Document ID: SEC-2006-1666-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Chicago Stock Exchange, Inc.
Posted Date: 2006-12-20T05:00Z

[Federal Register: December 20, 2006 (Volume 71, Number 244)]
[Notices]               
[Page 76396-76397]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20de06-137]                         

[[Page 76396]]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54922; File No. SR-CHX-2006-36]

 
Self Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Participant Fees and Credits

 December 12, 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 November 16, 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 Exchange 
has filed this proposal pursuant to Section 19(b)(3)(A) of the Act \3\ 
and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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

    The CHX proposes to amend its Schedule of Participant Fees and 
Credits (the ``Fee Schedule'') to include a fee for receiving orders 
routed through the CHX communications or routing functionality. The 
text of this proposed rule change is available on the Exchange's Web 
site (http://www.chx.com/rules/proposed_rules.htm) at the Exchange's 

Office of the Secretary, 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 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.

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

1. Purpose
    As part of the Exchange's new trading model, the Exchange proposes 
to operate a neutral communications service that allows its 
participants to route orders to any destination connected to the CHX's 
network. This service would allow participants to route orders to 
market makers or other broker-dealers connected to the CHX's network, 
which provide order handling and execution services in the over-the-
counter market; and to other destinations (including order-routing 
vendors) that are connected to the CHX's network.\5\ (To the extent 
that this service routes orders to destinations other than the Exchange 
and its institutional brokers, it is called the Exchange's ``wide area 
network'' or ``WAN''). The WAN would not effect trade executions and 
would not report trades to ``the tape.'' The WAN would be a facility of 
the Exchange.
---------------------------------------------------------------------------

    \5\ Participants would also use this communications service to 
route orders to the Exchange's matching System and to its 
institutional brokers.
---------------------------------------------------------------------------

    This proposal would establish a $5,000 monthly fee for any 
participant that receives orders through the WAN. The monthly fee would 
be prorated in the month that a participant first begins using the 
service, based on the participant's first date of use. The fee would 
not be assessed until January 1, 2007, to allow the full implementation 
of the Exchange's new trading model to be completed before the fee is 
put into effect.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(4) of the Act \6\ in that it provides for the 
equitable allocation of reasonable dues, fees and other charges among 
its members who might seek to receive orders using the WAN service.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78(f)(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule changes 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 Changes Received From Members, Participants or Others

    No written comments were either solicited or received.

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

    Because the foregoing rule change establishes or changes a due, fee 
or other charge applicable only to a member,\7\ it therefore has become 
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(2) thereunder.\9\ At any time within 60 days of the filing of such 
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 purpose of the Act.
---------------------------------------------------------------------------

    \7\ Under Article I, Rule 1(t) of the Exchange's rules, an 
Exchange `` participant'' is considered a ``member'' for all 
purposes under the Act.
    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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 e-mail to rule-comments@sec.gov. Please include File 

Number SR-CHX-2006-36 on the subject line.

Paper Comments

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

All submissions should refer to File No. SR-CHX-2006-36. 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

[[Page 76397]]

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-2006-36 and should be 
submitted on or before January 10, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E6-21655 Filed 12-19-06; 8:45 am]

BILLING CODE 8011-01-P