Document ID: SEC-2006-0704-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Chicago Stock Exchange, Inc.
Posted Date: 2006-06-01T04:00Z

[Federal Register: June 1, 2006 (Volume 71, Number 105)]
[Notices]               
[Page 31241-31242]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01jn06-119]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53859; File No. SR-CHX-2006-18]

 
Self-Regulatory Organization; Chicago Stock Exchange, Inc.; 
Notice of Filing of Proposed Rule Change Waiving a Notice Provision 
Relating to the Renewal of Trading Permits

May 24, 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 May 10, 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. 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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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its rules to waive for 2006 the 60-
day notice requirement relating to the cancellation of trading permits 
that were issued as a result of the Exchange's demutualization. The 
text of this proposed rule change is available on the Exchange's Web 
site at http://www.chx.com/rules/proposed_rules.htm 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 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.

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

1. Purpose
    At the time of the Exchange's demutualization on February 9, 2005, 
the Exchange issued trading permits to each member that held a CHX 
membership on the previous day. Pursuant to CHX Article II, Rule 3, 
each of these trading permits had a one-year term (through February 8, 
2006) and was to be automatically renewed at the end of that term for 
another year (through February 8, 2007), unless the participant \3\ 
gave the Exchange at least 60 days' notice that the trading permit 
should be allowed to expire.
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    \3\ See CHX Article I, Rule 1(l) for the definition of a 
``participant.''
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    Although some Exchange participants that wanted certain trading 
permits to expire provided the 60 days' notice contemplated by the 
Exchange's rules, a few participants did not. Because this is the first 
year of this new requirement and it appears to have created confusion 
among some of the Exchange's participants, the Exchange believes that 
it would be appropriate to waive the 60-day notice requirement in 2006. 
Therefore, the Exchange proposes Interpretation and Policy .01 to CHX 
Article II, Rule 3, which would allow for 2006 a trading permit to 
expire if a participant provided notice of waiver of renewal with 
respect to such trading permit during the 60 days preceding February 9, 
2006, even though the participant did not provide the full 60 days' 
prior notice required by the Exchange's rules.
2. Statutory Basis
    The CHX believes that the proposal 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.\4\ The CHX believes 
that the proposal is consistent with Section 6(b)(5) of the Act \5\ in 
that it is designed to promote just and equitable principles of trade, 
to remove impediments to, and perfect the mechanism of, a free and open 
market and a national market system, and, in general, to protect 
investors and the public interest by permitting the Exchange to waive, 
on a one-time basis, a rule provision relating to the renewal of 
trading permits that caused confusion among some of the Exchange's 
participants.
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    \4\ 15 U.S.C. 78(f)(b).
    \5\ 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.

[[Page 31242]]

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) by order approve such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be 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 e-mail to rule-comments@sec.gov. Please include 

File Number SR-CHX-2006-18 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-2006-18. 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 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 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 CHX. 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-2006-18 and should be submitted on or before June 22, 
2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-8437 Filed 5-31-06; 8:45 am]

BILLING CODE 8010-01-P