Document ID: SEC-2006-0261-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Chicago Stock Exchange, Inc.
Posted Date: 2006-03-01T05:00Z

[Federal Register: March 1, 2006 (Volume 71, Number 40)]
[Notices]               
[Page 10577-10579]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01mr06-125]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53351; File No. SR-CHX-2006-06]

 
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto To Incorporate Certain Examination Fees

February 22, 2006.
    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 February 8, 2006, 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 the CHX. On February 
17, 2006, the CHX filed Amendment No. 1 to the proposed rule change.\3\ 
The CHX filed the proposal pursuant to Section 19(b)(3)(A)(ii) of the

[[Page 10578]]

Act \4\ and Rule 19b-4(f)(2) thereunder,\5\ which renders the proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change, as 
amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange clarified the scope of the 
Series 7A Examination fee in the proposed rule text and made minor 
technical changes with respect to the purpose of the proposal.
    \4\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \5\ 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 Participant Fees and Credits schedule 
(the ``Fee Schedule'') to incorporate the fees charged by the National 
Association of Securities Dealers, Inc. (``NASD'') for examinations 
that certain CHX participants must successfully complete. Below is the 
text of the proposed rule change. Proposed new language is in italics.
PARTICIPANT FEES AND CREDITS
* * * * *
K. Market Regulation and Market Surveillance Fees
* * * * *

                     Fees for NASD-Provided Services
                         [Paid directly to NASD]
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Continuing Education Regulatory Element (Effective January 1,     $75.00
 2006)........................................................
Series 7 Examination..........................................    250.00
Series 7A Examination (includes NYSE development fee).........    250.00
Series 27 Examination.........................................     95.00
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* * * * *
    The text of the proposed rule change, as amended, is also available 
on the Exchange's Internet Web site (http://www.chx.com/ rules/proposed 

--rules.htm), at the principal office of the Exchange, 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 CHX 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 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 Change

1. Purpose
    Under the Exchange's rules, certain CHX Participants \6\ must 
successfully complete the Series 7, 7A, or 27 examinations, which are 
administered by the NASD. Specifically, a Participant, or a person 
associated with a Participant, must successfully complete the Series 7 
examination if he or she (1) accepts orders on the Exchange's trading 
floor from a non-broker-dealer customer; or (2) engages in proprietary 
or agency trading of equities, preferred securities, or convertible 
debt securities, in a location away from the Exchange's trading floor 
on behalf of a firm for which the Exchange is the Designated Examining 
Authority.\7\ Similarly, a Participant must complete the Series 7A 
examination if he or she accepts orders directly from a professional 
customer for execution on the Exchange's trading floor.\8\ Finally, a 
person who is associated with a Participant Firm that is a ``Joint Back 
Office Participant'' \9\ and who is designated as a financial and 
operations principal for that firm must complete the Series 27 
examination.\10\ Through this filing, the Exchange proposes to 
incorporate into the Exchange's Fee Schedule the fees that Exchange 
Participants must pay the NASD for these examinations.
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    \6\ ``Participant'' means any holder of a Trading Permit. A 
Participant shall be considered a ``member'' of the Exchange for 
purposes of the Act. If a Participant is not a natural person, the 
Participant may also be referred to as a ``Participant Firm,'' but 
unless the context requires otherwise, the term Participant shall 
refer to an individual Participant and/or a Participant Firm. See 
CHX Article I, Rule 1(l).
    \7\ See CHX Article VI, Rule 3, Interpretation and Policy .01(d) 
and .02.
    \8\ See CHX Article VI, Rule 3, Interpretation and Policy 
.01(d). For purposes of this requirement, a ``professional 
customer'' includes a bank, trust company, insurance company, 
investment trust, a state or political subdivision thereof, a 
charitable or nonprofit educational institution regulated under the 
laws of the United States or any state, a pension or profit sharing 
plan subject to ERISA or of any agency of the United States or of a 
state or political subdivision thereof, or any person (other than a 
natural person) who has, or who has under management, net tangible 
assets of at least sixteen million dollars. Id.
    \9\ See CHX Article XI, Rule 3A(a) (defining requirements for 
Joint Back Office Participants).
    \10\ See CHX Article VI, Rule 3, Interpretation and Policy 
.01(e).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of Section 6(b) of the Act,\11\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act,\12\ in 
particular, because it is designed to provide for the equitable 
allocation of reasonable dues, fees, and other charges among members of 
the Exchange. The proposal confirms that Exchange Participants must pay 
the NASD for examinations that such Participants must successfully 
complete under the Exchange rules.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 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 on the Proposed 
Rule Change Received From Members, Participants, or Others

    The CHX has neither solicited nor received written comments on the 
proposed rule change.

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

    The foregoing proposed rule change has been designated as a fee 
change pursuant to Section 19(b)(3)(A)(ii) of the Act \13\ and Rule 
19b-4(f)(2) \14\ thereunder. Accordingly, the proposed rule change is 
effective upon filing with the Commission. 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.\15\
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    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \14\ 17 CFR 19b-4(f)(2).
    \15\ The effective date of the original proposed rule change is 
February 8, 2006, and the effective date of Amendment No. 1 is 
February 17, 2006. For purposes of calculating the 60-day period 
within which the Commission may summarily abrogate the proposed rule 
change under Section 19(b)(3)(C) of the Act, the Commission 
considers such period to commence on February 17, 2006, the date on 
which the Exchange filed Amendment No. 1. See 15 U.S.C. 
78s(b)(3)(C).
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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, as amended, is consistent with the Act. Comments may be 
submitted by any of the following methods:

[[Page 10579]]

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-2006-06 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File No. SR-CHX-2006-06. 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 will also be available for inspection and copying at the 
principal office of the Exchange. 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-2006-06 and should be submitted on or before March 22, 
2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-2846 Filed 2-28-06; 8:45 am]

BILLING CODE 8010-01-P