[Federal Register Volume 67, Number 44 (Wednesday, March 6, 2002)]
[Notices]
[Pages 10243-10244]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5270]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45482; File No. SR-CHX-2002-03]


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

February 27, 2002.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on January 14, 2002, 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 filed the proposal pursuant to section 
19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(6) thereunder,\4\ 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).
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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 April 15, 2002, a pilot 
rule change 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 expiration date through April 15, 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, the proposed rule change 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 cross 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 to an expiration date of July 
9, 2001 and rendered applicable to both Dual Trading System issues and 
Nasdaq/NM securities.\6\ Following a brief lapse of the pilot, it was 
extended through January 14, 2002.\7\ 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 expiration date through April 15, 2002.
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    \5\ See Securities Exchange Act Release No. 43203 (August 24, 
2000), 65 FR 53067 (August 31, 2000) (SR-CHX-00-13). The pilot 
originally applied only to Dual Trading System issues, because the 
Nasdaq market had not yet converted to decimal pricing.
    \6\ See Securities Exchange Act Release No. 44000 (February 23, 
2001), 66 FR 13361 (March 5, 2001) (SR-CHX-00-27).
    \7\ See Securities Exchange Act Release No. 45066 (November 15, 
2001), 66 FR 58769 (November 23, 2001) (SR-CHX-2001-23).
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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).\8\ The CHX believes the proposal is 
consistent with section 6(b)(5) of the Act\9\ 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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    \8\ 15 U.S.C. 78(f)(b).
    \9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement of 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 Regarding 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 \10\ and 
Rule 19b-4(f)(6) thereunder.\11\ 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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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
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    The Exchange has requested that the Commission waive the 5-day pre-
filing requirement and accelerate the operative date. The Commission 
finds good cause to waive the 5-day pre-filing requirement and to 
designate the proposal to become operative immediately because such 
designation is consistent with the protection of investors and the 
public interest. Acceleration of the operative date and waiver of the 
5-day pre-fling requirement will allow the pilot to continue 
uninterrupted through April 15, 2002. For these reasons, the Commission 
finds good cause to designate that the proposal is both effective and 
operative upon filing with the Commission.\12\
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    \12\ For purposes only of waiving the 5-day pre-filing 
requirement and 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

[[Page 10244]]

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-2002-03 and should be 
submitted by March 27, 2002.


    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-5270 Filed 3-5-02; 8:45 am]
BILLING CODE 8010-01-U