Document ID: SEC-2005-0136-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Chicago Stock Exchange, Inc.
Posted Date: 2005-10-20T04:00Z

[Federal Register: October 20, 2005 (Volume 70, Number 202)]
[Notices]               
[Page 61162-61163]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20oc05-78]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52601; File No. SR-CHX-2005-24]

 
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Odd-Lot Order Processing Fees

October 13, 2005.
    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 1, 2005, 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 prepared by CHX. CHX has 
designated the proposed rule change as establishing or changing a due, 
fee, or other charge imposed by the Exchange pursuant to Section 
19(b)(3)(A)(ii) 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 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)(ii).
    \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

    CHX, pursuant to Rule 19b-4 of the Act, proposes to amend its 
Participant Fee Schedule (the ``Fee Schedule'') to modify the order 
processing fees charged for odd-lot transactions.

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 current Fee Schedule, the Exchange charges its members 
for transaction and order processing fees.\5\ These charges are denoted 
in the Fee Schedule according to the type of order and, in certain 
cases, the type of issue being traded. The Exchange's order processing 
fees include a fee for the processing of odd-lot orders, subject to a 
monthly maximum. The odd-lot order processing fees have not been 
amended since 1991, whereas other order processing and transaction fees 
have consistently been updated.
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    \5\ The Exchange has confirmed that it assesses order processing 
fees only against its members and not against non-members. Persons 
holding trading permits are ``members'' for the purposes of the Act, 
which CHX characterizes as ``participants.'' Telephone conversation 
between Leah Mesfin, Special Counsel, Division of Market Regulation, 
Commission, and Kathleen M. Boege, Vice President & Associate 
General Counsel, CHX, on September 26, 2005.
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    In this proposal, the Exchange seeks to update the odd-lot order 
processing fee by decreasing the per trade fee to $0.30 per trade, 
subject to an increased monthly maximum of $800.00. Additionally, the 
proposal would eliminate the existing order processing fee exemption 
for odd-lot orders in the stocks comprising the Standard & Poor's 500 
Stock Price Index. The Exchange has represented that these fees are 
charged only to members.
    Finally, this proposal deletes a reference to a transaction fee 
exemption for transactions that take place during the ``E-Session,'' 
which was an extended trading session from 3:30 p.m. to 5:30 p.m., 
Central Time. When the Exchange eliminated this trading session, the 
Exchange amended its rules to delete references to the E-Session. 
Accordingly, this remaining provision of the Fee Schedule is obsolete.
2. Statutory Basis
    CHX believes that the proposed rule change is consistent with 
Section 6(b)(4) of the Act \6\ in that it provides for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members.
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    \6\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    CHX 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.

II. 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)(ii) of the Act \7\ and subparagraph (f)(2) of Rule 19b-4 
thereunder \8\ because it establishes or

[[Page 61163]]

changes a due, fee, or other charge 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.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 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 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 Number SR-CHX-2005-24 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.
    All submissions should refer to File Number SR-CHX-2005-24. 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. Copies of such 
filing also will be available for inspection and copying at the 
principal office of 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-2005-24 and should be submitted on or before November 10, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
 [FR Doc. E5-5786 Filed 10-19-05; 8:45 am]

BILLING CODE 8010-01-P