1938 Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices

2 15 U.S.C. § 78f(b)(4).

3 15 U.S.C. § 78s(b)(3)(A).

4 17 CFR 19b–4(e).

5 17 CFR 200.30–3(a)(12).

1See Securities Exchange Act Release Nos. 26218

(October 26, 1988), 53 FR 44137 (November 1,

1988); 27370 (October 23, 1989), 54 FR 43881

(October 27, 1989); 28580 (October 25, 1990), 55 FR

45895 (October 31, 1990); 29868 (October 28, 1991),

56 FR 56535 (November 5, 1991); 33120 (October

29, 1993), 58 FR 59503 (November 9, 1993); 36414

(October 25, 1995), 60 FR 55630 (November 1,

1995); and 37459 (July 19, 1996), 61 FR 39172 (July

26, 1996).

2 ‘‘Dow Jones Industrial Average’’ is a service

mark of Dow Jones & Company, Inc.

3See Securities Exchange Act Release No. 26218

(October 26, 1988), 53 FR 44137 (November 1,

1988).

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 waive membership dues for

the month of December, 1996, and

waive floor telephone booth and post

space charges for the fourth quarter of

1996 because the Exchange has already

adequately covered its costs associated

with these services for the year.

2. Statutory Basis

The proposed rule change is

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

Act 2 in that it provides for the equitable

allocation of reasonable dues, fees and

other charges among its members and

issuers and persons using its facilities.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose a

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 foregoing rule change establishes

or changes a due, fee, or other charge

imposed by the Exchange and therefore

has become effective pursuant to

Section 19(b)(3)(A) of the Act 3 and

subparagraph (e) of Rule 19b–4 4

thereunder. At any time within 60 days

of the filing of such 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 submission

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 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, 450 Fifth Street, N.W.,

Washington, D.C. Copies of such filing

also will be available for inspection and

coping at the Exchange. All submissions

should refer to File No. SR–CHX–96–32

and should be submitted by January 27,

1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–808 Filed 1–13–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38130; File No. SR–CHX–

96–33]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Stock Exchange,

Incorporated Relating to the Circuit

Breaker Pilot Program

January 6, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on December 18, 1996,

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 CHX. 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 CHX proposes to amend Article

IX, Rule 10A ‘‘Trading Halt Due to

Extraordinary Market Volatility’’

(‘‘circuit breakers’’) 1 to increase the

levels at which such circuit breakers are

triggered. The Exchange seeks to effect

these changes on a one-year pilot basis.

The text of the proposed rule change

is available at the Office of the

Secretary, the CHX, 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

Article IX, Rule 10A (Trading Halts

Due to Extraordinary Market Volatility)

is the Exchange’s codification of the

several recommendations for circuit

breakers which were made in the wake

of the market break of 1987. The current

rule, which is due to expire on October

31, 1997, provides that if the Dow Jones

Industrial Average 2 (‘‘DJIA’’) falls 250

or more points below its previous

trading day’s closing value, trading in

all stocks on the Exchange shall halt for

one-half hour. The Rule further provides

for a one hour trading halt if the decline

in the DJIA is 400 or more points.

Although the Rule was amended in July

1996 to shorten the time periods for

marketwide trading halts, the levels of

the circuit breakers themselves have not

been adjusted since the Rule was first

adopted. The Exchange believes that it

is appropriate to amend Article IX, Rule

10A to raise the circuit breakers from

250 points to 350 points and from 400

points to 550 points.

Article IX, Rule 10A was approved by

the Commission in October 1988 as a

one-year pilot3 and has been extended

on a pilot basis since then. At that time,

the DJIA was at a level of about 2100

points. A 250 point drop would have

represented at 12% decline in the

average. A 400 point drop would have
Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices 1939

4 17 CFR 200.30–3(a)(12).

1 15 U.S.C. § 78s(b)(1).

represented a 19% decline in the

average. Article IX, Rule 10A has never

been invoked, as the DJIA has not

declined by 250 points or more since

the rule was adopted. The largest

decline occurred on March 8, 1996,

when the DJIA fell intra-day 217 points

below its previous day’s closing value.

Today, with the DJIA at about 6500

points, a 250 or 400 point drop would

represent a much smaller percentage

decline in the average (3.8% and 6.2%,

respectively).

The proposed circuit breakers of 350

and 550 points would represent,

respectively, a 5.4% and 8.5% decline

in the DJIA, which are significant

market declines and thus represent

appropriate levels at which to halt

trading. The proposed trigger values

take into account the rise in market

values since the Rule was first adopted,

while also recognizing the fact that the

original trigger values have never been

reached. The Exchange believes that the

new trigger values in Article IX, Rule

10A should be stated in absolute

numbers, rather than in terms of

percentages of the DJIA, in order to

facilitate understanding by all market

participants as to exactly when the

circuit breakers will be utilized.

The Exchange seeks to effect these

changes on a one-year pilot basis. The

adoption of amendments to Article IX,

Rule 10A would be contingent upon the

adoption of amended rules or

procedures substantively identical to

this rule by:

(1) All United States stock exchanges

and the National Association of

Securities Dealers, Inc. with respect to

the trading of stocks, stock options and

stock index options; and,

(2) All United States futures

exchanges with respect to the trading of

stock index futures and options on such

futures.

The exchange believes that an allmarket trading halt requirement at

appropriate levels will promote stability

and investor confidence during periods

of significant stress by providing market

participants with a reasonable

opportunity to become aware of and

respond to significant price movements,

thereby facilitating in an orderly manner

the maintenance of an equilibrium

between buying and selling interest.

2. Basis

The exchange believes that the

proposed rule change is consistent with

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

designed to promote just and equitable

principles of trade. The Exchange

believes that amending Article IX, Rule

10A on a pilot basis is consistent with

these objectives in that the revised

trading halt triggers during a period of

significant stress can be expected to

provide market participants with a

reasonable opportunity to become aware

of and respond to significant price

movements, thereby facilitating, in an

orderly manner, the maintenance of an

equilibrium between buying and selling

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

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

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 self-regulatory

organization consents, the Commission

will:

(A) By order approve such 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

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

Section, 450 Fifth Street, N.W.,

Washington, D.C. Copies of such filing

will also be available for inspection and

copying at the principal office of the

CHX. All submissions should refer to

File No. SR–CHX–96–33 and should be

submitted by January 27, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.4

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–809 Filed 1–13–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38126; File No. SR–NASD–

96–56]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by National

Association of Securities Dealers, Inc.

Relating to Increase in Minimum Gross

Income Assessment

January 6, 1997.

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

Securities Exchange Act of 1934

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

December 24, 1996, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’) 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 NASD. 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

NASD Regulation, Inc. (‘‘NASD

Regulation’’) is proposing a rule change

to amend Section 1 to Schedule A of the

By-Laws to increase the minimum gross

income assessment from $850.00 to

$1,200.00. Proposed new language is

italicized; proposed deletions are in

brackets.

Schedule A to the NASD By-Laws

Assessments and fees pursuant to the

provisions of Article VI of the By-Laws

of the Corporation, shall be determined

on the following basis.

Section 1—Assessments

Each member shall pay an annual

assessment composed of:

(a) An amount equal to the greater of

$1,200.00[850.00] or the total of:

(i) 0.125% of the annual gross revenue

from state and municipal securities

transactions,