[Federal Register Volume 66, Number 244 (Wednesday, December 19, 2001)]
[Notices]
[Pages 65524-65525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-31196]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45148; File No. SR-CSE-2001-05]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Cincinnati Stock Exchange, 
Inc. Establishing a Fee Schedule for Nasdaq/National Market Securities 
Transactions and Establishing a Revenue Sharing Program for Trading in 
Nasdaq/National Market Securities

December 11, 2001.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on November 29, 2001, the Cincinnati Stock 
Exchange, Inc. (``CSE'' 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 CSE.\3\ The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The CSE confirmed that the filing received by the Commission 
on November 29, 2001, file number SR-CSE-2001-05, replaced in its 
entirety the filing received by the Commission on November 20, 2001, 
also with the file number SR-CSE-2001-05. Telephone discussion 
between Jeffrey T. Brown, Vice President, Regulation and General 
Counsel, CSE, and Christopher B. Stone, Attorney Advisor, Division 
of Market Regulation, Commission (Dec. 10, 2001).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange proposes to amend the Exchange's rules to establish a 
fee schedule for transactions in Nasdaq/National Market securities 
(``Nasdaq/NM Securities'') and to establish a revenue sharing program 
to reflect recent developments in competitive business strategy. The 
text of the proposed rule change is available at the principal offices 
of the CSE 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 CSE included statements 
concerning the purpose of, and the 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

[[Page 65525]]

in Item IV below. CSE 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 Exchange is proposing two amendments to the Exchange Rules 
governing transaction fees and market data revenue credits in keeping 
with recent trends in the securities industry.
    The first amendment adds subsection (2) to CSE Rule 11.10(A)(e), 
(``Crosses and Meets''). Proposed subsection (2) establishes a fee 
schedule for transactions in Nasdaq/NM Securities.
    The second amendment creates in incentive for CSE members to trade 
Nasdaq/NM Securities on the Exchange and will be codified as CSE Rule 
11.10(A)(l) (``Tape `C' Transaction Credit''). The Exchange believes 
the credit is a logical next step in its efforts to provide competitive 
exchange services to CSE members trading Nasdaq/NM Securities. Under 
the Nasdaq program,\4\ CSE member firms will receive a 75 percent (75%) 
pro rata transaction credit on all Nasdaq Tape C market data revenue 
generated by CSE member trading of Nasdaq/NM Securities.
---------------------------------------------------------------------------

    \4\ Nasdaq/NM Securities will be traded on CSE pursuant to 
section 12(f) of the Act as well as the Joint Self-Regulatory 
Organization Plan Governing the Collection, Consolidation, and 
Dissemination of Quotation and Transaction Information for Nasdaq-
Listed Securities traded on Exchanges on an Unlisted Trading 
Privileges Basis (``Nasdaq-UTP Plan'').
---------------------------------------------------------------------------

2. Statutory Basis
    The proposed rule change is generally consistent with section 6(b) 
of the Act.\5\ The proposed rule change also furthers the objectives of 
section 6(b)(5) of the Act,\6\ particularly, in that it is designed to 
promote just and equitable principles of trade, and to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and, in general, to protect investors and the 
public interest. The proposal also is consistent with section 6(b)(4) 
of the Act \7\ in that it is designed to provide for the equitable 
allocation of reasonable dues, fees, and other charges among Exchange 
members by crediting CSE members on a pro rata basis.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The CSE does not believe that the proposed rule change will result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    The foregoing rule change has become effective pursuant to section 
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(2) thereunder,\9\ as 
establishing or changing a due, fee, or other charge paid solely by 
members of the CSE. At any time within 60 days of the filing of such 
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.\10\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
    \10\ See section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

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. 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 
CSE. All submissions should refer to File No. SR-CSE-2001-05 and should 
be submitted by January 9, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-31196 Filed 12-18-01; 8:45 am]
BILLING CODE 8010-01-M