[Federal Register Volume 67, Number 66 (Friday, April 5, 2002)]
[Notices]
[Pages 16481-16482]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-8208]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45661; File No. SR-CHX-2002-07]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, 
Inc. Amending the Specialist Fee Schedule for Certain Nasdaq National 
Market Securities

March 27, 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 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 amend its membership dues and fees 
schedule (``Schedule'') to provide for a specialist's exemption for 
otherwise applicable fees in the case of certain modestly-traded Nasdaq 
National Market (``NNM'') securities. The text of the proposed rule 
change is available at the principal offices of the CHX and at the 
Commission.

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 the 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. 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
    The Exchange is proposing to amend the Schedule to provide for a 
specialist's exemption from otherwise applicable fees in the case of 
certain modestly-traded NNM securities. Specifically, the proposed 
changes to the Schedule would exempt ``Exemption Eligible Securities'' 
\3\ from otherwise applicable

[[Page 16482]]

CHX fixed fees, assignment fees and application fees.
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    \3\ ``Exemption Eligible Security'' means any NNM security that 
averages fewer than 400 trades per day in the Nasdaq marketplace on 
an average daily basis during the applicable three-month measuring 
period. In the case of a NNM security assigned to a CHX specialist, 
the CHX shall make a semi-annual determination based on the most 
recent available data for the three-month period preceding the 
determination date. In the case of a NNM security that is not 
currently assigned to a CHX specialist, the CHX shall make its 
determination based on the most recent available data for the three-
month period preceding the date on which a specialist submits an 
application for assignment of the security. Any NNM security that 
has been traded in the Nasdaq marketplace for less than three months 
(or for which three months' data is unavailable) is expressly 
excluded from this definition.
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    The Exchange believes that the proposed change to the Schedule 
constitutes an appropriate means of ensuring that the Exchange 
continues to trade an appropriate number of NNM securities. For a 
variety of reasons, some specialists have deregistered from certain NNM 
securities formerly assigned to such specialists for trading on the CHX 
pursuant to unlisted trading privileges. At the same time, CHX floor 
brokers continue to receive orders for many of these ``dropped'' 
issues; such floor brokers view continued CHX trading of a wide variety 
of NNM securities to be critical to their customers and an important 
part of the Exchange's overall strategic plan. Accordingly, the CHX has 
devised the proposed fee exemption, which the CHX believes will provide 
sufficient economic incentive for specialists to continue trading a 
wide array of NNM securities.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\4\ generally, and Section 6(b)(4) of the Act \5\ in that it is 
designed to provide for the equitable allocation of reasonable dues, 
fees, and other charges among Exchange members.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The CHX does not believe that the proposed rule change will result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

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

    The foregoing rule change has become effective on filing pursuant 
to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-4(f)(2) 
thereunder,\7\ as establishing or changing a due, fee, or other charge 
paid solely by members of the CHX. At any time within 60 days of the 
filing of such 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.\8\
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(2).
    \8\ See Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C).
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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 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-2002-07 and should 
be submitted by April 26, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-8208 Filed 4-4-02; 8:45 am]
BILLING CODE 8010-01-P