[Federal Register Volume 69, Number 222 (Thursday, November 18, 2004)]
[Notices]
[Pages 67615-67617]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3248]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50657; File No. SR-CHX-2004-34]


Self-Regulatory Organizations; Chicago Stock Exchange 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to Membership Dues and Fees

November 12, 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 September 28, 2004, the Chicago Stock Exchange, Incorporated 
(``CHX'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
items I and II below, which items have been prepared by the Exchange. 
The Exchange filed the proposed rule change pursuant to section 
19(b)(3)(A)(ii) of the Act,\3\ and Rule 19b-4(f)(2) thereunder,\4\ as 
establishing or changing a due, fee, or other charge, 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)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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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 its membership dues and fees schedule 
(``Fee Schedule'') to eliminate the specialist application fee and 
suspend through December 31, 2004, specialist

[[Page 67616]]

assignment fees when dual trading system securities are assigned to 
specialist firms without competition. Proposed new language is 
italicized; deletions are [bracketed].

Membership Dues and Fees

    A.-C. No change to text.
    D. Specialist Assignment Fees
    Specialist Application Fee: $150 per application, provided, 
however, that there will be no application fee for [NASDAQ/NM 
Securities] securities that are assigned without competition.
    Assignment of Dual Trading: Once the Committee on Specialist System 
Securities Assignment and Evaluation approves a member organization to 
act as specialist in a security, that member organization must pay the 
following fee:
    No charge through December 31, 2004. $350 effective January 1, 
2005. If the security was assigned without competition.
* * * * *

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 received regarding 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
    In August 2004, the Exchange's Board of Governors decided to 
eliminate the application and assignment fees charged to specialist 
firms that seek to trade a Nasdaq/NM security when that security is 
assigned without competition.\5\ The Exchange now proposes to similarly 
eliminate the application fee charged to specialist firms that seek to 
trade a dual trading system security, when the security is assigned 
without competition. The Exchange also proposes to suspend, through 
December 31, 2004, the assignment fees charged to those firms when dual 
trading system securities are assigned without competition.\6\
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    \5\ The Exchange decided to continue to charge specialist 
assignment fees with respect to securities that are assigned to a 
specialist firm in competition with other firms, reflecting the 
increased administrative costs associated with allocating stocks in 
competition. See Securities Exchange Act Release No. 50616 (November 
1, 2004).
    \6\ Under the Exchange's rules, dual trading system securities 
are securities listed on the New York Stock Exchange, the American 
Stock Exchange or on markets other than the Nasdaq Stock Market, 
Inc.
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    The CHX represents that these proposed changes, like the similar 
proposal to modify these fees for specialists that trade Nasdaq/NM 
securities,\7\ are designed to encourage specialist firms to trade 
additional securities by allowing them to do so without absorbing 
additional costs. The Exchange believes that these changes to the Fee 
Schedule provide specialists with an appropriate incentive to increase 
the number of issues they trade (consistent with their duties as 
specialists), which could allow the Exchange's members to offer their 
customers access to a wider array of specialist-traded securities. The 
Exchange has proposed to suspend the assignment fee for issues assigned 
without competition only through the end of the year to determine, 
among other things, whether the fee suspension has the intended effect. 
These fee changes became effective on October 1, 2004.
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    \7\ See supra, note 5.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\8\ in general, and furthers the 
objectives of section 6(b)(4) of the Act,\9\ in particular, in that it 
provides for the equitable allocation of reasonable dues, fees and 
other charges among its members.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78(f)(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 not necessary or appropriate in 
furtherance of the purposes of the Act.

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.

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 \10\ and Rule 19b-4(f)(2) thereunder,\11\ 
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 purpose of the Act.\12\
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
    \12\ Id.
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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-2004-34 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-2004-34. 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 Room. Copies of such 
filing also will be available for inspection and copying at the 
principal offices of the CHX. All comments received will be posted 
without change; the Commission does not edit personal identifying

[[Page 67617]]

information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-CHX-2004-34 and should be submitted on or before 
December 9, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
 [FR Doc. E4-3248 Filed 11-17-04; 8:45 am]
BILLING CODE 8010-01-P