[Federal Register Volume 66, Number 136 (Monday, July 16, 2001)]
[Notices]
[Pages 37081-37082]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-17711]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44534; File No. SR-CHX-2001-14]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by The Chicago Stock Exchange, Inc., To Eliminate the ``E-
Session'' After-Hours Trading Session

July 10, 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 July 2, 2001, The Chicago Stock Exchange, Inc. (``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 
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 Exchange proposes to delete CHX Article XXA, which governed an 
after-hours trading session (the ``E-Session'') conducted by the 
Exchange, and to eliminate other rule references to the E-Session. The 
Exchange intends to cease conducting the E-Session following the 
Commission's approval of this proposed rule change. The text of the 
proposed rule change is available at the Commission and at the CHX.

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
    On February 7, 2000, the Commission approved the CHX's proposed 
rule change granting access to and governing the E-Session.\3\ 
Following continuous operation for the E-Session for the past year, the 
E-Session has not sustained the increases in order flow that the CHX 
anticipated. Consequently, in light of the costs attendant to operation 
of an after-hours trading session by a self-regulatory organization, 
the Exchange has determined that it is not feasible at this time to 
continue conducting the E-Session. The Exchange has discussed its 
intention to eliminate the E-Session with its principal E-Session 
order-sending firms, and is confident that each of these order-sending 
firms has sufficient alternative liquidity sources in the after-hours 
market. Accordingly, upon the Commission's approval of this proposed 
rule change, which proposal would delete from the CHX rules all 
references to the E-Session, the CHX intends to cease conducting the E-
Session.
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    \3\ See Securities Exchange Act Release No. 42403 (February 7, 
2000), 65 FR 7581 (February 15, 2000)(SR-CX-99-08). See also 
Securities Exchange Act Release No. 42004 (October 13, 1999), 64 FR 
56548 (October 20, 1999) (SR-CHX-99-16).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder that are applicable to a national securities exchange. In 
particular, the Exchange believe the proposed rule change is consistent 
with sections 6(b) of the Act.\4\ In particular, the CHX believes the 
proposal is consistent with the section 6(b)(5) of the Act,\5\ in that 
it is designed to promote just and equitable principles of trade, 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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    \4\ 15 U.S.C. 78f(b).
    \5\ 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 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 either solicited or received.

[[Page 37082]]

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (I) as the commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the CHX consents, the Commission will:
    A. by order approve such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule 
change should be disproved.

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 20549-0609. 
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. 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-2001-14 and should 
be submitted by August 6, 2001.
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    \6\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the division of Market Regulation, 
pursuant to delegated authority.\6\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-17711 Filed 7-13-01; 8:45 am]
BILLING CODE 8010-01-M