26660 Federal Register / Vol. 72, No. 90 / Thursday, May 10, 2007 / Notices 

submitted to the SEC in a rule filing pursuant to 

Section 19(b)(3)(A) of the Exchange Act.’’ Rule 

8.3A.01(c). 

7 15 U.S.C. 78(f)(B). 

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

9 15 U.S.C. 78s(b)(3)(A)(i). 

10 17 CFR 240.19b–4(f)(1). 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Amendment No. 1. The Commission 

considers the 60-abrogation period to have 

commenced on May 1, 2007, the date the CHX filed 

Amendment No. 1. 

4 15 U.S.C. 78s(b)(3)(A)(ii). 

5 17 CFR 240.19b–4(f)(2). 

effect of an increase in the CQL is 

procompetitive in that it increases the 

number of market participants that may 

quote electronically in a product. The 

purpose of this filing is to increase the 

CQL in International Securities 

Exchange (‘‘ISE’’) from its current limit 

of 25 to 40. The trading volume in ISE 

recently has increased substantially. 

Increasing the CQL in ISE will enable 

the Exchange to enhance the liquidity 

offered, thereby offering deeper and 

more liquid markets. 

2. Statutory Basis 

CBOE believes the proposed rule 

change is consistent with the Act and 

the rules and regulations under the Act 

applicable to a national securities 

exchange and, in particular, the 

requirements of section 6(b) of the Act.7

Specifically, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 8 requirements that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts and, in general, to 

protect investors and the public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE 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 

The Exchange neither received nor 

solicited written comments on the 

proposal. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing proposed rule change 

will take effect upon filing with the 

Commission pursuant to Section 

19(b)(3)(A)(i) of the Act 9 and Rule 19b–

4(f)(1) thereunder,10 because it 

constitutes a stated policy, practice, or 

interpretation with respect to the 

meaning, administration, or 

enforcement of an existing rule. 

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 

purposes of the Act. 

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 rulecomments@sec.gov. Please include File 

Number SR–CBOE–2007–42 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2007–42. 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 office of the CBOE. 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–CBOE–2007–42 and should 

be submitted on or before May 31, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–8958 Filed 5–9–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55705; File No. SR–CHX–

2007–05[ 

Self-Regulatory Organizations; 

Chicago Stock Exchange, Inc.; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change and 

Amendment No. 1 Thereto, Relating to 

Participant Fees and Credits 

May 4, 2007. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on March 23, 

2007, 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, II, and 

III below, which Items have been 

prepared substantially by the CHX. The 

CHX amended the proposed rule change 

on May 1, 2007.3 The CHX has 

designated this proposal as one 

establishing or changing a member due, 

fee, or other charge imposed by the CHX 

under Section 19(b)(3)(A)(ii) of the Act,4

and Rule 19b–4(f)(2) thereunder,5 which 

renders the proposal effective upon 

filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change, as amended, from interested 

persons. 

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 Credits 

(‘‘Fee Schedule’’), effective April 1, 

2007, to (1) assess a single ‘‘take’’ fee 

and provide a single ‘‘provide’’ credit 

for Matching System transactions in all 

securities; (2) eliminate the provisions 

relating to sharing of market data; and 

(3) modify the Matching System routing 

fees for executions through the Reg 


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Federal Register / Vol. 72, No. 90 / Thursday, May 10, 2007 / Notices 26661 

6See Release No. 34–55160 (January 24, 2007), 72 

FR 4202 (January 30, 2007) (File No. S7–10–04) 

(confirming that the compliance date for the market 

data revenue allocation amendment remains April 

1, 2007). 

7See Reg NMS Final Rule Release, No. 34–51808, 

File No. S7–10–04, 70 FR 37496 (June 29, 2005), 

Section XIV (Text of Adopted Amendments to the 

CTA Plan, the CQ Plan and the Nasdaq UTP Plan). 

8 In addition, even if the Exchange believed it was 

appropriate to share revenue under the new 

allocation, the Exchange will not receive sufficient 

information from the securities information 

processors to readily calculate the amount of 

revenue that might be shared in connection with a 

specific quote or trade. 

