Document ID: SEC-2014-0970-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Stock Exchange, Inc.
Posted Date: 2014-06-11T04:00Z

[Federal Register Volume 79, Number 112 (Wednesday, June 11, 2014)]
[Notices]
[Pages 33611-33613]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-13554]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72324; File No. SR-CHX-2014-07]

Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Create a Uniform Taxonomy for CHX Rules and To Amend Certain Cross-
References

June 5, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on May 23, 2014, 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 Exchange. 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.

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[[Page 33612]]

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

    CHX proposes to amend CHX rules to create a uniform taxonomy for 
CHX rules and to amend certain cross-references. The Exchange has 
designated this proposal as non-controversial and provided the 
Commission with the notice required by Rule 19b-4(f)(6)(iii) under the 
Act.\3\
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    \3\ 17 CFR 240.19b-4(f)(6)(iii).
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    The text of this proposed rule change is available on the 
Exchange's Web site at (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 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
    The Exchange proposes to adopt a uniform taxonomy for all CHX 
rules. Incidentally, the Exchange proposes to amend certain cross-
references to rules affected by the general taxonomy amendment and to 
correct certain erroneous citations.
    The proposed amendments will improve the logical flow of the rules 
and enable the rules to be referenced and cited more easily. The 
Exchange does not propose to substantively modify the language or 
operation of any of the current CHX rules.
General Taxonomy Amendment
    The Exchange proposes to adopt a typographically-consistent 
taxonomy for all CHX rules (``proposed taxonomy''), which entails the 
following:
     The proposed format for each numbered rule is as follows: 
Lowercase letter, followed by an Arabic numeral, followed by a 
capitalized letter, and followed by a lower case roman numeral (e.g., 
Article 30, Rule 1(a)(1)(A)(i)). When necessary, after this sequence 
has been followed, the rule will continue with a lowercase letter, and 
follow the same order as mentioned above;
     Each letter or numeral will be enclosed with parentheses, 
without any other punctuation mark, except for the following:
     A numeral that is utilized in a manner that is not 
intended to be a distinct paragraph or subparagraph under a given rule, 
shall be marked with ``-'' before and after the numeral and enclosed 
with parentheses (e.g., ``(-i-)''); and
     A numeral representing an Interpretation and Policy shall 
be marked with a period after the numerals and will not be enclosed 
with parentheses (e.g., ``.01''); and
     All interpretative paragraphs under a rule will be listed 
under a section entitled ``Interpretations and Policies'';
    Most of the current CHX rules already follow the proposed taxonomy, 
except for the following rules, which the Exchange now proposes to 
amend to comport to the proposed taxonomy:
     Article 1, Rule 1;
     Article 2, Rule 12;
     Article 3, Rules 1 and 8;
     Article 6, Rules 2, 3, 5, 11, and 12;
     Article 7, Rules 3, 3A, and 4;
     Article 8, Rules 11(b), 13, 14, and 16;
     Article 9, Rules 7, 12, 14, 17, 18(d), and 24(b);
     Article 10, Rules 1 and 3;
     Article 11, Rule 4;
     Article 12, Rules 2 and 8;
     Article 13, Rule 2;
     Article 14, Rule 2;
     Article 16, Rules 1, 2, 3, 6, 8, 9, and 10;
     Article 17, Rule 3;
     Article 20, Rules 1-6, 8, and 10;
     Article 21, Rules 2 and 3; and
     Article 22, Rules 1, 2, 4, 6, 8-16, 17A, 18-22, and 24-27.
Cross-Reference Amendments
    In light of the foregoing general taxonomy amendments, the Exchange 
proposes to make the following cross-reference amendments: \4\
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    \4\ The following list of amendments will only refer to the 
proposed citation to the rule in which the proposed amendment will 
be made.
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     Proposed Article 6, Rule 2(c)(1): Replace cross-reference 
to ``subparagraphs (1) through (5)'' with ``subparagraphs (A) through 
(E).''
     Proposed Article 6, Rule 2(c)(3)(C): Replace cross-
reference to ``subparagraph (2)'' with ``subparagraph (B).''
     Proposed Article 6, Rule 3(b): Replace cross-reference to 
``Rule 2(c)(i)'' with ``Rule 2(c)(1).''
     Proposed Article 6, Rule 11(a)(2)(C): Replace cross-
reference to ``(i) above'' and ``(ii) or (iii) above'' with ``(A) 
above'' and ``(B) or (C) above,'' respectively.
     Proposed Article 7, Rule 4, Interpretation and Policy .01: 
Replace cross-reference to ``paragraph (b)(ii)'' with ``paragraph 
(b)(2).''
     Proposed Article 8, Rule 14, Commentary to Item (M): 
Replace cross-reference to ``item (l), Item (m)'' and ``Item (u)'' with 
``Item (L), Item (M)'' and ``Item (U),'' respectively.
     Proposed Article 9, Rule 24(b)(2)(C): Replace cross-
reference to ``paragraphs (b)(2)(i) or (b)(2)(ii)'' with ``(b)(2)(A) or 
(b)(2)(B).''
     Proposed Article 11, Rule 4, Interpretation and Policy 
.01(p): Replace cross-reference to ``(1)-(15)'' replaced with ``(a)-
(o).''
Erroneous Citations Amendments
    The Exchange also proposes the following amendments to erroneous 
citations: \5\
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    \5\ Id.
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     Proposed Article 3, Rule 3, Interpretation and Policy .01 
contains an erroneous citation to Article 3, ``Rule 3(d),'' which does 
not exist. The Exchange proposes to replace ``Rule 3(d)'' with ``Rule 
3(c),'' which is the paragraph under which the ``60 days' prior 
notice'' is required.
     Proposed Article 6, Rule 2(c)(2)(A) contains an erroneous 
citation to ``Rule 2(i),'' which does not exist. The Exchange proposes 
to replace ``Rule 2(i)'' with ``Rule 2(c)(1),'' which is the paragraph 
which contains the ``definition of a Principal.''
     Proposed Article 6, Rule 2(c)(2)(B) contains an erroneous 
citation to ``paragraph (j)(1)(A),'' which does not exist. The Exchange 
proposes to replace ``paragraph (j)(1)(A)'' with ``paragraph 
(c)(2)(A)(i),'' which is the paragraph under which the business 
activity supervised by a ``Limited Principal--Proprietary Trader'' is 
discussed.
     Proposed Article 6, Rule 11, Interpretation and Policy .03 
contains an incomplete and incorrect citation to current paragraph 
``(a)(3)(i)-(ii),'' as the correct citation is paragraph (a)(2) and 
current paragraph (a)(2) contains three subsections (i)-(iii). In light 
of the proposed taxonomy, the Exchange proposes to replace ``(a)(3)(i)-
(ii) with ``(a)(2)(A)-(C).''
     Proposed Article 20, Rule 10(e)(5) contains an erroneous 
citation to ``Rule 7.10(e)(1),'' which does not exist. The Exchange 
proposes to replace ``Rule 7.10(e)(1)'' with ``paragraph (e)(1),'' 
which is the paragraph under which the review process for clearly 
erroneous transactions are described.

