Document ID: SEC-2011-1421-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Stock Exchange, Inc.
Posted Date: 2011-09-21T04:00Z

[Federal Register Volume 76, Number 183 (Wednesday, September 21, 2011)]
[Notices]
[Pages 58553-58555]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-24174]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65342; File No. SR-CHX-2011-28]

Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Retroactively Waive Its Order Cancellation Fee for the Period of 
September 1 to September 9, 2011 (Inclusive)

September 14, 2011.
    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 12, 2011, the Chicago Stock Exchange, Inc. (``CHX'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the CHX. CHX has filed this 
proposal pursuant to Exchange Act Rule 19b-4(f)(6) \3\ which is 
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\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CHX proposes to amend its Fee Schedule to retroactively waive its 
order cancellation fee for a limited duration. The text of this 
proposed rule change is available on the Exchange's Web site at (http://www.chx.com) and in 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 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.

[[Page 58554]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

 1. Purpose
    Through this proposal, the Exchange seeks to retroactively waive 
the order cancellation fees as provided in Section E.8. of its Schedule 
of Fees and Assessments (``Fee Schedule'') for the period of September 
1 to September 9, 2011, inclusive. On August 25, 2011, the Exchange 
filed a proposal to amend its Fee Schedule to replace the prior order 
cancellation fee with a new version, effective September 1, 2011.\4\
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    \4\ Securities Exchange Act Rel. No. 34-65268 (Aug. 25, 2011), 
76 FR 56246 (SR-CHX-2011-25).
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    The Exchange submitted a filing to the Commission on August 25, 
2011 to make these changes with a proposed effective date of September 
1, 2011. The Exchange posted a Legal Notice dated August 26, 2011 
detailing the proposed changes to the cancellation fee and posted it to 
its public Web site.\5\ The Exchange also included the Legal Notice in 
its Weekly Bulletin to Participants dated September 2, 2011 which is 
also posted to its Web site.\6\ Finally, the Exchange posted the rule 
filing requesting the change to its Web site.
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    \5\ Legal Notice L-2011-26 (Aug. 26, 2011).
    \6\ CHX Weekly Bulletin, Issue 2011-35 (Sept. 2, 2011).
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    The Commission published the Notice of Filing and Immediate 
Effectiveness of the proposed cancellation fee change on its public Web 
site on September 6, 2011. Pursuant to Commission rules, the Exchange 
updated the Fee Schedule to reflect the changes in the calculation of 
the order cancellation fee on its Web site on September 8, 2011. Since 
the Fee Schedule was not updated until after the September 1st 
effective date, however, the Exchange believes that certain 
Participants may not have received actual notice of the changes.\7\ 
Such Participants may have incurred cancellation fee charges which they 
otherwise may have avoided by, for example, limiting the number of 
cancellation requests. Given the potential that Participants might have 
incurred charges which they did not anticipate, the Exchange seeks to 
waive the cancellation fees as to all Participants through the close of 
business on Friday, September 9, 2011. Beginning on Monday, September 
12, 2011, order and cancellation activity would give rise to 
cancellation fees if the criteria defined in the Fee Schedule are met. 
The Exchange believes that this proposal recognizes that certain 
Participants may not have received actual notice of the cancellation 
fee changes or fully understood and appreciated the potential impact 
and magnitude of those changes to their firms.
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    \7\ The Exchange also believes that disruptions to Participants 
and their personnel as a result of the recent Hurricane Irene may 
have contributed to the failure to effectively communicate the 
impact of the cancellation fee changes to some Participants.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act in general,\8\ and furthers the objectives 
of Section 6(b)(5) in particular,\9\ in that it is designed to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transaction in 
securities, to remove impediments and perfect the mechanisms of a free 
and open market, and, in general, to protect investors and the public 
interest by retroactively waiving the Exchange's order cancellation fee 
for a limited period of time to ensure that all Participants 
effectively received actual notice of the recent changes to those fees. 
Depending on the nature of the order and cancellation request activity 
of a Participant, the proposed changes could significantly increase the 
cancellation fees imposed upon Participants such that a limited waiver 
is appropriate under these particular circumstances.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Exchange also believes that the proposed rule change is 
consistent with Section 6(b) of the Act \10\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \11\ in particular, in 
that it provides for the equitable allocation of reasonable dues, fees 
and other charges among members and other persons using any facility or 
system which the Exchange operates or controls. The proposed waiver is 
fair and non-discriminatory since it would apply equally to all 
Participants and negates the imposition of fees (as opposed to imposing 
a fee) for prior activity where some Participants may not have fully 
appreciated the substantial nature of the changes to the order 
cancellation fees.
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    \10\ 15 U.S.C. 78f.
    \11\ 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

    No written comments were either solicited or received.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(6) 
thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend 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.

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-2011-28 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-2011-28. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your

[[Page 58555]]

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 Web site viewing and printing 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 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 Number SR-CHX-2011-28 and should be submitted on or before October 
12, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-24174 Filed 9-20-11; 8:45 am]
BILLING CODE 8011-01-P