6232 Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Notices 

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 Article 20, Rule 5. 

4See Article 20, Rule 6. 

5The participant is responsible for ensuring that 

it has a relationship with its chosen destination to 

permit the requested access. The Exchange is not 

involved in the execution of the order—any 

execution of the order is the responsibility of the 

destination to which the order was sent. The 

Exchange, however, reports any execution or 

cancellation of the order by the other destination to 

the participant that submitted the order and notifies 

the other venue of any cancellations or changes to 

the order submitted by the order-sending 

participant. See Article 20, Rule 5, Interpretation 

and Policy .03(b). 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing proposed rule change is 

effective upon filing pursuant to Section 

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

4(f)(2) 8 thereunder because it 

establishes or changes a due, fee, or 

other charge applicable only to a 

member imposed by the Exchange. 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 proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–CBOE–2008–06 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2008–06. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro/shtml). 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 on official business days between 

the hours of 10 a.m. and 3 p.m. Copies 

of such filing will also be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File No. SR–CBOE–

2008–06 and should be submitted on or 

before February 22, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E8–1789 Filed 1–31–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–57203; File No. SR–CHX–

2007–18] 

Self-Regulatory Organizations; 

Chicago Stock Exchange, Inc.; Notice 

of Filing of Proposed Rule Change, as 

Modified by Amendment No. 1 Thereto, 

To Make Administrative Changes to Its 

Routing Rules 

January 25, 2008. 

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 July 6, 

2007, the Chicago Stock Exchange, Inc. 

(‘‘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 

substantially prepared by the CHX. On 

January 22, 2008, the Exchange filed 

Amendment No. 1 to the proposed rule 

change. The Commission is publishing 

this notice to solicit comments on the 

proposed rule change, as amended, from 

interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The CHX proposes to amend its rules 

to make administrative changes that are 

designed to allow third-party routers to 

provide better service to their 

customers. The text of this proposed 

rule change is available at the CHX, on 

the Exchange’s Web site at http:// 

www.chx.com/rules/ 

proposed_rules.htm, and in the 

Commission’s Public Reference Room. 

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 

CHX 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 CHX 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 

Under the Exchange’s rules, the 

Exchange’s Matching System will not 

execute an order if its execution would 

be improper under Rule 611 of 

Regulation NMS under the Act (an 

‘‘improper trade-through’’).3 Similarly, 

the Exchange’s Matching System will 

not display an order if its display would 

improperly lock or cross other markets.4

In these situations, the Exchange either 

cancels the order back to the participant 

that submitted it or routes the order to 

the destination of the participant’s 

choice, all at the direction of the 

participant.5

Under this proposal, the Exchange 

seeks to make three administrative 

changes to its routing rules to permit 

these third-party routers to provide 

better service to their customers. The 

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Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Notices 6233 

6For example, if the Exchange routes a 

participant’s buy order to the participant’s chosen 

destination (Router ABC) and Router ABC gets an 

execution of that order in another market against 

market maker XYZ, the first leg of the transaction 

(ABC buying from XYZ) will be reported to clearing 

by the other market. The Router ABC would send 

an execution report back to the Exchange (for 

routing to the original order-sending participant). 

Under this proposal, if the participant and Router 

ABC had requested, the Exchange would take the 

execution report and create a clearing-only record, 

flipping the execution from Router ABC’s account 

to the account of the order-sending participant 

(ABC selling to the order-sending participant). 

7The routing of an outbound ISO or a cross with 

satisfy will be provided pursuant to the agreements 

described in section (c)(1) of Interpretation .03 to 

Rule 5, to the extent that the agreements are 

applicable to a specific routing decision. See Article 

20, Rule 5, Proposed Interpretation and Policy 

.03(c)(1). 

8See Article 20, Rule 5, Proposed Interpretation 

and Policy .03(c). 

9Because these proposals do not make 

substantive changes to the Exchange’s routing 

structure, the Exchange believes that its routing of 

orders to a participant’s chosen destination would 

continue to be a facility of the Exchange, but the 

destinations chosen by each participant would not 

constitute Exchange facilities. 

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

11 15 U.S.C. 78f(b)(5). 12 17 CFR 200.30–3(a)(12). 

first proposed change would allow a 

participant and a routing destination to 

request that the CHX flip any executions 

into the participant’s account and report 

that second leg of the away-market 

transaction to clearing.6 This service 

would give the order-sending 

participant the option of consolidating 

its clearing reports in specific locations. 

The second proposed change would 

allow the CHX (and a routing 

destination) to determine whether 

additional agreements with CHX 

participants are needed to implement 

the routing functionality for all orders, 

except a cross with satisfy or an 

outbound ISO.7 While the CHX believes 

that most routing destinations will 

require that order-senders sign 

additional agreements for any services 

that the destinations might provide, the 

CHX wants to provide flexibility for 

destinations to make choices 

appropriate to their business models. 

Finally, the third proposed change 

would allow a participant to ask its 

chosen destination to use the 

participant’s own give-up (rather than 

the routing destination’s give-up) when 

routing orders to other markets as part 

of a cross with satisfy or an outbound 

ISO.8 We believe that some 

participants—that already have good 

give-ups in other markets—might prefer 

that the routing service use those giveups rather than its own. 

The Exchange believes that these 

proposed changes do not substantially 

change the existing routing process, but 

instead simply provide additional 

flexibility to the third-party routing 

services that participants might desire to 

use.9

2. Statutory Basis 

The CHX believes the proposal is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder that are applicable to a 

national securities exchange, and, in 

particular, with the requirements of 

Section 6(b).10 The proposed rule 

change is consistent with Section 6(b)(5) 

of the Act 11 because it would promote 

just and equitable principles of trade, 

remove impediments to, and perfect the 

mechanism of, a free and open market 

and a national market system, and, in 

general, protect investors and the public 

interest by allowing the Exchange to 

provide additional flexibility to its 

participants and the destinations to 

which the Exchange should route their 

orders. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule changes will impose 

any 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 either 

solicited or received. 

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 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, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–CHX–2007–18 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–CHX–2007–18. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). 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, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of the filing also will be available 

for inspection and copying at the 

principal office of the Exchange. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–CHX–2007–18 and should 

be submitted on or before February 22, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E8–1787 Filed 1–31–08; 8:45 am] 

BILLING CODE 8011–01–P 

mstockstill on PROD1PC66 with NOTICES