[Federal Register Volume 69, Number 93 (Thursday, May 13, 2004)]
[Notices]
[Pages 26629-26630]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-10847]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49658; File No. SR-CHX-2004-13]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of a Proposed Rule Change and Amendment No. 1 Thereto by 
the Chicago Stock Exchange, Inc. To Set Fees for Member Firms' Use of 
Enhanced Electronic Communications Retention System

May 6, 2004.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice hereby is given that 
on April 1, 2004, 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. On April 
29, 2004, the Exchange filed an amendment to the proposed rule 
change.\3\ The CHX has designated this proposal as one establishing or 
changing a due, fee, or other charge imposed by the CHX under section 
19(b)(3)(A)(ii) of the Act,\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, as amended, 
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Ellen Neely, Senior Vice President and 
General Counsel, CHX, to Nancy J. Sanow, Assistant Director, 
Division of Market Regulation, Commission, dated April 28, 2004 
(``Amendment No. 1''). Amendment No. 1 replaces and supersedes the 
original proposed rule change in its entirety. For purposes of 
calculating the 60-day abrogation period, the Commission considers 
the period to have commenced on April 29, 2004, the date the CHX 
filed Amendment No. 1. See Section 19(b)(3)(C) of the Act, 15 U.S.C. 
78s(b)(3)(C).
    \4\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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 ``Fee Schedule'') to charge member firms the costs 
associated with each firm's use of the Exchange's enhanced e-mail and 
instant messaging retention system. The text of the proposed rule 
change is available at the Commission and the CHX.

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.

[[Page 26630]]

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

1. Purpose
    The Exchange is implementing an enhanced e-mail and instant 
messaging retention system that will be used to retain messages of its 
on-floor members who use e-mail and instant messaging functionalities 
provided or supported by the Exchange. This retention system is 
designed to help the Exchange's members better meet their record 
retention obligations and can be used by the Exchange to conduct 
reviews of member e-mail and instant messaging correspondence.
    The proposed rule change would charge member firms the costs 
associated with each firm's use of the retention system.\5\ 
Specifically, the proposal would bill firms a monthly fee of $25 per 
mailbox and would impose additional charges if the members request off-
line optical disks so that they can have a copy of the electronic 
correspondence captured by the Exchange.\6\ These additional fees would 
be $200 for each 5.2GB optical disk and $300 for each 9.1GB optical 
disk.
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    \5\ The Exchange currently does not charge its members for any 
e-mail or instant messaging services.
    \6\ The system is designed to give member firm compliance staff 
on-line access to retained messages; this optical disk fee will only 
apply if a firm requests an off-line copy of the messages.
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    These fee changes take effect immediately and will be billed to 
firms when the enhanced e-mail retention system is activated for their 
on-floor members.
2. Statutory Basis
    The Exchange believes the proposal is consistent with Section 6(b) 
of the Act,\7\ in general and Section 6(b)(4) of the Act,\8\ in 
particular, in that it provides for the equitable allocation of 
reasonable dues, fees and other charges among its members.
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    \7\ 15 U.S.C. 78f(b)
    \8\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement of Burden on Competition

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

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

    No written comments were either solicited or received with respect 
to the proposed rule change.

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)(ii) of the Act,\9\ and Rule 19b-4(f)(2) \10\ thereunder, 
because it establishes or changes a due, fee or other charge imposed by 
the Exchange. 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)(ii).
    \10\ 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 is consistent with the Act. Comments may be submitted by any of 
the following methods:
    Electronic comments:
     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-CHX-2004-13 on the subject line.
    Paper comments:
     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-CHX-2004-13. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 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 Section, 450 Fifth 
Street, NW., Washington, DC 20549-0609. Copies of such filing also will 
be available for inspection and copying at the principal office of the 
CHX. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-CHX-
2004-13 and should be submitted on or before June 3, 2004.

    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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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 04-10847 Filed 5-12-04; 8:45 am]
BILLING CODE 8010-01-P