[Federal Register Volume 66, Number 226 (Friday, November 23, 2001)]
[Notices]
[Pages 58769-58771]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-29252]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45066; File No. SR-CHX-2001-23]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, 
Incorporated to Extend a Pilot Relating to Participation in Crossing 
Transactions Effected on the Exchange Floor

November 15, 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 November 14, 2001, the Chicago Stock Exchange,

[[Page 58770]]

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 filed the proposed pursuant to section 
19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(6) \4\ thereunder, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6). The CHX provided the Commission 
written notice of its intent to file the proposal on October 31, 
2001. The Exchange has asked the Commission to waive the 30-day 
operative delay to allow the proposal to be effective upon filing 
with the Commission.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange proposes to extend through January 14, 2002, a pilot 
relating to participation in crossing transactions effected on the 
Exchange. The CHX does not propose to make any substantive or 
typographical changes to the pilot; the only change is an extension of 
the pilot's operation through January 14, 2002. 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 CHX included statements 
concerning the purpose of and basis for its proposal and discussed any 
comments it received regarding the proposal. 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
    On August 24, 2000, the Commission approved, on a pilot basis 
through February 28, 2001, a pilot rule change to CHX Article XX, Rule 
23 \5\ that permits a CHX floor broker to consummate crossing 
transactions involving 5,000 shares or more, without interference by 
any specialist or market maker, if, prior to presenting the cross 
transaction, the floor broker first requests a quote for the subject 
security. On February 23, 2001, the pilot was extended through July 9, 
2001 \6\ and rendered applicable to both Dual Trading System issues and 
Nasdaq/NM securities. The CHX inadvertently did not seek continued 
extension of the pilot before the July 9, 2001 expiration date. The 
Exchange now proposes to extend the pilot through January 14, 2002. The 
Exchange notes that despite the lapse of the pilot rule, CHX members 
have continued to adhere to the provisions of the pilot rule, which 
rule largely codified long-standing custom and practice on the CHX 
floor.
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    \5\ See Securities Exchange Act Release No. 43203 (August 24, 
2000), 65 FR 53067 (August 31, 2001) (SR-CHX-00-13).
    \6\ See Securities Exchange Act Release No. 44000 (February 23, 
2001), 66 FR 13361 (March 5, 2001) (SR-CHX-00-27).
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2. Statutory Basis
    The CHX believes the proposal is consistent with the requirements 
of the Act and the rules and regulations thereunder that are applicable 
to a national securities exchange, and, in particular, with the 
requirements of section 6(b).\7\ In particular, the CHX believes the 
proposal is consistent with section 6(b)(5) of the Act \8\ in that it 
is designed to promote just and equitable principles of trade, to 
remove impediments to, 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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    \7\ 15 U.S.C. 78f(b).
    \8\ 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.

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

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) Impose any significant burden on competition; and
    (iii) Become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to section 19(b)(3)(A) of the Act \9\ and 
Rule 19b-4(f)(6) thereunder.\10\ 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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    The Exchange has requested that the Commission accelerate the 
operative date. The Commission finds good cause to designate the 
proposal both effective and operative upon filing with the Commission 
because such designation is consistent with the protection of investors 
and the public interest. Acceleration of the operative date will allow 
the pilot to operate through January 14, 2002, the deadline for which 
self-regulatory organizations must file proposed rule changes to set 
the minimum price variation for quoting in a decimals environment. For 
these reasons, the Commission finds good cause to designate that the 
proposal is both effective and operative upon filing with the 
Commission.\11\
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    \11\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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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 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, 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 number SR-CHX-2001-23 and should be 
submitted by December 14, 2001.


[[Page 58771]]


    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-29252 Filed 11-21-01; 8:45 am]
BILLING CODE 8010-01-M