Document ID: SEC-2008-0045-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations: Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Trade Processing Fees
Posted Date: 2008-01-08T05:00Z

[Federal Register: January 8, 2008 (Volume 73, Number 5)]
[Notices]               
[Page 1380-1382]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08ja08-92]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57078; File No. SR-CHX-2007-28]

 
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Regarding Trade Processing Fees

December 31, 2007.
    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 December 21, 2007, the Chicago Stock Exchange, Inc. (``Exchange'' or 
``CHX'') filed with the Securities and Exchange

[[Page 1381]]

Commission (``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been substantially 
prepared by the Exchange. 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.
---------------------------------------------------------------------------

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

    Through this filing, the Exchange proposes to amend its Schedule of 
Participant Fees and Assessments (the ``Fee Schedule'') to provide that 
recently-modified processing fees would no longer be assessed on a per-
report basis, but would be rolled up and assessed on a per-trade basis. 
The text of the proposed rule change is available on the Exchange's Web 
site (http://www.chx.com/rules/proposed_rules.htm), at the Exchange's 

principal office, and at 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 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 Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Under the Exchange's Fee Schedule, the Exchange assesses a fee in 
connection with the processing of certain away-market trades that are 
sent to clearing through the Exchange's facilities.\3\ The fees are 
charged for each report submitted to clearing.\4\
---------------------------------------------------------------------------

    \3\ The Exchange recently increased this fee to $0.0035/share, 
up to a maximum of $100 per side, for clearing reports in Tape A and 
B securities and to $0.0025/share, up to a maximum of $100 per side, 
for clearing reports in Tape C securities. See Securities Exchange 
Act Release No. 56833 (November 21, 2007), 72 FR 67616 (November 29, 
2007) (SR-CHX-2007-26). The Exchange also recently began to apply 
the fee to trades in all securities, instead of limiting the fee to 
securities that are not listed or traded on the Exchange. See id. 
These fee changes were designed to help offset the Exchange's costs 
of processing these transactions for clearing.
    \4\ Each away-market trade may be composed of more than one 
clearing report. For example, if a single away-market trade for 
4,000 shares includes a clearing report for 1,000 shares between 
Firm A and Firm B and a clearing report for 3,000 shares between 
Firm A and Firm C, a separate fee would be assessed on each clearing 
report. As a result, Firm A could be charged up to $100 per side on 
each of the two clearing reports, resulting in a potential fee of 
$200.
---------------------------------------------------------------------------

    Through this filing, the Exchange would amend the Fee Schedule to 
provide that the fees would no longer be assessed on a per-report 
basis, but would be rolled up and assessed on a per-trade basis.\5\ The 
Exchange has recently made changes to its billing process that would 
allow the fee to be calculated in this manner and believes that this 
revised calculation method provides a fair and reasonable means of 
assessing this fee.\6\
---------------------------------------------------------------------------

    \5\ Under this revised fee, in the example set out in footnote 4 
above, Firm A would be charged up to only $100 per side on the full 
4,000 shares associated with the away-market trade.
    \6\ The Exchange currently uses this ``rolled-up'' method to 
calculate the transaction fees charged for agency transactions that 
are handled by its institutional brokers. See Fee Schedule, 
paragraph E.3. By calculating the transaction and processing fees in 
the same way, the Exchange hopes to eliminate any confusion that may 
have resulted from its initial choice of a different calculation 
method. Moreover, the fees that are generated through the processing 
of clearing reports under this new calculation method will still 
serve to help offset the Exchange's associated costs of providing 
the service, thus ensuring that the fee equitably allocates the 
Exchange's costs among its participants.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b)(4) of the Act,\7\ in that it provides for the 
equitable allocation of reasonable dues, fees, and other charges among 
its members.
---------------------------------------------------------------------------

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

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 on the Proposed 
Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    Because the foregoing proposed rule change establishes or changes a 
due, fee, or other charge imposed by the Exchange, it has become 
effective upon filing pursuant to section 19(b)(3)(A) of the Act \8\ 
and Rule 19b-4(f)(2) thereunder.\9\ 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 19b-4(f)(2).
---------------------------------------------------------------------------

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 rule-comments@sec.gov. Please include 

File No. SR-CHX-2007-28 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-2007-28. 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

[[Page 1382]]

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 such 
filing also will 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 Number SR-CHX-2007-28 and should be submitted on or before January 
29, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-91 Filed 1-7-08; 8:45 am]

BILLING CODE 8011-01-P