55444 Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Notices

5 17 CFR 200.30–3(a)(12). 1 15 U.S.C. § 78s(b)(1).

2The Exchange will publish notice only of those

MOC order imbalances that occur on the facilities

of the Exchange. Telephone conversation between

David T. Rusoff, Attorney, Foley and Lardner, and

Michael L. Loftus, Attorney, Division of Market

Regulation, SEC (October 16, 1997).

any inappropriate burden on

competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

The Exchange did not solicit or

receive written comments with respect

to the proposed rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of the date of

publication of this notice in the Federal

Register or within such longer period (i)

as the Commission may designate up to

90 days of such date if it finds such

longer period to be appropriate and

publishes its reasons for so finding, or

(ii) as to which the Exchange consents,

the Commission will:

(A) By order approve the proposed

rule change, or

(B) Institute proceedings to determine

whether the proposed rule change

should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning the foregoing.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of the

submissions, 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 an any persons, other than

those that may be withheld from the

public in accordance with the

provisions of 5 U.S.C. § 522, will be

available for inspection and copying at

the Commission’s Public Reference

Section, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the Exchange. All submissions

should refer to File No. SR–CHX–97–20

and should be submitted by November

14, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–28178 Filed 10–23–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39252; File No. SR–CHX–

97–19]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Stock Exchange,

Incorporated Relating to the Adoption

of Rules Governing Market-at-theClose Orders

October 17, 1997.

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

Securities Exchange Act of 1934

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

September 12, 1997, the Chicago Stock

Exchange, Incorporated (‘‘CHX’’ or

‘‘Exchange’’) filed with the Securities

and Exchange Commission

(‘‘Commission’’ or ‘‘SEC’’) the proposed

rule change, as described in Items I, II,

and III below, which Items have been

prepared by the Exchange. The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange proposes to add Article

XX, Rule 44 to the Exchange’s Rules

relating to market-at-the-close orders.

The text of the proposed rule change

is available at the Office of the

Secretary, the Exchange, and at the

Commission.

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

Exchange 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

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

Currently, the Exchange has no rules

regarding market-at-the-close (‘‘MOC’’)

orders. The Exchange therefore wishes

to add specific rules governing MOC

orders to formalize the procedures for

such orders and to delineate the rights

and obligations of Exchange members

and customers with regard to such

orders.

The Exchange proposes to adopt

procedures that are essentially identical

to those used by the New York Stock

Exchange (‘‘NYSE’’). The proposed

r4ule is intended to ensure that orders

sent to the Exchange will receive

treatment similar to orders sent to the

NYSE.

The proposed rule change provides

definitions for all relevant terms.

‘‘Market-at-the-Close Order’’ or ‘‘MOC

order’’ means a market order which is

to be executed in its entirety at the

closing price on the primary market of

the stock named in the order, and if not

so executed, is to be treated as canceled.

‘‘Expiration Day’’ means the last trading

day before the one day a month that

standardized contracts in derivative

products (such as stock index futures,

stock index options, and options on

stock index futures) expire. ‘‘Quarterly

Index Expiration Day’’ means the last

trading day of each calendar quarter

when quarterly index expiration

(‘‘QIX’’) options expire. ‘‘Pilot Stocks’’

means those stocks contained on the list

published from time to time by the

primary market for such stocks.

Certain limitations will apply to MOC

orders on Expiration Fridays and

Quarterly Index Expiration Days. In

general, no such MOC order may be

entered after 2:40 p.m., Central Time, in

any stock. Floor brokers representing

such orders must indicate their MOC

interest to the specialist by 2:40 p.m.

After 2:40 p.m., MOC orders may

generally be entered to offset published

imbalances. However, the liquidation of

positions relating to a strategy involving

any stock index options, using MOC

orders entered after 2:40 p.m., is not

permitted, even if such orders might

offset published imbalances. No MOC

order in any stock may be canceled or

reduced in size after 2:40 p.m.

Cancellations to correct a legitimate

error, however, will continue to be

permitted after 2:40 p.m.

For MOC orders on Expiration Fridays

and Quarterly Index Expiration Days, as

soon as practicable after 2:40 p.m.,

notice will be published by the

Exchange of any MOC order imbalance

of 50,000 shares or more in the Pilot

Stocks,2 stocks being added to or

dropped from an index, and, upon the
Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Notices 55445

3 Id.

4 15 U.S.C. § 78k(a)(1)(G). 5 15 U.S.C. § 78f(b)(5).

