[Federal Register Volume 68, Number 77 (Tuesday, April 22, 2003)]
[Notices]
[Pages 19874-19875]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-9884]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47680; File No. SR-CHX-2003-10]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by 
the Chicago Stock Exchange, Inc. To Amend Its Membership Dues and Fees 
Schedule To Confirm the Amount of Consolidated Tape Association Credits 
Available to Its Members

April 15, 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 31, 2003, 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 
Exchange filed the proposal pursuant to Section 19(b)(3)(A) of the 
Act,\3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission. The Exchange amended the 
proposal on April 14, 2003.\5\ The Commission is publishing this notice 
to solicit comments on the proposed rule change, as amended, 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)(2).
    \5\ See letter from Ellen J. Neely, Senior Vice President and 
General Counsel, CHX, to Joseph P. Morra, Special Counsel, Division 
of Market Regulation, Commission, dated April 10, 2003 (``Amendment 
No. 1''). In Amendment No. 1, the Exchange submitted a revised 
Exhibit A, which replaced in its entirety, the Exhibit A submitted 
with the initial filing. Specifically, in the revised Exhibit A, the 
Exchange made technical corrections to the proposed rule text 
contained in the Exhibit A submitted with the initial filing. For 
purposes of calculating the 60-day abrogation period, the Commission 
considers the period to have commenced on April 14, 2003, the date 
the Exchange filed Amendment No. 1. 15 U.S.C. 78s(b)(3)(C).
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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 confirm the amount of Consolidated Tape 
Association (``CTA'') credits available to members. The text of the 
proposed rule change is available upon request from the Office of the 
Secretary, the Commission, and the Exchange.

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 purpose of the proposed change to the Schedule is to clarify 
the amount of CTA credits available to CHX member firms. The Exchange, 
like other national

[[Page 19875]]

securities exchanges, receives CTA revenue from transactions in listed 
securities under the terms of the CTA Plan (``Plan''). In past years, 
the Securities Industry Automation Corporation (``SIAC''), which 
administers the collection and distribution of market data under the 
Plan, and the Plan Administrators, which administer, among other 
things, the accompanying revenue distribution to Plan participants, 
worked together so that all of the Plan costs were deducted from the 
total tape revenue pool, with each Plan participant then receiving the 
remaining portion of the revenues allocable to that participant. These 
methods are now changing and, beginning in 2003, the Plan 
Administrators will divide up the total revenue pool according to the 
Plan's terms and distribute the allocable revenues to each participant 
(less the Administrators' costs), and SIAC will then bill each 
participant for its portion of the SIAC costs.
    The Exchange proposes to amend to its Schedule to ensure that the 
change in Plan billing methods does not have an inadvertent impact on 
the current method for providing tape-based credits to the Exchange's 
specialists, floor brokers and lead market makers. The Exchange's 
Schedule currently provides, for example, that the credits available to 
specialists are based on the ``applicable percentage of CHX tape 
revenue from the Consolidated Tape Association generated by a 
particular stock.'' The Exchange proposes to amend this text--and the 
text describing the Exchange's other tape credit programs--that 
confirms that the revenues shared with Exchange members are those 
calculated after the deduction of Plan costs.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(4) of the Act \6\ in that it provides for the 
equitable allocation of reasonable dues, fees and other charges among 
its members.
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    \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 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

    The Exchange has not solicited or received any written comments on 
this proposal.

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 
charge imposed by the Exchange and, therefore, has become effective 
upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act \7\ and Rule 
19b-4(f)(2) thereunder.\8\ 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 purpose of the Act.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 17 CFR 240.19b-4(f)(2).
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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, as amended, 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 
filing will also be available for inspection and copying at the 
principal office of the Exchange. All submissions should refer to File 
No. SR-CHX-2003-10 and should be submitted by May 13, 2003.

    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. 03-9884 Filed 4-21-03; 8:45 am]
BILLING CODE 8010-01-P