Document ID: SEC-2009-1420-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to the Fees and Rebates in Various Trading Sessions
Posted Date: 2009-10-07T04:00Z

[Federal Register: October 7, 2009 (Volume 74, Number 193)]
[Notices]               
[Page 51633-51635]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07oc09-108]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60753; File No. SR-CHX-2009-14]

 
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Related to the Fees and Rebates in Various Trading Sessions

September 30, 2009.
    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 September 22, 2009, the Chicago Stock Exchange, Inc. (``CHX'' or 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II 
and III below, which Items have been prepared by the Exchange. CHX has 
filed the proposal pursuant to Section 19(b)(3)(A) of the Act \3\ and 
Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal effective 
upon filing with the Commission. The Commission is publishing this 
notice to solicit

[[Page 51634]]

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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The CHX proposes to amend its Schedule of Participant Fees and 
Assessments (the ``Fee Schedule''), effective September 28, 2009, to 
provide for separate trading activity fees for its new Early and Late 
Trading Sessions. The text of this proposed rule change is available on 
the Exchange's Web site at http://www.chx.com/rules/proposed_rules.htm 
and in the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549.

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 changes and 
discussed any comments it received regarding the proposal. 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 Changes

1. Purpose
    In a separate filing, the Exchange has created a new Early Trading 
Session beginning at 6 a.m. CT on days the Exchange is open for trading 
and a Late Trading Session from 3 p.m. to 3:15 p.m. CT.\5\ We plan to 
implement these two new sessions on September 28, 2009.
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    \5\ SR-CHX-2009-13 (Sept. 1, 2009).
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    In furtherance of this initiative, the Exchange proposes to amend 
its Schedule of Participant Fees and Assessments. We propose to charge 
a trading activity fee for single-sided orders of $0.003 per share for 
liquidity taken in Tape A, B and C securities priced at or above $1 per 
share in the new early and late trading sessions. A corresponding 
rebate of $0.0022 per share for liquidity provided in such securities 
would also be added to the Fee Schedule. Fees and rebates will be 
assessed based upon the session in which the underlying transactions 
were executed. We believe that these fees and charges are appropriate 
to meet the Exchange's objective of attracting sufficient trading 
activity in these sessions on a profitable basis. The increased 
differential reflects, in part, our expectation of a lower amount of 
market data revenue for trades executed in the Early and Late Trading 
Sessions, and a corresponding reliance on trading activity fee revenue 
to support the operational costs associated with these two sessions.
    The Exchange acknowledges that these charges differ from the fees 
and rebates for such securities in the Regular Trading Session. Trading 
activity fees and rebates, however, are often not uniform at a given 
exchange depending on the circumstances. For example, Nasdaq and NYSE 
Arca have different Tiers for take/provide fees for a member depending 
on the average number of shares transacted and liquidity provided to 
their exchanges. Trading activity fees and rebates frequently vary 
depending on whether the security is reported as Tape A, B or C. 
Provide rebates may vary depending on the nature of the order, e.g., if 
the order was not displayed (Nasdaq) or was a Market-on-Close/Limit-on-
Close order (NYSE Arca). Finally, a number of exchanges, including the 
CHX, have different take/provide rates for securities trading under $1. 
Our charges for trading activity are and will continue to be disclosed 
in the Fee Schedule posted on our public Web site and in a Legal Notice 
to our Participants.
    The current fee and rebate structure for stocks trading under $1 
would be extended to the Early and Late Trading Sessions. All other 
current trading-related fees and charges would extend equally to the 
Early and Late Trading Sessions. Fees and charges relating to cross 
transactions executed in the Late Crossing Session would remain 
unchanged.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \6\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act \7\ in particular, in that it 
provides for the equitable allocation of reasonable dues, fees and 
other charges among its members. Among other things, the change to the 
fee schedule would provide a reasonable amount of expected revenue to 
the Exchange to offset the expenses of operating these new trading 
sessions.
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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section 
19(B)(3)(A)(ii) of the Act \8\ and subparagraph (f)(2) of Rule 19b-4 
thereunder \9\ because it establishes or changes a due, fee, or other 
charge applicable only to a member imposed by the self-regulatory 
organization. Accordingly, the proposal is effective upon Commission 
receipt of the filing. 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.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposal 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 rule-comments@sec.gov. Please include 
File No. SR-CHX-2009-14 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-CHX-2009-14. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your

[[Page 51635]]

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 changes 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 such 
filing will also be available for inspection and copying at the 
principal office of the CHX. 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-CHX-2009-14 and should be submitted on or before October 
28, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-24082 Filed 10-6-09; 8:45 am]

BILLING CODE 8011-01-P