9See Securities Exchange Act Release No. 55395 

(March 2, 2007), 72 FR 11067 (March 12, 2007) (SR–

CBOE–2007–25) (setting new transaction fees for 

the CBOE Stock Exchange). 

10These costs include the costs associated with 

maintaining an omnibus clearing account for 

Linkage Plan transactions with the National 

Securities Clearing Corporation. 

11 15 U.S.C. 78f(b)(4). 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 19b–4(f)(2). 

NMS Linkage Plan. The text of the 

proposed rule change is available at the 

CHX, the Commission’s Public 

Reference Room, and the CHX’s Web 

site at http://www.chx.com/rules/ 

proposed_rules.htm. 

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 on the proposed 

rule change. 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 

The CHX proposes to amend its Fee 

Schedule, effective April 1, 2007, to (1) 

assess a single ‘‘take’’ fee and provide a 

single ‘‘provide’’ credit for Matching 

System transactions in all securities; (2) 

eliminate the provisions relating to 

sharing of market data revenues; and (3) 

modify the Matching System routing 

fees for executions through the Reg 

NMS Linkage Plan. 

On April 1, 2007, the new market data 

revenue allocation formula that is part 

of Regulation NMS takes effect.6 This 

new formula significantly modifies the 

manner in which market data revenue is 

allocated among the self-regulatory 

organizations that participate in the 

plans associated with the dissemination 

of market data. Among other things, the 

new formula allocates revenue among 

the securities in each plan based (in 

most cases) on the square root of the 

dollar volume of trading in each 

security; allocates revenue based upon 

both quotes and trades in each security; 

and limits the amount of revenue 

associated with trades with dollar 

volumes less than $5,000.7 The 

Exchange believes that it is appropriate 

to gain some experience with the impact 

of this new revenue sharing formula 

before determining whether it is 

appropriate to share a portion of that 

revenue with Exchange participants.8

As a result, effective April 1, 2007, the 

Exchange proposes to eliminate the 

market data revenue credits set out in its 

Fee Schedule. 

At the same time, however, the 

Exchange would slightly increase its 

‘‘take’’ fees and more significantly 

increase the ‘‘provide’’ credits for 

transactions that occur within the CHX’s 

Matching System. Under these changes, 

the CHX would charge a ‘‘take’’ fee of 

$.0029/share and pay a ‘‘provide’’ credit 

of $.0026/share. These changes are 

designed, at least in part, to provide an 

incentive for participants to submit 

single-sided orders to the Matching 

System for execution. 

As a final portion of this proposed 

rule change, the Exchange would 

modify the routing fees associated with 

the use of the Linkage Plan’s routing 

mechanism. These proposed fee changes 

respond, in part, to changes instituted 

by other markets and simplify the fee 

structure by assessing a fee of $0.0030/ 

share for executed orders routed to all 

markets in all securities (except that a 

$.0003/share fee will be assessed on 

executed orders routed to the NYSE in 

non-ETFs).9 The Exchange believes that 

this simplified fee structure will be 

easier for its participants to understand; 

will not require the Exchange to 

continually modify its fees as other 

markets make changes to their own fee 

schedules; and will allow the Exchange 

to cover a portion of its costs of 

providing its participants with access to 

the Linkage Plan.10

The provisions in Sections E(1), E(6) 

and F(1) of the CHX Schedule of 

Participant Fees and Credits that were 

applicable only through March 31, 2007 

are deemed to have been removed, 

effective as of April 1, 2007, leaving 

only the provisions that took effect on 

April 1, 2007. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b)(4) of the 

Act 11 in that it provides for the 

equitable allocation of reasonable dues, 

fees and other charges among its 

members. 

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. 

