[Federal Register Volume 66, Number 114 (Wednesday, June 13, 2001)]
[Notices]
[Pages 31960-31961]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-14873]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44392; File No. SR-CHX-2001-12]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, 
Inc. Amending Its Membership Dues and Fees Schedule

June 6, 2001.
    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 May 24, 2001, the Chicago Stock Exchange, Inc. (``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 
Exchange. 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 CHX proposes to amend its membership dues and fees schedule 
(the ``Schedule''), effective June 1, 2001, to begin rebilling member 
firms for execution quality reports prepared by third parties pursuant 
to Rule 11 Ac1-5 \3\ (the ``Rule'') under the Act and to increase the 
earned credits available through the specialist credit program. Below 
is the text of the proposed rule change; proposed additions are 
italicized and proposed deletions are [bracketed].
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    \3\ 17 CFR 240.11 Ac1-5.
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* * * * *
MEMBERSHIP DUES AND FEES
* * * * *
H. Equipment, Information Services and Technology Charges
* * * * *
Execution quality reports prepared by third parties
      Rebilled at cost.
* * * * *
M. Credits
1. Specialist Credits
    Total monthly fees owed by a specialist to the Exchange will be 
reduced (and specialists will be paid each month for any unused credits 
[but to no less than zero]) by the application of the following 
credits:
* * * * *

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 proposed rule change amends the Schedule in two ways. First, 
the proposal would assess a new fee that reimburses the Exchange for 
its cost in procuring execution quality reports pursuant to the Rule 
\4\ that are prepared by third parties. The Exchange currently is 
compiling and making public, at no cost to its member firms, the data 
required by the Rule. From time to time, however, the Exchange 
contracts with third parties to provide separate execution quality 
reports for its member firms. Through this proposal, the Exchange 
proposes to pass the cost of these reports on to the members that 
receive them.
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    \4\ Generally, the Rule seeks to improve the ability of public 
investors to evaluate how their orders are handled after being 
submitted to a broker-dealer for execution. The Rule requires market 
centers that trade national market system securities to prepare and 
make publicly available standardized, monthly reports containing 
statistical information concerning the handling and execution of 
their covered orders. To facilitate cross-market comparisons, the 
Rule established and defines uniform measures to execution quality, 
including effective spread, rate of price improvement and 
disimprovement, fill rate, and execution speed.
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    Second, the proposed rule change would revise the specialist credit 
program to provide that the Exchange will pay specialists for any 
unused credits that they earn each month. The CHX represents that this 
credit program is designed to stimulate growth on the Exchange, 
exchange the competitive capability of specialist firms, and foster 
cooperation on the Exchange's trading floor by rewarding specialists 
for their work to increase Exchange revenue.

[[Page 31961]]

2. Statutory Basis
    The CHX believes that the proposed rule change is consistent with 
Section 6(b)(4) of the Act \5\ in that it provides for the equitable 
allocation of reasonable dues, fees and other charges among its 
members.
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    \5\ 15 U.S.C. 78f(b)(4).
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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 that is not necessary or appropriate 
in furtherance of the purpose of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received from Members, Participants, or Others

    The Exchange did not solicit or receive written comments on the 
proposed rule change.

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,\6\ and Rule 19b-4(f)(2) thereunder,\7\ in 
that 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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    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 17 CFT 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 for 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-2001-12 and should 
be submitted by July 5, 2001.
    For the Commission, by the Division of Market Regulation, pursuant 
to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12)

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-14873 Filed 6-12-01; 8:45 am]
BILLING CODE 8010-01-M