[[Page 33613]]

     Proposed Article 22, Rule 19, Interpretation and Policy 
.06(f) contains a few erroneous citations to ``Rule 19(j).'' The 
Exchange proposes to replace ``Rule 19(j)'' with ``Rule 19(m),'' which 
is the rule that discusses the shareholders requirements referred to 
under Interpretation and Policy .06(f).
Clarifying Amendment
    As a final matter, the Exchange proposes to amend the following 
rules, all of which define different Intermarket Sweep Order modifiers, 
to add ``Article 20'' before each reference to ``Rule 5,'' to clarify 
that the respective rules refer to Article 20, Rule 5 (``Prevention of 
Trade-Throughs''):
     Article 1, Rule 2(b)(1)(A);
     Article 1, Rule 2(b)(1)(E); and
     Article 1, Rule 2(b)(3)(B).
2. Statutory Basis
    The Exchange believes that its proposal to improve the overall 
taxonomy of the current CHX rules by replacing the current rules 
organization with the proposed typographically-consistent format is 
consistent with the requirements of the Act and the rules and 
regulations thereunder that are applicable to a national securities 
exchange, and, in particular, with the requirements of Section 6(b) of 
the Act.\6\ In particular, the proposal is consistent with Section 
6(b)(5) of the Act,\7\ because it would promote just and equitable 
principles of trade, remove impediments to, and perfect the mechanism 
of, a free and open market and a national market system. The Exchange 
believes that the typographically-consistent taxonomy of its rules 
promotes just and equitable principles of trade in that it promotes a 
logical flow of the rules, and allows the rules utilized by the 
Exchange to be referenced and cited more easily. For the same reasons, 
the Exchange believes that the proposed amendments are consistent with 
the protection of investors and the public interest.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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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. The proposed changes to 
improve the overall taxonomy of the current CHX rules by replacing the 
current rules organization with the proposed typographically-consistent 
prefix format contributes to the protection of investors and the public 
interest by making the CHX rules easier to understand, and reference. 
Since the Exchange does not propose to substantively modify the 
language of its rules, the proposed changes will not impose any burden 
on competition.

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 from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(ii) of the Act \8\ and 
subparagraph (f)(6) of Rule 19b-4 \9\ thereunder.
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    \8\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of 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 the 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend the change in 
the rules of the self-regulatory organization made thereby, if it 
appears to the Commission that such action is: (i) Necessary or 
appropriate in the public interest; (ii) for the protection of 
investors; or (iii) otherwise in the furtherance of the purposes of the 
Act. If the Commission takes such action, the Commission shall 
institute proceedings to determine whether the proposed rule should be 
approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposal 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 email to rule-comments@sec.gov. Please include 
File No. SR-CHX-2014-07 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549.

All submissions should refer to File No. SR-CHX-2014-07. This file 
number should be included on the subject line if email 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 changes 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 
10:00 a.m. and 3:00 p.m. Copies of the 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 No. SR-CHX-2014-07 and should be 
submitted on or before July 2, 2014.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-13554 Filed 6-10-14; 8:45 am]
BILLING CODE 8011-01-P