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 

Because the foregoing proposed rule 

change establishes or changes a member 

due, fee, or other charge imposed by the 

Exchange, it has become effective 

pursuant to Section 19(b)(3)(A) of the 

Act 12 and Rule 19b–4(f)(2) 13

thereunder. At any time within 60 days 

of the filing of such 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 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change, as amended, 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 rulecomments@sec.gov. Please include File 

No. SR–CHX–2007–05 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CHX–2007–05. 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 


pwalker on PROD1PC71 with NOTICES
26662 Federal Register / Vol. 72, No. 90 / Thursday, May 10, 2007 / Notices 

14 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78s(b)(3)(A)(i). 

3 17 CFR 240.19b–4(f)(1). 

4The Commission has modified the text of the 

summaries prepared by FICC. 

5Securities Exchange Act Release No. 54487 

(September 22, 2006), 71 FR 58025 (October 2, 

2006) [File No. SR–FICC–2005–17]. 

6 15 U.S.C. 78q–1. 

7 15 U.S.C. 78s(b)(3)(A)(i). 

8 17 CFR 240.19b–4(f)(1). 

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 office of the CHX. 

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–2007–05 and should 

be submitted on or before May 31, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–8960 Filed 5–9–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55701; File No. SR–FICC–

2007–02] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Clarify the 

Rules of Its Government Securities 

Division With Respect to Obligations 

Associated With Brokered Repo 

Trades 

May 3, 2007 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

March 12, 2007, the Fixed Income 

Clearing Corporation (‘‘FICC’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change described in Items 

I, II, and III below, which items have 

been prepared primarily by FICC. FICC 

filed the proposed rule change pursuant 

to Section 19(b)(3)(A)(i) of the Act 2 and 

Rule 19b–4(f)(1) thereunder 3 so that the 

proposal was effective upon filing with 

the Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested parties. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The purpose of the proposed rule 

change is to add language to Section 3 

to Rule 19 (Special Provisions for 

Brokered Repo Transactions) of FICC’s 

Government Securities Division 

(‘‘GSD’’) Rules to make explicit that 

blind broker repo trades assumed by 

FICC are included in the calculation of 

the parties to such trades’ receive and 

deliver obligations to FICC. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FICC included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. FICC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements.4

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In 2006, the Commission approved a 

clarifying change to FICC’s Rules 

relating to a longstanding practice by 

FICC of assuming brokers’ positions in 

certain blind broker repo transactions.5

As part of that filing, a new Section 5 

was added to Rule 19 of the GSD Rules 

to expressly provide for this practice. 

FICC has determined that an additional 

change as set forth below is necessary to 

further clarify the GSD Rules with 

respect to obligations associated with 

brokered repo trades. 

Section 3 of GSD Rule 19 allows FICC 

to deem a repo brokered trade as 

compared based solely upon the 

submission of trade data by the broker 

despite an untimely submission of data 

by the dealer and states that such a trade 

would be included in the calculation of 

the margin and mark-to-market 

payments of the parties to the trade. 

FICC is adding language to Section 3 to 

make it clear that such a trade is also 

included in the calculation of the 

parties’ receive and deliver obligations, 

which is consistent with the language in 

Section 5 of Rule 19. The proposed 

change is technical in nature and does 

not reflect a change in the practices or 

policies of GSD. 

The proposed rule change is 

consistent with the requirements of 

Section 17A of the Act 6 and the rules 

and regulations thereunder applicable to 

FICC because the proposed change is a 

clarification that does not adversely 

affect the safeguarding of securities and 

funds in the custody or control of the 

clearing agency or for which it is 

responsible and does not adversely 

affect the respective rights or obligations 

of the clearing agency or its members. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

FICC does not believe that the 

proposed rule change will have any 

impact or impose any burden on 

competition. 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments relating to the 

proposed rule change have not yet been 

solicited or received. FICC will notify 

the Commission of any written 

comments received by FICC. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective upon filing pursuant to Section 

19(b)(3)(A)(i) of the Act 7 and Rule 19b–

4(f)(1) 8 thereunder because it 

constitutes a stated policy, practice, or 

interpretation with respect to the 

meaning, administration, or 

enforcement of an existing rule of FICC. 

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 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 


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