[Federal Register Volume 68, Number 230 (Monday, December 1, 2003)]
[Notices]
[Page 67249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-29801]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48817; File No. SR-CSE-2003-10]


Self-Regulatory Organizations; The Cincinnati Stock Exchange, 
Inc.; Order Granting Approval of Proposed Rule Change by The Cincinnati 
Stock Exchange, Inc. To Eliminate Market Order Exposure Requirements

November 21, 2003.

I. Introduction

    On August 7, 2003, The Cincinnati Stock Exchange, Inc. (``CSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'')\1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend CSE Rule 11.9(u) to eliminate 
Interpretation .01, concerning market order exposure requirements 
(``Market Order Exposure Requirement'').\3\ The proposed rule change 
would also amend CSE Rule 8.15 to remove a reference to Interpretation 
.01 of Rule 11.9(u). The proposed rule change was published for comment 
in the Federal Register on September 19, 2003.\4\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The CSE has represented that the Commission's approval of 
the proposed rule change will constitute the repeal of the 
interpretations and policies with respect to the Market Order 
Exposure Requirement set forth in CSE Regulatory Circulars 01-07, 
99-03, 98-06, 97-07, 96-04.
    \4\ Securities Exchange Act Release No. 48491 (September 12, 
2003), 68 FR 54924.
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    The Commission received no comments on the proposal. This order 
approves the proposed rule change.

II. Discussion and Commission Findings

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\5\ In 
particular, the Commission believes that 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 prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, 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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    \5\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Commission finds that the proposed rule change is reasonably 
designed to accomplish these ends because the elimination of the CSE's 
Market Order Exposure Requirement is consistent with the narrowing of 
spreads since the advent of decimal pricing. The Commission notes, and 
the CSE acknowledges, that the best execution responsibilities of 
preferencing designated dealers will continue to apply. Moreover, the 
proposed rule change is the second of two filings intended by the CSE 
to codify existing CSE practices set forth in various regulatory 
circulars \8\ and conform its rules to industry standards.\9\ The 
Commission notes that, while it is approving the proposed rule change 
at the present time, the Commission makes no determination as to 
whether it would have approved the proposed rule change had it been 
filed at the time that the regulatory circulars setting forth the CSE's 
practices with respect to the Market Order Exposure Requirement were 
issued.
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    \8\ See supra note 3.
    \9\ See also Securities Exchange Act Release No. 48388 (August 
21, 2003), 68 FR 51820 (August 28, 2003) (SR-CSE-2003-09).
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III. Conclusion

    It Is Therefore Ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-CSE-2003-10), be, and it 
hereby is, approved.
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    \10\ 15 U.S.C. 78(b)(2).

    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).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-29801 Filed 11-28-03; 8:45 am]
BILLING CODE 8010-01-P