[Federal Register Volume 68, Number 65 (Friday, April 4, 2003)]
[Notices]
[Pages 16594-16595]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-8183]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47596; File No. SR-CSE-2003-03]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Cincinnati Stock Exchange, 
Inc., To Extend its Liquidity Provider Fee and Rebate Pilot Program

March 28, 2003.
    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 27, 2003, 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 the Exchange. The 
Exchange has filed this proposal pursuant to section 19(b)(3)(A) of the 
Act \3\ and rule 19b-4(f)(6)\4\ thereunder, which renders the proposal 
effective upon filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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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 its pilot program for the Liquidity 
Provider Fee and Rebate (``Program'') through September 30, 2003. The 
Program, as originally proposed in SR-CSE-2002-16,\5\ is set to expire 
on March 31, 2003. The CSE proposes no substantive changes to the 
Program, other than extending its operation through September 30, 2003. 
The text of the proposed rule change is available at the CSE and at the 
Commission.
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    \5\ Securities Exchange Act Release No. 46848 (November 19, 
2002), 67 FR 70793 (November 26, 2002).
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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 CSE proposes to extend the Program through September 30, 2003. 
Under the Program, the Exchange amended CSE rule 11.10A(g)(1) by adding 
subparagraph (B) to charge the liquidity taker, i.e., the party 
executing against a previously displayed quote/order, $0.004 per share. 
The Exchange then passes on to the liquidity provider, i.e., the party 
providing the displayed quote/order, $0.003 per share, with the 
Exchange retaining $0.001 per share.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
section 6(b) of the Act \6\ in general, and furthers the objectives of 
section 6(b)(5)\7\ 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, generally, in that it protects investors and the public 
interest. The CSE believes that the proposed rule change is also 
consistent with section 6(b)(4) of the Act,\8\ in that it is designed 
to provide for the equitable allocation of reasonable dues, fees, and 
other charges among CSE members by crediting members on a pro rata 
basis.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ 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 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 solicited or received in connection with 
the proposed rule change.

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

    Because the foregoing proposed rule change does not:
    (i) significantly affect the protection of investors or the public 
interest;
    (ii) impose any significant burden on competition; and
    (iii) become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to section 19(b)(3)(A) of the Act \9\ and 
rule 19b-4(f)(6)\10\ thereunder. 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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    The Exchange has requested that the Commission waive the 30-day 
operative delay. The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of

[[Page 16595]]

investors and the public interest. Acceleration of the operative date 
will allow the pilot to continue without interruption. For these 
reasons, the Commission designates the proposal to be effective and 
operative upon filing with the Commission.\11\
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    \11\ For purposes only of accelerating the operative date of the 
proposed rule change, the Commission has considered the proposed 
rule's impact on efficiency, competition, and capital formation. 15 
U.S.C. 78c(f).
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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 
Exchange. All submissions should refer to file number SR-CSE-2003-03 
and should be submitted by April 25, 2003.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-8183 Filed 4-3-03; 8:45 am]
BILLING CODE 8010-01-P