Federal Register / Vol. 72, No. 70 / Thursday, April 12, 2007 / Notices 18497 

1 15 U.S.C. 78s(b)(1) 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 55308 

(Feb. 15, 2007), 71 FR 8215. 

4The regular trading session for certain ETFs 

extends to 3:15 p.m. (Central Time). 

5See CHX Rules, Article 20, Rule 8(c)(3). All 

orders remaining in the Matching System at the end 

of the regular trading session are cancelled back to 

the firms that submitted them; firms must submit 

new orders if they seek to trade in the late trading 

session. 

6Other markets have instituted trading sessions 

that occur after the end of regular trading and that 

involve the execution of cross transactions. See, 

e.g., Boston Stock Exchange Rules, Ch. IIC 

(Extended Hours Crossing Session), Section 4 

(noting that ‘‘only matched orders are eligible for 

execution during the ETS’’); New York Stock 

Exchange 900 Series Rules ((‘‘Off-Hours Trading 

Facility Rules’’) including Rules 902 and 907 

(describing different types of coupled orders that 

can be executed during the NYSE off-hours 

sessions)). 

7See Article 20, Rule 4(b)(4)(defining a cross 

order as one that is equal to or better than the 

NBBO). 

8 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition and capital 

formation. See 15 U.S.C. 78c(f). 

9 15 U.S.C. 78f(b)(5). 

10See, e.g., Boston Stock Exchange Rules, Ch. IIC 

(Extended Hours Crossing Session), Section 4; New 

York Stock Exchange 900 Series Rules ((‘‘Off-Hours 

Trading Facility Rules’’) including Rules 902 and 

907 (describing different types of coupled orders 

that can be executed during the NYSE off-hours 

sessions)). 

11 15 U.S.C. 78s(b)(2). 

12 17 CFR 200.30–3(a)(12). 

procedures reasonably designed to 

ensure compliance by the SubAdviser(s) with the Sub-Advised Fund’s 

investment objectives, policies and 

restrictions. 

8. No Trustee or officer of the Trust, 

or director or officer of the Manager, 

will own directly or indirectly (other 

than through a pooled investment 

vehicle over which such person does 

not have control) any interest in a SubAdviser serving in reliance on the order, 

except for ownership of less than 1% of 

the outstanding securities of any class of 

equity or debt of any publicly traded 

company. 

9. The requested order will expire on 

the effective date of rule 15a–5 under 

the Act, if adopted. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–6891 Filed 4–11–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55584; File No. SR–CHX–

2006–38] 

Self-Regulatory Organizations; 

Chicago Stock Exchange, Inc.; Order 

Granting Approval to Proposed Rule 

Change to Extend the Late Trading 

Session and to Permit Only the 

Execution of Cross Orders During That 

Session 

April 5, 2007. 

I. Introduction 

On December 22, 2006, the Chicago 

Stock Exchange, Inc. (the ‘‘CHX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) 1 of the Securities Exchange Act 

(‘‘Act’’), and Rule 19b–4 thereunder,2 a 

proposed rule change (i) To extend its 

late trading session until 4:00 p.m. 

(Central Time) and (ii) to provide that 

only cross orders may be executed 

during that session. The proposed rule 

change was published for comment in 

the Federal Register on February 23, 

2007.3 The Commission received no 

comments on the proposed rule change. 

This order approves the proposed rule 

change. 

II. Description of the Proposal 

The Exchange conducts two trading 

sessions in its new trading model. The 

first session—called the regular trading 

session—is held from 8:30 a.m. (Central 

Time) to 3 p.m. (Central Time).4 The 

second trading session—called the late 

trading session—is held from the end of 

the regular session until 3:30 p.m. 

(Central Time). The Exchange’s 

Matching System begins accepting 

orders for the late trading session 

immediately after the closing of the 

regular trading session in a security.5

The proposed rule change would 

extend the Exchange’s late trading 

session by one-half hour, to 4 p.m. 

(Central Time), and confirm that only 

cross orders may be executed during the 

late trading session. The Exchange states 

that the longer trading session is 

designed to allow CHX participants to 

trade for a full hour after the normal 

close of the regular trading session. The 

Exchange further states that the crossorders-only rule simply confirms that 

CHX participants may only submit cross 

orders for execution during the late 

trading session. The Exchange believes 

that it is appropriate to limit the late 

trading session to cross orders for a 

variety of reasons—including the fact 

that doing so is consistent with the 

types of orders currently submitted by 

CHX participants during its current 

after-hours trading session. The 

Exchange also believes that this 

proposal is consistent with late trading 

sessions operated by other markets.6

As part of the proposed rule change, 

the Exchange is also proposing a change 

in its definition of ‘‘NBBO’’ to confirm 

that it applies only to protected quotes 

disseminated during regular trading 

hours. Without this change, the 

Exchange explained that a cross order in 

the late trading session technically 

would be required to be submitted at a 

price that is at or better than the NBBO 

during the late trading session (if 

markets are disseminating protected 

quotes), even though the trade-through 

provisions of Rule 611 of Regulation 

NMS do not apply during that session.7

III. Discussion 

After careful review of the proposal, 

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.8 In 

particular, the Commission finds that 

the proposal is consistent with Section 

6(b)(5) of the Act,9 which requires, 

among other things, that the rules of an 

exchange be designed to promote just 

and equitable principles of trade, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and the national market system, and, in 

general, to protect investors and the 

public interest. In making this finding, 

the Commission notes that other 

markets operate late trading sessions 

involving the execution of cross 

transactions.10

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,11 that the 

proposed rule change (SR–CHX–2006–

38) be, and hereby is, approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–6893 Filed 4–11–07; 8:45 am] 

BILLING CODE 8010–01–P 


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