[Federal Register Volume 67, Number 56 (Friday, March 22, 2002)]
[Notices]
[Pages 13385-13386]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-6937]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45585; File No. SR-CHX-2002-06]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Chicago Stock Exchange, Incorporated Confirming Changes 
Arising From the Securities Industry Transition to a Decimal Pricing 
Environment

March 18, 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 March 1, 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 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

    In this submission, the Exchange proposes to confirm the amendment 
of certain CHX rules that were impacted by the securities industry 
transition to a decimal pricing environment. 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 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 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
    The Exchange proposes to confirm its amendment of certain CHX rules 
that were impacted by the securities industry transition to a decimal 
pricing environment. The amendments described in this submission 
consist of changes that: (1) Confirm that the Exchange's minimum 
trading variation is $.01; (2) delete references to the procedures and 
conventions that were used during the conversion from quoting in 
fractions to quoting in decimals; and (3) remove all fractional price 
increments set forth in the current version of certain CHX rules.
    Minimum Price Variation. The Exchange's rules currently state that 
all issues quoting in decimals will quote in increments of $.01 or any 
other variation required by the joint decimalization implementation 
plan filed with the Commission. This submission confirms the $.01 
quoting increment and deletes references to the joint decimalization 
plan.
    Removing references to the conversion from fractional to decimal 
pricing. Article XXB of the Exchange's Rules currently contains rules 
relating to the transition from a fractional pricing environment to one 
based on decimals. Now that this process has been completed, the 
Exchange believes it is appropriate to formally remove this Article 
from its rules.
    Removing other fractional references. The remaining text contained 
in this submission removes fractional references in other Exchange 
rules.
    None of the changes proposed in this submission effect any 
substantive change in the CHX rules or the operations of the Exchange. 
Instead, this submission confirms that the rules that the Exchange put 
in place as it began its transition to quoting in decimals continue to 
govern its operations.\3\
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    \3\ These changes were included in a rule change proposal 
submitted pursuant to section 19(b)(3)(A) of the Act, which took 
effect upon filing. See Securities Exchange Act Release No. 43256 
(September 6, 2000), 65 FR 55659 (September 14, 2000) (SR-CHX-00-
25). That proposal contained language that sought to remove 
fractional references automatically once the transition to decimal 
trading had been completed. In addition to confirming the Exchange's 
minimum trading increment, this submission recognizes that that 
automatic removal was not an available alternative and formally 
removes the fractional references from the Exchange's rules.
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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 and, 
in particular, with the requirements of Section 6(b).\4\ In particular, 
the proposed rule change is consistent with 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. 78(f)(b).
    \5\ 15 U.S.C. 78(f)(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 13386]]

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 the 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 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 at the Commission's 
Public Reference Room. Copies of such filings will also be available 
for inspection and copying at the principal office of the Exchange. All 
submissions should refer to File No. SR-CHX-2002-06 and should be 
submitted by April 12, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-6937 Filed 3-21-02; 8:45 am]
BILLING CODE 8010-01-P