[Federal Register Volume 67, Number 147 (Wednesday, July 31, 2002)]
[Notices]
[Pages 49726-49727]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-19313]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46255; File No. SR-CHX-2002-21]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, 
Inc. Relating to Membership Dues and Fees

July 25, 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 July 1, 2002, the Chicago Stock Exchange, Incorporated (``CHX'' or 
the ``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 (the ``Schedule'') to include a new tape credit for lead 
market makers in cabinet securities. The text of the proposed rule 
change follows. Proposed new language is in italic.

Membership Dues and Fees

A.-L. No change to text.
M. Credits
1. Specialist Credits
No change to text.
2. Floor Broker Credits
No change to text.
3. Credits for Qualified Market Makers Registered in Cabinet Securities 
Effective July 1, 2002, total monthly fees owed by a market maker 
registered in a cabinet security will be reduced (and qualified market 
makers will be paid each month for any unused credits) by a Transaction 
Credit. ``Transaction Credit'' when used in connection with a credit 
for a Qualified Market Maker registered in a cabinet security means 18% 
of the monthly CHX tape revenue from the Consolidated Tape Association 
generated by the security in which the market maker is registered. To 
the extent that CHX tape revenue is subject to a year-end adjustment, 
market maker credits may be adjusted accordingly. ``Qualified Market 
Maker'' means a lead market maker who is registered as such in 100 or 
more cabinet securities.
N. 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 Exchange 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 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 amend the Schedule to include a new tape 
credit for lead market makers in cabinet securities. Under Article 
XXXIV of the Exchange's Rules, a market maker can be appointed to 
disseminate continuous two-sided quotations in issues that are not 
assigned to a specialist firm.\3\ The first market maker to assume that 
role in a particular issue is considered the ``lead'' or ``primary'' 
market marker.\4\ Issues in which a lead market maker disseminates a 
continuous two-sided market are often traded by the Exchange's floor 
brokers, but are not traded through the Exchange's MAX 
system, its automated order routing and execution system.
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    \3\ Article XXXIV, Rule 3, Interpretation .02.
    \4\ Article XXXIV, Rule 3, Interpretation .02(6).
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    The Exchange has proposed this rule change to reward lead market 
makers who undertake that role for a significant number of cabinet 
securities by implementing an 18% tape credit with respect to those 
issues.

[[Page 49727]]

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act,\5\ in general, and furthers the objectives of 
Section 6(b)(4),\6\ in particular, in that it provides for equitable 
allocation of reasonable dues, fees and other charges among its 
members.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

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

    The foregoing rule change establishes or changes a due, fee, or 
other charge and, therefore, has become effective pursuant to Section 
19(b)(3)(A) of the Act \7\ and subparagraph (f)(2) of Rule 19b-4 
thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(e)(2).
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    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.

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. 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 the File No. SR-CHX-2002-21 and 
should be submitted by August 21, 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. 02-19313 Filed 7-30-02; 8:45 am]
BILLING CODE 8010-01-P