Document ID: SEC-2008-1165-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Stock Exchange, Inc.
Posted Date: 2008-08-21T04:00Z

[Federal Register: August 21, 2008 (Volume 73, Number 163)]
[Notices]               
[Page 49511-49512]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21au08-97]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58362; File No. SR-CHX-2008-13]

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

August 14, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on August 13, 2008, the Chicago Stock Exchange, Inc. (the ``CHX'' 
or the ``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 CHX proposes to amend its Schedule of Participant Fees and 
Assessments (the ``Fee Schedule'') to provide for trade processing fee 
credits to CHX-registered Institutional Brokers. 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 in the Commission's Public 
Reference Room, 100 F Street, NE., Washington, DC 20549.

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 Change

1. Purpose
    Through this filing, the Exchange would amend its Fee Schedule to 
provide for a credit to institutional brokers relating to trade 
processing fees charged by the Exchange to its participants. Trade 
processing fees are fees charged by the Exchange for transactions that 
are executed and reported to the tape (but not reported to clearing) by 
an institutional broker in an away market (i.e., not the Exchange), but 
which are reported to clearing by the Exchange's systems. The use of 
the Exchange's systems to report trades to clearing, instead of the 
facility on which the trade was executed, is done at the request of the 
institutional broker's customer to simplify the customer's ability to 
access clearing data from a unified source. All clearing transactions 
reported in this manner appear in the Exchange's Regional Trade 
Interface Operations (``RIO'') file along with the customer's trades 
executed on the CHX.
    The Exchange proposes to provide to the originating broker a trade 
processing fee credit equal to 3% per side of the trade processing fees 
received by the Exchange. The Exchange further proposes to provide to 
the broker of credit a trade processing fee credit equal to 6% of the 
trade processing fees received by the Exchange for the portion(s) of 
the transaction handled by the broker of credit. An ``originating 
broker'' is defined as the institutional broker that executes a trade 
on an away market. A ``broker of credit'' is defined as the 
institutional broker that acts as the broker for the ultimate Exchange 
clearing participant. Prior to this filing, trade processing fee 
credits were not paid by the Exchange. This proposed fee schedule 
change would take effect upon filing.
2. Statutory Basis
    The Exchange believes that the rule changes proposed in this 
submission are 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). The proposed rule change is consistent with Section 
6(b)(4) of the Act in that it provides for the equitable allocation of 
reasonable dues, fees and other charges among its members. Moreover, 
the proposed trade processing fee credits will allow the Exchange to 
share trade processing fees with institutional brokers, similar to the 
way it currently shares transaction fees for CHX executions with 
institutional brokers. Prior to this filing, trade processing fees were 
not shared with institutional brokers.

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.

 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

    The foregoing rule change establishes or changes a due, fee or 
other charge imposed by the Exchange and therefore has become effective 
pursuant to Section 19(b)(3)(A) of the Act \3\ and subparagraph (f)(2) 
of Rule 19b-4 thereunder.\4\ 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.
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    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(2).
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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-2008-13 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CHX-2008-13. This file

[[Page 49512]]

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 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 inspection and 
copying 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 publicly available. All 
submissions should refer to File Number SR-CHX-2008-13 and should be 
submitted on or before September 11, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-19353 Filed 8-20-08; 8:45 am]

BILLING CODE 8010-01-P