[Federal Register Volume 67, Number 131 (Tuesday, July 9, 2002)]
[Notices]
[Pages 45576-45577]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-17130]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46147; File No. SR-CSE-2002-06]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Cincinnati Stock Exchange, 
Inc. Extending a Pilot Revenue Sharing Program for Trading in Nasdaq 
National Market Securities

June 28, 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 June 28, 2002, the Cincinnati Stock Exchange, Inc. (``CSE'' 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 CSE. 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 extend a pilot related to a fee schedule 
for transactions in Nasdaq National Market securities (``Nasdaq NM 
Securities'') and to establish a revenue sharing program to reflect 
recent developments in competitive business strategy. The text of the 
proposed rule change is below. Additions are in italics, and deletions 
are in brackets.
    Chapter XI
    Trading Rules
    Rule 11.10  National Securities Trading System Fees
    A. Trading Fees (No Change to Text)
* * * * *
    (e)(1) (No Change to Text)
    (2) Tape ``C'' Transactions. Tape ``C'' Transactions are defined as 
transactions conducted in Nasdaq securities pursuant to unlisted 
trading privileges (``UTP''). Members will be charged a per share fee 
for Nasdaq securities based upon the following schedule:

------------------------------------------------------------------------
      Number of Shares Traded (In a single day)          Fee Per Share
------------------------------------------------------------------------
0-5 million..........................................             $0.001
5 million one plus+..................................          $0.000025
------------------------------------------------------------------------

* * * * *
    (l) [Tape ``C'' Transactions. Tape ``C'' Transactions are defined 
as transactions conducted in Nasdaq securities pursuant to unlisted 
trading privileges (``UTP''). Members will be charged $.001 per share 
per side ($1.00/1000 shares), with a maximum charge of $37.50 per firm 
per side, for Tape C Transactions.]
    [Tape ``C'' Transaction Credit. Members will receive a 75 percent 
pro rata credit on revenue generated by transactions in Tape ``C'' 
securities.
    [(l)](m)  (No Change in Text)
    [(m)](n)  (No Change in Text)
    [(n)](o)  (No change in Text)
    [(o)](p)  (No change to text).
    [(p)](q)  (No change to text)
* * * * *

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 CSE 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. CSE has prepared summaries, set forth in Sections A, B, 
and C below, of the most significant aspects of such statements.

[[Page 45577]]

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 extend the pilot revenue sharing 
program filed for immediate effectiveness on March 25, 2002.\3\ Under 
the CSE's program for trading Nasdaq NM securities, member firms will 
receive a 75 percent revenue (75%) pro rata transaction credit on all 
Nasdaq Tape C market data revenue generated by member trading activity. 
The pilot program will expire August 30, 2002, if not renewed.
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    \3\ Securities Exchange Act Release No. 45642 (March 26, 2002), 
67 FR 15436 (April 1, 2002) (File No. SR-CSE-2002-03).
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\4\ generally, and section 6(b)(5) of the Act,\5\ in particular, 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. The proposal also is consistent with 
Section 6(b)(4) of the Act \6\ in that it is designed to provide for 
the equitable allocation of reasonable dues, fees, and other charges 
among Exchange members by crediting CSE members on a pro rata basis.
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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)(4).
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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 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 \7\ and Rule 19b-4(f)(2) 
thereunder,\8\ as establishing or changing a due, fee, or other charge 
paid solely by members of the CSE. 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.\9\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(2).
    \9\ 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 
CSE. All submissions should refer to File No. SR-CSE-2002-06 and should 
be submitted by July 30, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 02-17130 Filed 7-8-02; 8:45 am]
BILLING CODE 8010-01-P