[Federal Register Volume 67, Number 52 (Monday, March 18, 2002)]
[Notices]
[Pages 12069-12070]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-6455]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45538;File No. SR-CSE-2002-02]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by The Cincinnati Stock Exchange, Incorporated To Amend Trading 
Rules To Eliminate References to Fractional Price Variations

March 12, 2002.
    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 March 4, 2002, The Cincinnati Stock Exchange, Incorporated (``CSE'' 
or ``Exchange'') filed with the Securities and Exchange

[[Page 12070]]

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 CSE proposes to activate the provisions of CSE Rules 11.3(a) 
and (c) to eliminate Rules 11.3(a) and (c) upon the completion of 
decimal conversion. The text of the proposed rule change is below. 
Proposed deletions are in brackets.

Rule 11.3  Price Variations

    [(a) Bids or offers in stocks traded on the Exchange at or above 
$1.00 per share shall not be made at a smaller variation than \1/8\ of 
$1.00 per share; in stocks below $1.00 but at or above \1/2\ of $1.00 
per share, at a smaller variation than \1/6\ of $1.00; in stocks below 
\1/2\ of $1.00 per share, at a smaller variation than \1/32\ of $1.00 
per share; and in bonds at a smaller variation than \1/8\ of 1% of the 
principal amount, except in the case of a dually or multiply-traded 
security where the principal exchange shall have a different rule or 
when the Board of Trustees of the Exchange shall provide otherwise. 
(Rule 11.3(a) will be eliminated upon completion of decimal 
conversion.)]
    [(b)] Bids or offers in stocks traded on the Exchange shall not be 
made at a smaller variation than $.01 per share; and in bonds at a 
smaller variation than \1/8\ of 1% of the principal amount.
    [(c) Not withstanding (b) above, bids and offers in stocks not 
participating in the decimal pilot program and not converted to decimal 
pricing at or above $1.00 per share must be made in fractions at a 
minimum variation of \1/16\ per share. The minimum variation of .01 
described in (b) above is applicable to stocks that have been converted 
to decimal pricing. (Rule 11.3(c) will be eliminated upon completion of 
the decimal conversion.)]
* * * * *

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 self-regulatory organization 
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 self-regulatory organization 
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 CSE proposes to eliminate references to fractional price 
variations in stocks traded on the Exchange. In implementing the 
conversion to decimal pricing, the Exchange added provisions to Rules 
11.3(a) and (c) that called for the elimination of said rules upon 
completion of the decimal conversion process.\3\ With decimal pricing 
now fully implemented, the Exchange is now activating the previously 
approved clauses that eliminate 11.3(a) and (c). With regard to all 
equity securities, Rule 11.3 will reflect only decimal pricing upon 
approval of this proposed rule change.
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    \3\ See Securities Exchange Act Release No. 43408 (October 3, 
2000), 65 FR 60708 (October 12, 2000)(order approving CSE Rules that 
accommodate the implementation of decimal pricing).
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2. Statutory Basis
    The CSE believes that the proposed rule change is consistent with 
Section 6(b) of the Act \4\ in general and furthers the objectives of 
Section 6(b)(5) \5\ in particular. The CSE believes the proposed rule 
change is consistent with Section 6(b)(5) \6\ in that it is designed to 
promote just and equitable principles of trade and to remove 
impediments to and 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).
    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The CSE 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 comments were solicited or received in connection with the 
proposed rule change.

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 Exchange 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 disapproved.

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 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 
CSE. All submissions should refer to file No. SR-CSE-2002-02 and should 
be submitted by April 8, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-6455 Filed 3-15-02; 8:45 am]
BILLING CODE 8010-01-P