2850 Federal Register / Vol. 61, No. 19 / Monday, January 29, 1996 / Notices

8 15 U.S.C. 78f(b)(4).

9See Securities Exchange Act Release No. 35167

(Dec. 28, 1994), 60 FR 1816 (approving File No. SR–

NASD–94–75 and publishing the NASD’s

determination that there have been situations in

which industry parties have purposely not

disclosed the monetary amount of their claim in

order to reduce the nonrefundable filing fee from

$500 to $250).

10 15 U.S.C. 78f(b)(6).

11 15 U.S.C. 78s(b)(2).

12 17 CFR 200.30–3(a)(12).

SM NATIONAL BEST is a service mark of the

Chicago Stock Exchange, Inc.

1Also excluded from the NATIONAL BEST

feature are orders received when the spread

between the national best bid and offer is one

minimum variation, and MAX floor broker orders.

2For stocks that are not ITS-eligible, the CHX

quote is used.

3The algorithm that calculates the savings per

share can calculate price improvement from a

minimum of 1⁄32 or $0.03125 per share to a

maximum of 96/32 or $3.00 per share. If price

improvement exceeds $3.00 per share, the

NATIONAL BEST will be preceded by a ‘‘>’’ sign

and will equal $3.00 × the number of shares traded.

620(e) would unify the nonrefundable

filing fee for all industry claims at $500.

The Commission finds that this

proposed amendment is consistent with

Section 6(b)(4) 8 because it provides for

the equitable allocation of reasonable

fees among its members and other

persons using its facilities. Moreover, a

uniform filing fee removes any

temptation for industry parties to

purposely omit the monetary amount of

their claims in order to reduce the

nonrefundable filing fee from $500 to

$250.9

The Exchange is proposing to add a

new rule, Amex Rule 624. This new rule

would provide that the failure of a

member firm or registered

representative to honor an arbitration

award, including those issued at another

self-regulatory organization or by the

American Arbitration Association,

would subject the firm or registered

representative to disciplinary

proceedings at the Exchange.

The Commission finds that the

addition of proposed Amex Rule 624 to

the Exchange’s arbitration rules is

consistent with Section 6(b)(6) 10

because it provides for appropriate

disciplinary action for violating the

provisions of the Act, the rules and

regulations thereunder, or the rules of

the Exchange. By establishing the

enforceability of arbitration awards, this

proposal should increase the

effectiveness of the arbitration process.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,11 that the

proposed rule change (SR–Amex–95–

46) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.12

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–1565 Filed 1–26–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36751; File No. SR–CHX–

96–03]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Stock Exchange, Incorporated

Relating to a Program To Display Price

Improvement on the Execution Report

Sent to the Entering Firm

January 22, 1996.

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 January 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 selfregulatory organization. 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 implement a

program that will calculate and display,

on the execution reports sent to member

firms, the dollar amounts realized as

savings to their customers as a result of

price improvement in the execution of

their orders on the Exchange.

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

self-regulatory organization 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 self-regulatory organization 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 implement a program for

calculating and displaying, on an

execution report sent to member firms

entering orders, the dollar value saved

by their customers as a result of price

improvement of orders executed on the

Exchange. This program does not in any

way affect the actual execution of

orders. The Exchange is proposing to

refer to this calculated dollar savings as

the ‘‘NATIONAL BESTSM.’’

The NATIONAL BEST is proposed to

be made available for intraday market

orders entered via the Exchange’s MAX

system that are not tick sensitive and are

entered from off the Floor.1 The

NATIONAL BEST (amount of price

improvement) is calculated in

comparison to the best bid and offer

displayed in the national market system

at the time the order is received.2 Only

orders executed at a price better than

the inside market will receive a

NATIONAL BEST indicator.

The following examples illustrate

how NATIONAL BEST is proposed to

work.

Assume the national market quote is

50–501⁄4.

Example 1—A market order to sell

1000 shares, entered on the CHX, is

stopped at 50, meaning it is guaranteed

a price at 50 or a better price. The quote

is narrowed to 50–501⁄8 and the order is

subsequently executed at 501⁄8. This is

an 1⁄8 point savings over the national bid

price of 50, which translates into $125

savings over the guaranteed price. Thus,

the execution report would display

NATIONAL BEST $125.3

Assume the national market quote is

50–501⁄4.

