Document ID: SEC-2006-0530-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Chicago Stock Exchange, Inc.
Posted Date: 2006-04-24T04:00Z

[Federal Register: April 24, 2006 (Volume 71, Number 78)]
[Notices]               
[Page 21060]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24ap06-105]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53664; File No. SR-CHX-2006-03]

 
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Order Granting Approval to Proposed Rule Change Relating to the 
Prohibition of Trade Shredding

April 17, 2006.

I. Introduction

    On January 24, 2006, the Chicago Stock Exchange, Inc. (``CHX'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change relating to trade shredding. The proposed rule 
change was published for comment in the Federal Register on March 16, 
2006.\3\ The Commission received no comments on the proposal. This 
order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(l).
    \2\ 17 CFR 240. 19b-4.
    \3\ See Securities Exchange Act Release No. 53441 (March 8, 
2006), 71 FR 13642.
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II. Description of the Proposal

    The Exchange proposed to amend its rules to prohibit its 
participants from breaking customer orders into smaller multiple orders 
for the primary purpose of maximizing rebates or other payments to the 
participant without regard for the customer's interest.

III. Discussion and Commission Findings

    The Commission has reviewed carefully the proposed rule change and 
finds that it is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange,\4\ particularly Section 6(b)(5) of the Act which, among other 
things, requires that the rules of a national securities exchange be 
designed to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating 
securities transactions, to remove impediments to and to perfect the 
mechanism of a free and open market and a national market system and, 
in general, to protect investors and the public interest.\5\ The 
Commission believes that the proposed rule change should help eliminate 
the distortive practice of trade shredding, and, therefore, promote 
just and equitable principles of trade.
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    \4\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f). See 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\6\ that the proposed rule change (File No. SR-CHX-2006-03), be and 
hereby is, approved.
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    \6\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-6070 Filed 4-21-06; 8:45 am]

BILLING CODE 8010-01-P