[Federal Register Volume 75, Number 48 (Friday, March 12, 2010)]
[Notices]
[Pages 11953-11954]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-5298]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61656; File No. SR-CHX-2010-04]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange,
Inc. To Aggregate Trading Activity of Affiliated Participants To
Calculate Average Daily Trading Volume for Billing Purposes
March 5, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on February 26, 2010, the Chicago Stock Exchange, Inc. (``CHX'' or
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the Exchange. CHX has
filed the proposal pursuant to Section 19(b)(3)(A) of the Act \3\ and
Rule 19b-4(f)(2) thereunder,\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 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).
\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 Schedule of Participant Fees and
Assessments (the ``Fee Schedule''), effective March 1, 2010, to
aggregate the activity of affiliate entities when computing and
assessing certain fees of the Exchange. The text of this proposed rule
change is available on the Exchange's Web site at http://www.chx.com/rules/proposed_rules.htm and in the Commission's Public Reference
Room, 100 F Street, NE., Washington, DC 20549.
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 changes and
discussed any comments it received regarding the proposal. The text of
these statements may be examined at the places specified in Item IV
below. The 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
Through this filing, the Exchange would amend its Fee Schedule,
effective March 1, 2010, to permit the aggregation of the trading
activity of affiliated CHX Participants for the purposes of calculating
and assessing certain fees. A Participant must request the aggregation
of affiliate activity by submitting an Application to the Exchange.\5\
The Exchange shall have the right to request additional information in
order to verify the affiliate status of an entity.
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\5\ The Exchange will post the Application form on its public
Web site.
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Once approved, the Exchange will aggregate the activity of
affiliated
[[Page 11954]]
Participants for the calculation of its Matching System Port Charges
under to Section D of its Fee Schedule and its Transaction Fees for
single-sided orders under to Section E.1. of its Fee Schedule. Pursuant
to Section D, the Exchange normally charges a fee for each ``port'' or
logical network connection to the CHX network. Port charges are not
assessed for connections to the Matching System for a month in which a
Participant Firm executes an average daily volume of 5 million or more
provide shares in the Matching System during the month. Pursuant to
Section E.1. of the Fee Schedule, Participants pay fees and receive
rebates for trades executed in our Matching System whenever they take
or provide liquidity, respectively. The amount of those fees and
rebates vary depending on whether the Participant executes an average
daily volume in excess of 500,000 or 5 million provide shares.
The current proposal would permit two or more Participants which
are ``affiliates,'' as defined, to aggregate their trade volume for
purposes of these fee computations. An ``affiliate'' of a Participant
is defined as any wholly owned subsidiary, parent or sister of the
Participant that is also a Participant. A ``wholly owned subsidiary''
is defined as a subsidiary of a Participant, 100% of whose voting stock
or comparable ownership interest is owned by the Participant, either
directly or indirectly through other wholly owned subsidiaries. A
``parent'' is defined as an entity that directly or indirectly owns
100% of the voting stock or comparable ownership interest of a
Participant. A ``sister'' is defined as an entity, 100% of whose voting
stock or comparable ownership interest is owned by a parent that also
owns 100% of the voting stock or comparable ownership interest of a
Participant.
As noted above, a Participant must apply for this treatment on
behalf of itself and its affiliate(s). The applicant would be
responsible for immediately notifying the Exchange if the status of any
of the affiliated entities changed at some point in the future. For
example, if a Participant had applied for and been approved to
aggregate the trading volume of itself and a sister company and their
common parent company later sold the sister company to an unaffiliated
third party, then the Participant must immediately notify the Exchange
that the two companies are no longer affiliated. Finally, the Exchange
is only obligated to aggregate the volume of affiliates each of which
are Participants holding a trading permit. The trading volume of
entities which are not Exchange Participants will not be aggregated
with that of Participants, even if the two entities are affiliates as
defined.
The Exchange proposes to implement the aggregation policy effective
March 1, 2010.
2. Statutory Basis
The Exchange 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)(4) of the Act \7\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among its members. Among other things, the Exchange
believes that the aggregation policy fairly allows affiliated
Participants to combine their trading volumes for purpose of certain
fee calculations and may, as a result, induce such firms to send
additional orders to the Exchange for execution.
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\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(4)
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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. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \8\ and subparagraph (f)(2) of Rule 19b-4
thereunder \9\ because it establishes or changes a due, fee, or other
charge applicable only to a member imposed by the self-regulatory
organization. Accordingly, the proposal is effective upon Commission
receipt of the filing. At any time within 60 days of the filing of such
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.
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\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 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-2010-04 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-CHX-2010-04. 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 Web site viewing and
printing in the Commission's Public Reference Room on official business
days between the hours of 10 a.m. and 3 p.m. Copies of such 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-
2010-04 and should be submitted on or before April 2, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-5298 Filed 3-11-10; 8:45 am]
BILLING CODE 8011-01-P