should be submitted by November 29, 1999.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-29158 Filed 11-5-99; 8:45 am]
BILLING CODE 8010-01-M