[Federal Register Volume 73, Number 133 (Thursday, July 10, 2008)]
[Notices]
[Pages 39749-39751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-15639]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58087; File No. SR-CHX-2008-11]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change, as Modified By Amendment No. 1 Thereto, Relating to 
Equity-Linked Debt Securities

July 2, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the

[[Page 39750]]

``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 20, 2008, 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 and 
II below, which Items have been prepared substantially by the Exchange. 
On June 25, 2008, the Exchange submitted Amendment No. 1 to the 
proposed rule change. The Commission is publishing this notice to 
solicit comments on the proposed rule change, as amended, from 
interested persons and is granting accelerated approval to the proposed 
rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 26 under Article 22 of the CHX 
Rules (``Rule 26'') to clarify that the trading of equity-linked debt 
securities (``ELDS'') is pursuant to Rule 19b-4(e) under the Act.\3\ 
The text of the proposed rule change is available at the Exchange, the 
Commission's Public Reference Room, and http://www.chx.com.
---------------------------------------------------------------------------

    \3\ 17 CFR 240.19b-4(e).
---------------------------------------------------------------------------

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

    In its filing with the Commission, CHX included statements 
concerning the purpose of, and basis for, the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item III below. CHX 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
    CHX proposes to amend Rule 26 to clarify that the trading of ELDS 
is pursuant to Rule 19b-4(e) under the Act. Rule 26 currently provides 
for the trading of ELDS whether by listing or pursuant to unlisted 
trading privileges. This rule change would further clarify that the 
trading of ELDS is pursuant to Rule 19b-4(e) under the Act. Through 
this filing, the Exchange would change its rules to reflect this 
clarification.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\4\ in general, and furthers the 
objectives of Section 6(b)(5),\5\ in particular, in that it is designed 
to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanisms of a free and open market and 
a national market system, and, in general, to protect investors and the 
public interest, by allowing CHX to amend its rules to clarify that the 
listing and trading of ELDS is pursuant to Rule 19b-4(e) under the Act 
and to conform CHX's rules to those of other exchanges.\6\
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ See e.g., Chicago Board Options Exchange Rule 31.5(I); 
Paragraph 703.21 of the New York Stock Exchange Listed Company 
Manual; Nasdaq Rule 4420(g); and Philadelphia Stock Exchange Rule 
803(h).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

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

    No written comments were either solicited or received.

III. 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-2008-11 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-CHX-2008-11. 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, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. 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-2008-11 and should be 
submitted on or before July 31, 2008.

IV. Commission's Findings and Order Granting Accelerated Approval of 
the Proposed Rule Change

    After careful consideration, 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.\7\ In particular, the Commission finds that the proposed rule 
change is consistent with Section 6(b)(5) of the Act,\8\ which requires 
that the rules of an exchange be designed, among other things, to 
prevent fraudulent and manipulative acts and practices, 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.
---------------------------------------------------------------------------

    \7\ In approving this rule change, the Commission notes that it 
has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission finds good cause for approving this proposal before 
the 30th day after the publication of notice thereof in the Federal 
Register . The proposal seeks to clarify that the Exchange's listing 
and trading of ELDS under Rule 26 is subject to Rule 19b-4(e) under the 
Act. The Commission does not believe that this clarification raises any 
novel regulatory issues. Therefore, the Commission believes that

[[Page 39751]]

accelerating approval of this proposal is appropriate and would ensure 
that the Exchange's rules clearly reflect the standards for listing and 
trading of ELDS and conform CHX's rules to those of other exchanges 
without delay.\9\
---------------------------------------------------------------------------

    \9\ See supra, note 6.
---------------------------------------------------------------------------

V.Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change, as modified (SR-CHX-2008-11), 
be, and it hereby is, approved on an accelerated basis.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-15639 Filed 7-9-08; 8:45 am]
BILLING CODE 8010-01-P