Document ID: SEC-2007-0761-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Chicago Stock Exchange, Inc.
Posted Date: 2007-06-01T04:00Z

[Federal Register: June 1, 2007 (Volume 72, Number 105)]
[Notices]               
[Page 30647-30648]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01jn07-124]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55811; File No. SR-CHX-2007-08]

 
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Order Approving Proposed Rule Change To Expand Its Price Manipulation 
Rule To Address Additional Instances of Improper Behavior

May 24, 2007.
    On March 21, 2007, the Chicago Stock Exchange, Inc. (``CHX'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change, pursuant to Section 19(b)(1) 
of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ to amend its rule relating to price manipulation. The 
proposed rule change was published for comment in the Federal Register 
on April 20, 2007.\3\ The Commission received no comments on the 
proposal. This order approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 55625 (April 12, 
2007), 72 FR 19998.
---------------------------------------------------------------------------

I. Description of the Proposal

    The Exchange seeks to amend its rule relating to price manipulation 
to

[[Page 30648]]

address two separate instances of improper activity: (1) Manipulative 
conduct consisting of a single event (in addition to a series of 
events, as the current rule contemplates) and (2) manipulation based 
upon the entry of orders as opposed to that based solely upon the entry 
of trades. The proposal would also expand the rule to address conduct 
by persons associated with a participant firm, in addition to the 
firm's partners, directors, officers and registered employees.

II. Discussion

    After careful review, the Commission finds that CHX's proposal to 
amend its rule relating to price manipulation is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to a national securities exchange \4\ and, in particular, 
the requirements of Section 6 of the Act \5\ and the rules and 
regulations thereunder. The Commission believes that these changes 
would appropriately establish that improper price manipulation could 
occur upon the entry of orders at successively higher or lower prices, 
not just upon the execution of trades at successively higher or lower 
prices. Additionally, the Commission believes that these changes would 
appropriately establish that improper price manipulation could occur 
with a single trade or order at a price higher or lower than the 
market.
---------------------------------------------------------------------------

    \4\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f.
---------------------------------------------------------------------------

III. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\6\ that the proposed rule change (SR-CHX-2007-08) be, and it 
hereby is, approved.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-10554 Filed 5-31-07; 8:45 am]

BILLING CODE 8010-01-P