[Federal Register Volume 63, Number 98 (Thursday, May 21, 1998)]
[Notices]
[Pages 28020-28021]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13502]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39991; File No. SR-CHX-98-10]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, 
Inc., Relating to Membership Dues and Fees

May 13, 1998.
    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 April 27, 1998, the Chicago Stock Exchange, Inc. (``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 CHX. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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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.

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 Proposed of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is twofold. First, the 
proposed rule change would reduce the total fixed fee paid by 
specialist from $345,000 to $220,000 per month. This reduction reflects 
a continuing effort by the Exchange to enhance the effectiveness and 
efficiency of its specialists' operations by reducing costs and thereby 
encouraging improved competition.
    Second, the proposed rule change will expand the type of charges 
which are eligible to be offset by transaction credits to include the 
cost of rebills--certain fees and charges that are paid by the Exchange 
and then ``rebilled'' to the specialists. The Exchange has concluded 
that the economic rationale for providing transaction credits as an 
offset to specialist fees is equally applicable to rebills and to other 
monthly fees owed by specialists, as both charges represent actual 
expenses to the specialist. Because there is no relevant distinction 
between rebills and other monthly fees, the application of transaction 
credits to both types of fees eliminates an artificial barrier and 
results in the appropriate recognition of the contribution of the 
specialists to overall CHX revenue. This proposed rule change is 
particularly important in light of the fact that numerous CHX 
specialist units have entirely offset their fixed fees and are again in 
a position where their future contribution to overall CHX revenue will 
not be recognized.
    The Exchange's Finance Committee has determined that after the 
proposed changes in fee structure, the Exchange will have ample capital 
and resources to continue to fulfill its proscribed duties in its 
capacity as a self-regulatory organization and as a registered national 
securities exchange.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b)(4) of the Act \3\ in that it provides for the 
equitable allocation of reasonable dues, fees and other charges among 
its members.
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    \3\ 15 U.S.C. 78f(b)(40.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that he proposed rule change will 
impose any inappropriate burden on competition.

[[Page 28021]]

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 \4\ and 
subparagraph (e) of Rule 19b-4 thereunder.\5\ 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.
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    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(e).
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IV. Solicitation of Comments

    Interested person are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change 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. 
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, 450 Fifth Street, NW., Washington, 
DC 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-98-10 and should be submitted by June 
11, 1998.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-13502 Filed 5-20-98; 8:45 am]
BILLING CODE 8010-01-M