Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Notices 55443

3 17 CFR 240.19b–4(e)(6).

4 17 CFR 200.30–3(a)(12).

1 15 U.S.C. § 78s(b)(1).

2The ITS BBO is the best bid/offer quote among

the American, Boston, Cincinnati, Chicago, New

York, Pacific, Philadelphia exchanges or the

Intermarket Trading System/Computer Assisted

Execution System, as appropriate.

3The NBBO is the best bid or offer disseminated

pursuant to SEC Rule 11Ac1–1.

4 15 U.S.C. § 78f(b)(5).

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

No written comments were solicited

or received with respect to the proposed

rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The Exchange has asserted that the

proposed rule change (i) will not

significantly affect the protection of

investors or the public interest, (ii) will

not impose any significant burden on

competition, and (iii) will not become

operative for 30 days after the date of

this filing. For the foregoing reasons and

because the Exchange provided at least

five business days notice to the

Commission of its intent to file this

proposed rule change, the rule filing

will become operative as a ‘‘noncontroversial’’ rule change pursuant to

Rule 19b–4(e)(6) under the Act.3

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.

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

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 in Washington, D.C. Copies of

such filing will also be available for

inspection and copying at the principlal

office of the Amex. All submission

should refer to the file number in the

caption above and should be submitted

by November 14, 1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.4

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–28181 Filed 10–23–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39249; File No. SR–CHX–

97–20]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Stock Exchange,

Incorporated Relating to the

Exchange’s BEST Rule

October 16, 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 the Substance

of the Proposed Rule Change

The Exchange proposes to amend

Rule 37(a) of Article XX of the

Exchange’s Rules to clarify that the

Exchange’s BEST Rule guarantee is

limited to both the size and price

associated with the best bid and offer.

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

The purpose of the proposed rule

change is to amend the Exchange’s

BEST Rule (Article XX, Rule 37) to

clarify an ambiguity concerning the

application of the BEST Rule. Currently,

the Exchange’s BEST Rule states that,

subject to certain exceptions, all agency

market orders are guaranteed an

execution on the basis of the ITS BBO 2

for Dual Trading System issues and the

NBBO 3 for Nasdaq/NM issues.

Each best bid and offer, including the

ITS BBO and NBBO, contains two

components—price and size. Because

the BEST Rule requires a specialist to

guarantee an execution on the basis of

the best bid or offer, the Exchange has

consistently interpreted this guarantee

as applying to both the size and price

associated with that best bid or offer. In

this rule change, the Exchange proposes

to add the words ‘‘size and price

associated with’’ to the beginning of the

BEST Rule to clarify that the BEST Rule

guarantee is limited to both the size and

price associated with the best bid and

offer.

This change is consistent with the

Exchange’s existing MAX Rule (Article

XX, Rule 37(b)(11)) which states that

‘‘notwithstanding anything in this Rule

to the contrary, no market order or limit

order that is marketable when entered

into the MAX System will be

automatically executed if the size

associated with the ITS BBO or NBBO,

as the case may be, is of a size less than

such market order or limit order.’’

2. Statutory Basis

The Exchange represents that

proposed rule change is consistent with

Section 6(b)(5) 4 of the Act in that it is

designed 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.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose
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