[Federal Register Volume 61, Number 203 (Friday, October 18, 1996)]
[Notices]
[Pages 54472-54473]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-26785]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37811; File No. SR-CSE-96-08]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Cincinnati Stock Exchange Relating to Continuous or
Regular Quotation Obligations
October 11, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on October
3, 1996, the Cincinnati Stock Exchange (``CSE'' 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 self-regulatory organization. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The CSE hereby proposes to issue a reiteration and clarification of
its rules concerning dealer obligations to provide continuous, two-
sided quotations. Members will be notified of this reiteration and
clarification by means of a Regulatory Circular (``Circular'').\1\
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\1\ The text of the Circular may be examined at the places
specified in Item IV, infra.
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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 self-regulatory organization
included statements concerning the purpose of and basis for the
proposed rule change 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 self-regulatory organization
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 purpose of the proposed rule change is to clarify the
obligations of Designated Dealers to provide continuous quotations
during the trading day. The Circular to be disseminated following
approval of the proposal will provide guidance concerning quotation
obligations at the opening and intra-day, during computer systems
problems and unusual market conditions and will delineate enforcement
standards. It will reiterate the obligations of a Designated Dealer to
display a two-sided quotation immediately following the opening of the
security on the primary market, and immediately to reestablish a
quotation if that quotation is taken out during the day as a result of
a transaction. The Exchange will thus reemphasize the
[[Page 54473]]
need for Designated Dealers to maintain continuous, two-sided
quotations throughout the trading day.
The Circular will specify the notification procedures to be
followed in the event of a computer system problem that prevents a
member firm from providing a continuous two-sided quotation. Frequent
systems problems may result in deregistration in certain issues, or
otherwise impact a dealer's status. In addition, the existence of
unusual market conditions will not exempt a dealer from its continuous
quotation obligations. Finally, the Circular will place members on
notice that they will be informed of their compliance status at least
quarterly, and will set forth possible sanctions resulting from non-
compliance.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6 of the Act \2\ in general and Section 6(b)(5) of the Act
in particular in that it is designed to promote just and equitable
principals of trade and 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.
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\2\ 15 U.S.C. 78f(b).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The CSE does not believe that the proposed rule change will impose
any burden on competition that is unnecessary or inappropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received with respect
to the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the 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 the 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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
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 at the
Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such filing will also be available
for inspection and copying at the principal office of the Exchange. All
submissions should refer to File No. SR-CSE-96-08 and should be
submitted by November 8, 1996.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-26785 Filed 10-17-96; 8:45 am]
BILLING CODE 8010-01-M
