[Federal Register Volume 69, Number 134 (Wednesday, July 14, 2004)]
[Notices]
[Pages 42233-42234]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-15877]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49981; File No. SR-CHX-2004-08]


Self-Regulatory Organizations; The Chicago Stock Exchange, 
Incorporated; Order Granting Approval to Proposed Rule Change and 
Amendment No. 1 To Amend the CHX Membership Dues and Fees Schedule To 
Provide a Tape Credit of 50% to Specialists Trading Tape A and Tape B 
Securities

July 7, 2004.
    On May 18, 2004, The Chicago Stock Exchange, Incorporated (``CHX'' 
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 its membership dues and fees schedule, 
effective February 1, 2004, to provide a tape credit of 50% to 
specialists trading Tape A and Tape B securities. On May 18, 2004, the 
CHX filed an amendment to the proposed rule change (``Amendment No. 
1''), which amendment completely replaced and superseded the original 
proposed rule change. The proposed rule change, as amended, was 
published for comment in the Federal Register on June 2, 2004.\3\ The 
Commission received no comments on the proposal. This order approves 
the proposed rule change, as modified by Amendment No. 1.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 49772 (May 26, 
2004), 69 FR 31147.
---------------------------------------------------------------------------

    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 \4\ and, in 
particular, the requirements of Section 6 of the Act \5\ and the rules 
and regulations thereunder. As set forth in its July 2, 2002 Order of 
Summary Abrogation (``Abrogation Order''),\6\ the Commission will 
continue to examine the issues surrounding market data fees, the 
distribution of market data rebates, and the impact of market data 
revenue sharing programs on both the accuracy of market data and on the 
regulatory functions of self-regulatory organizations. In the interim, 
the Commission believes it is reasonable to allow the CHX to provide a 
tape credit of 50% to specialists trading Tape A and Tape B securities, 
because the proposal will allow the CHX to operate a market data 
revenue-sharing program that is substantially similar to market data 
revenue-sharing programs operated by other markets.\7\
---------------------------------------------------------------------------

    \4\ 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).
    \5\ 15 U.S.C. 78f.
    \6\ Securities Exchange Act Release No. 46159 (July 2, 2002), 67 
FR 45775 (July 10, 2002) (File Nos. SR-NASD-2002-61, SR-NASD-2002-
68, SR-CSE-2002-06, and SR-PCX-2002-37) (Order of Summary 
Abrogation).
    \7\ See, e.g., Securities Exchange Act Release No. 46911 
(November 26, 2002), 67 FR 72251 (December 4, 2002) (SR-BSE-2002-
10).
---------------------------------------------------------------------------

    The Commission finds specifically that the proposed rule change 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 foster 
cooperation and coordination with persons engaged in regulating 
securities transactions, and to remove impediments to and perfect the 
mechanism of a free and open market and a national market system.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b)(5)
---------------------------------------------------------------------------

    The decision to allow the CHX to provide a 50% tape credit to 
specialists trading Tape A and Tape B securities, however, is narrowly 
drawn, and should not be construed as resolving the issues raised in 
the Abrogation Order, and does not suggest what, if any, future actions 
the Commission may take with regard to market data revenue sharing 
programs.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\9\ that the proposed rule change (SR-CHX-2004-08) be, and it hereby 
is, approved, as amended.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(2).


[[Page 42234]]


---------------------------------------------------------------------------

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-15877 Filed 7-13-04; 8:45 am]
BILLING CODE 8010-01-P