Example 2—A market order to buy

800 shares, entered on the CHX, is

executed at 501⁄8. This is an 1⁄8 point

savings over taking the prevailing offer

of 501⁄4. The execution report would

display NATIONAL BEST $100.

If there is no price improvement

because either there was no execution

between the national best bid or offer or

the order was not eligible for the

program, then no price improvement

information would be displayed on the

execution report to the entering firm.

The Exchange believes that the

NATIONAL BEST can be expected to

enhance the information made available

to investors and improve their

understanding of the auction market.
Federal Register / Vol. 61, No. 19 / Monday, January 29, 1996 / Notices 2851

4 17 CFR 240.19b–4(e)(5). 1 15 U.S.C. 78s(b)(1).

2The Commission notes that the CHX has

decided to terminate the clearance and settlement

services offered by several of its subsidiaries. See

Securities Exchange Act Release No. 36684 (Jan. 5,

1995), 61 FR 1195 (approving the necessary

proposed rule changes and providing details of the

CHX’s agreement not to engage in the businesses

from which it has decided to withdraw).

3The Commission notes that the National

Association of Securities Dealers, Inc. refers to such

securities as ‘‘Nasdaq National Market Securities.’’

However, the Exchange, in order to maintain

consistency within its rules, still utilizes the term

‘‘NASDAQ/NMS Securities.’’ The Exchange intends

to update this aspect of its rules at a later date.

Telephone conversation between David T. Rusoff,

Attorney, Foley & Lardner, and Anthony P. Pecora,

Attorney, SEC (Jan. 16, 1996).

4MAX stands for ‘‘Midwest Automated Execution

System.’’ This system may be used to provide

automated delivery and execution of certain orders.

See Chicago Stock Exchange Guide, Article XX,

Rule 37.

2. Statutory Basis

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, to

remove impediments and to perfect the

mechanism of a free and open market

and a national market system, and, in

general, to protect investors and the

public interest. This rule change is

designed to perfect the mechanism of a

free and open market in that it enhances

the information provided to investors by

displaying to them the dollar value of

the price improvement their orders may

have received when executed on the

CHX.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange believes that no burden

will be placed on competition as a result

of the proposed rule change. In fact, the

Exchange believes that the NATIONAL

BEST program can reasonably be

expected to enhance competition by

disclosing to investors the amount of

savings they may realize as a result of

the price improvement their orders may

receive when executed on the CHX.

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

Because the foregoing proposed rule

change: (1) Does not significantly affect

the protection of investors or the public

interest, (2) does not impose any

significant burden on competition, and

(3) does not have the effect of limiting

access to or availability of any Exchange

order entry or trading system, the

NATIONAL BEST program has become

effective pursuant to Section

19(b)(3)(A)(iii) of the Act and Rule 19b–

4(e)(5) thereunder.4 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

purpose 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 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 at

the Commission’s Public Reference

Section, 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 CHX. All submissions

should refer to File No. SR–CHX–96–03

and should be submitted by February

20, 1996.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–1566 Filed 1–26–96: 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36753; File No. SR–CHX–

95–30]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Stock Exchange, Incorporated

Relating to Order Processing Fees and

Transaction Fees

January 22, 1996.

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

Securities Exchange Act of 1934

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

January 2, 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 self-regulatory

organization. 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

Section (c), add a new Section (d), and

make conforming renumbering changes

to existing Sections (d) through (o) of 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

self-regulatory organization 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 self-regulatory organization 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 simplify the Exchange’s

order processing and transaction fee

schedule. The new fee schedule

contemplates two types of fees. First,

the CHX will assess a processing fee for

odd lot orders and limit orders that are

placed on a specialist’s book and are

executed subsequently. The odd lot

processing fee is similar to the current

odd lot transaction fee, except that it

will not include applicable trade

recording fees.2 It will be $.35 per trade,

up to a maximum of $400.00 per month.

The open limit order processing fee will

be $.25 per limit order that is executed.

Orders in NASDAQ/NMS Securities 3

will not be assessed any order

processing fees.

Second, the Exchange will assess

certain transaction fees for orders

executed on the CHX. Market orders

sent via MAX 4 will not be assessed any