60234 Federal Register / Vol. 65, No. 196 / Tuesday, October 10, 2000 / Notices

9The Commission notes that the proposal may

raise questions concerning payment for order flow.

To the extent that it does raise such issues,

exchange members should consider best execution

and disclosure obligations they may have under the

federal securities laws in general, and particularly

under Rules 10b–10 and 11Ac1–3 under the Act. 17

CFR 240.10b–10 and 17 CFR 240.11Ac1–3,

respectively.

10 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

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

4On October 13, 1999, the Commission approved,

on a pilot basis, the CHX’s proposed rule change

that allowed the CHX to implement an extended

hours trading session. See Securities Exchange Act

Release No. 42004 (October 13, 1999), 64 FR 56548

(October 20, 1999) (SR–CHX–99–16). The

Commission recently approved the CHX’s proposal

to make the E-Session a permanent part of the

CHX’s operations. See Securities Exchange Act

Release No. 43304 (September 19, 2000), 65 FR

57850 (SR–CHX–00–26). The E-Session takes place

from 3:30 p.m. to 5:30 p.m., Central Time, Monday

through Friday.

5E-Session fees have been waived since the

beginning of the E-Session. See Securities Exchange

Act Release Nos. 42089 (November 2, 1999), 64 FR

60864 (November 8, 1999) (SR–CHX–99–23)

(waiving fees from October 13, 1999 through

December 31, 1999); 42329 (January 11, 2000), 65

FR 3000 (January 19, 2000) (SR–CHX–99–29)

(waiving fees from January 1, 2000 through March

1, 2000); 42486 (March 2, 2000), 65 FR 12601

(March 9, 2000) (SR–CHX–005) (waiving fees from

March 2, 2000 through June 30, 2000); and 42929

(June 13,2000), 65 FR 38620 (June 21, 2000) (SR–

CHX–00–18) (waiving fees from July 1, 2000

through October 1, 2000). This proposal simply

extends the waiver of the same fees through

December 31, 2000. See October 2, 2000 telephone

conversation between Ellen J. Neely, Vice President

and General Counsel, CHX, and Joseph P. Morra,

Special Counsel, Division of Market Regulation,

SEC.

6 15 U.S.C. 78f(b)(4).

abrogate such rule change if it appears

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.9

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether the proposal is

consistent with the Act. Persons making

written submissions should file six

copies thereof with the Secretary,

Securities and Exchange Commission,

450 Fifth Street, NW., Washington, DC

20549–0609. Copies of the submission,

an 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 will also be

available for inspection and copying at

the principal office of the Exchange. All

submissions should refer to file number

SR–CHX–00–29, and should be

submitted by October 31, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.10

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–25867 Filed 10–6–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43403; File No. SR–CHX–

00–30]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Stock Exchange, Incorporated

Relating to Membership Dues and Fees

During the E-Session

October 2, 2000.

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

September 22, 2000, the Chicago Stock

Exchange, Incorporated (‘‘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 by the Exchange. The

Exchange has designated this proposal

as one establishing or changing a due,

fee, or other charge imposed by the CHX

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

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.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange proposes to amend its

membership dues and fees schedule (the

‘‘Schedule’’) to continue, through

December 31, 2000, the waiver of all

transaction, order processing and floor

broker fees for transactions that occur

during the CHX’s E-Session extended

hours trading session. The text of the

proposed rule change is available upon

request from the CHX and 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 proposed rule change amends the

Schedule to eliminate, through

December 31, 2000, order processing,

transaction and floor broker fees for

transactions that occur during the CHX’s

E-Session.4 This proposal is designed to

allow CHX members to continue to

participate in the E-Session without

incurring the fees normally associated

with their CHX transactions.5 According

to the Exchange, the vast majority of the

securities that trade during the ESession are already subject to order

processing and transaction fee waivers

under the current fee schedule because

they are either Nasdaq/NMS issues or

issues within the S&P 500. Waiving fees

on the few remaining securities and on

floor broker transactions in all securities

simplifies the Exchange’s fee-related

communications with its members.

2. Statutory Basis

The Exchange believes the proposed

rule change is consistent with Section

6(b)(4) of the Act 6 in that it provides for

the equitable allocation of reasonable

dues, fees and other charges among its

members.