6 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

request of a specialist, any other stock

with the approval of a floor official.

Other proposed rules apply to MOC

orders on Non-Expiration Days. No such

MOC order may be entered after 2:50

p.m., Central Time, in any stock, except

to offset a published order imbalance.

Floor brokers representing such orders

must indicate their MOC interest to the

specialist by 2:50 p.m. No MOC order in

any stock may be canceled or reduced

in size after 2:50 p.m. Cancellations to

correct a legitimate error, however, will

continue to be permitted after 2:50 p.m.

For MOC orders on Non-Expiration

Days, as soon as practicable after 2:50

p.m., notice will be published by the

Exchange of any MOC order imbalance

of 50,000 shares or more in the Pilot

Stocks,3 stocks being added to or

dropped from an index, and, upon the

request of a specialist, any other stock

with the approval of a floor official.

A specialist will only be obligated to

accept and guarantee execution of those

MOC orders that are of a size and type

that a specialist would otherwise be

required to accept and guarantee

execution of, if the orders did not have

a market-at-the-close designation.

The proposed rule change provides

that a specialist shall execute MOC

orders in a stock in a specified manner.

Where there is an imbalance between

the buy and sell MOC orders, the

specialist shall, at the close of the

Primary Trading Session on that day,

execute the imbalance for its own

account at the closing price on the

primary market of the stock. The

specialist shall then stop the remaining

buy and sell orders against each other

and pair them off at the closing price on

the primary market of the stock. The

‘‘pair off’’ transaction shall be reported

to the consolidated last sale reporting

system as ‘‘stopped stock.’’ Where the

aggregate size of the buy MOC orders

equals the aggregate size of the sell MOC

orders, the buy orders and sell orders

shall be stopped against each other and

paired off at the closing price on the

primary market of the stock. The

transaction shall be reported to the

consolidated last sale reporting system

as ‘‘stopped stock.’’

Proprietary orders represented

pursuant to Section 11(a)(1)(G) 4 of the

Act (i.e., ‘‘G’’ orders) must be

announced as such and yield priority,

parity and precedence to any order

which is for the account of a person

who is not a member, member

organization or associated person

thereof. Market orders to sell short atthe-close represented as ‘‘G’’ orders

must yield priority, parity and

precedence to limit orders not

represented pursuant to Section

11(a)(1)(G) of the Act. For example, in

executing paired-off MOC orders, a ‘‘G’’

order to sell short at-the-market would

yield to sell orders limited at the closing

price that are not represented as ‘‘G’’

orders. This will be the policy even if

the ‘‘G’’ order to sell short at-the-market

theoretically could have been executed

at a better price (and still satisfy the

‘‘short sale’’ rule in terms of a ‘‘plus’’ or

‘‘zero plus’’ tick) had there not been a

pair-off on the transaction. This would

not be applicable if the order was a

market order to sell ‘‘long’’ or a market

order to buy.

2. Statutory Basis

The Exchange represents that the

proposed rule change is consistent with

Section 6(b)(5) 5 of the Act in that it is

designed to promote just and equitable

principles of trade, to foster cooperation

and coordination with persons engaged

in regulating transactions in securities,

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.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any inappropriate burden on

competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

The Exchange did not solicit or

receive written comments with respect

to the proposed rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of the date of

publication of this notice in the Federal

Register or within such longer period (i)

as the Commission may designate up to

90 days of such date if it finds such

longer period to be appropriate and

publishes its reasons for so finding, or

(ii) as to which the Exchange consents,

the Commission will:

(A) By order approve the proposed

rule change, or

(B) Institute proceedings to determine

whether the proposed rule change

should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning the foregoing.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of the

submissions, all subsequent

amendments, all 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 persons, other

than those that may be withheld from

the public in accordance with the

provisions of 5 U.S.C. § 522, will be

available for inspection and copying at

the Commission’s Public Reference

Section, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the Exchange. All submissions

should refer to File No. SR–CHX–97–19

and should be submitted by November

14, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–28179 Filed 10–23–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39257; File No. SR–CHX–

97–27]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Stock Exchange, Inc. Relating

to the Execution of Stopped Orders

Under the Enhanced SuperMAX

Program

October 17, 1997.

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 October

15, 1997, the Chicago Stock Exchange,

Incorporated (‘‘CHX’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’)

the proposed rule change as described

in Items I, II, and III below, which Items

have been prepared by the selfregulatory organization. The