[Federal Register Volume 68, Number 160 (Tuesday, August 19, 2003)]
[Notices]
[Pages 49828-49829]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21130]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48327; File No. SR-CHX-2003-26]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, 
Inc. Relating to Member Entry of Trade Information for Reporting and 
Dissemination

August 12, 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 August 7, 2003, the Chicago Stock Exchange, Inc. (``CHX'') filed 
with the Securities and Exchange Commission the proposed rule change as 
described in Items I, II and III below, which the CHX has prepared. The 
CHX filed the proposal pursuant to Section 19(b)(3)(A) of the Act \3\ 
and Rule 19b-4(f)(5) thereunder,\4\ 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)(5).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The CHX proposes to amend CHX Article XXI, Rule 3, which governs 
delivery of trade tickets for reporting and dissemination. The proposed 
rule change would modify the rule to give members the alternative of 
entering trade information directly, rather than having to deliver the 
trade tickets to CHX personnel. The text of the proposed rule change is 
available at the CHX and at the Commission.

[[Page 49829]]

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 CHX included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it had received regarding the proposal. The text 
of these statements may be examined at the places specified in Item IV 
below. The CHX has prepared summaries, set forth in sections A, B, and 
C below, of the most significant aspects of those statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    CHX Article XXI, Rule 3 governs delivery of trade tickets for 
reporting and dissemination. The rule currently permits trades executed 
on the CHX floor to be reported in two ways: (1) Executions initiated 
through the CHX's MAX[reg] system are automatically reported to the CHX 
for dissemination; and (2) other executions that occur on the trading 
floor must be written on a ticket and delivered to CHX personnel for 
entry into the CHX's systems. The proposed rule change would amend CHX 
Article XXI, Rule 3 to give members the alternative of entering trade 
information themselves, using technological enhancements that the CHX 
has approved, rather than delivering the trade tickets to CHX personnel 
for entry.
    The CHX believes that the proposed rule change would modernize the 
rule by enabling a CHX member to report a transaction by inputting the 
trade information into a CHX-approved system. As an initial matter, 
this proposal would allow CHX floor brokers to enter trades themselves 
via the BrokerplexTM stations that the CHX has provided to 
them.\5\ In the future, the CHX may develop additional technological 
enhancements that permit other CHX floor members to report transactions 
in a more automated manner.\6\ In short, the proposed rule change makes 
it clear that CHX members may make use of this new technology to enter 
information about a transaction directly for dissemination to the 
market.
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    \5\ The Brokerplex system is a front-end system that allows a 
floor broker to keep an automated record of his or her orders. It is 
not an order execution system, although it can send orders to the 
CHX's MAX system for execution in accordance with applicable order 
execution rules.
    \6\ The CHX states that the development of these additional 
technologies is not currently a significant systems priority.
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2. Statutory Basis
    The CHX believes the proposal is consistent with the requirements 
of the Act and the rules and regulations thereunder that are applicable 
to a national securities exchange, and, in particular, with the 
requirements of Section 6(b).\7\ The CHX believes the proposal is 
consistent with Section 6(b)(5) of the Act \8\ in that it is designed 
to promote just and equitable principles of trade, 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.
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    \7\ 15 U.S.C. 78(f)(b).
    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement of Burden on Competition

    The CHX does not believe that the proposed rule change will impose 
any inappropriate burden on competition.

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

    The CHX neither solicited nor received written comments with 
respect to this proposal.

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

    The proposed rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(5) thereunder \10\ because 
it constitutes a change in an existing order-entry or trading system of 
a self-regulatory organization that (i) does not significantly affect 
the protection of investors or the public interest; (ii) does not 
impose any significant burden on competition; and (iii) does not have 
the effect of limiting access to or availability of the system. At any 
time within 60 days after the filing of the proposed rule change, the 
Commission may summarily abrogate the 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)(5).
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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 proposal 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-2003-26 and should be 
submitted by September 9, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-21130 Filed 8-18-03; 8:45 am]
BILLING CODE 8010-01-P