Federal Register / Vol. 65, No. 196 / Tuesday, October 10, 2000 / Notices 60235

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

8 17 CFR 240.19b–4(f)(2).

9 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See Securities Exchange Release No. 42357 (Jan.

27, 2000), 65 FR 5383.

4See PCX Rule 5.25(b)(1).

5See, e.g., PCX Rule 5.8(c).

6 In approving this rule proposal, the Commission

notes that it has also considered the proposed rule’s

impact on efficiency, competition, and capital

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

7 15 U.S.C. 78f(b)(5).

8Telephone conversation between Michael

Pierson, Vice President, Regulatory Policy, PCX,

and Kelly Riley, Attorney, Division of Market

Regulation, Commission, on September 12, 2000.

9 15 U.S.C. 78j.

10 15 U.S.C. 78f(b)(2).

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

No written comments were solicited

or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The proposed rule change has become

effective pursuant to Section

19(b)(3)(A)(ii) of the Act 7 and

subparagraph (f)(2) of Rule 19b–4

thereunder,8 because it involves a due,

fee, or other charge. 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 proposal is

consistent with the Act. Persons making

written submissions should file six

copies thereof with the Secretary,

Securities and Exchange Commission,

450 Fifth Street, NW, Washington, DC

20549–0609. 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 will also be

available for inspection and copying at

the principal office of the Exchange. All

submissions should refer to file number

SR–CHX–00–30, and should be

submitted by October 31, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–25868 Filed 10–6–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43404; File No. SR–PCX–

99–50]

Self-Regulatory Organizations; Pacific

Exchange, Inc.; Order Granting

Approval to Proposed Rule Change

Relating to Non-Agency Orders in P/

COAST

October 2, 2000.

I. Introduction

On November 18, 1999, the Pacific

Exchange, Inc. (‘‘PCX’’ or ‘‘Exchange’’)

submitted to the Securities and

Exchange Commission (‘‘Commission’’

or ‘‘SEC’’) pursuant to Section 19(b)(1)

of the Securities Exchange Act of 1934

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

proposed rule change to allow nonagency orders to be routed through and

executed in the Pacific Computerized

Order Access SysTem (‘‘P/COAST’’).

The proposed rule change was

published for comment in the Federal

Register on February 3, 2000.3 No

comments were received on the

proposal. This order approves the

proposal.

II. Description of Proposal

The P/COAST system is the

Exchange’s communication, order

routing and order execution system for

equity securities. Currently, only agency

orders are permitted to be routed

through, and executed in, the P/COAST

system.4 In the proposed rule change,

the Exchange seeks to abolish the

current rule, and allow both agency and

principal orders to be routed through

and executed in the P/COAST system.

The Exchange is not proposing to

change its existing rules regarding the

priority of bids and offers,5 which do

not currently distinguish between

agency and principal orders.

Accordingly, agency and principal

orders will be able to be routed and

executed through the P/COAST system.

III. Discussion

After careful review, 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.6 In particular, the

Commission believes that the proposed

rule is consistent with the requirements

of Section 6(b)(5) of the Act 7 because it

is designed to help perfect the

mechanism of a free and open market

and is not designed to permit unfair

discrimination between customer and

brokers or dealers.

Under the Exchange’s proposed rule

change, non-agency orders may be

routed through the P/COAST system for

execution. Currently, principal orders

are executed manually on the floor of

the Exchange. The Commission believes

that the proposed rule change should be

beneficial because it will allow brokerdealers to take advantage of the

increased speed associated with the use

of P/COAST, thus providing more

efficient execution of their orders.

However, according to the PCX, orders

of specialists and floor brokers will not

be able to be entered into the P/COAST

system.8

The Commission believes that the

Exchange’s proposal is consistent with

the Act because it does not discriminate

between customers, brokers or dealers:

all orders in a particular stock will

receive the same treatment whether the

order is an agency or non-agency order.

However, orders of PCX members will

still have to comply with Section 11(a)

of the Act.9 Further, the proposal should

facilitate transactions on the Exchange

because all eligible orders will now be

routed automatically by the P/COAST

system. This should lead to more timely

executions of principal orders.

IV. Conclusion

It Is therefore Ordered, pursuant to

Section 19(b)(2) of the Act,10 that the

proposed rule change (SR–PCX–99–50)

is approved.