[Federal Register Volume 62, Number 237 (Wednesday, December 10, 1997)]
[Notices]
[Pages 65113-65114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32310]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39395; File No. SR-CSE-97-12]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by The Cincinnati Stock Exchange,
Inc., Relating to Transaction Credits
December 3, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934, 15 U.S.C. Sec. 78s(b)(1) (``Act''), notice is hereby given that
on November 13, 1997, The Cincinnati Stock Exchange, Incorporated
(``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
CSE.\1\ The Commission is publishing this notice to solicit comments on
the proposed rule change from interested persons.
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\1\ On November 19, 1997, the Exchange submitted Amendment No. 1
to the filing. See letter from Adam W. Gurwitz, Vice President and
Secretary, CSE, to Marie Ito, Special Counsel, Division of Market
Regulation, Commission, dated November 19, 1997.
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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 schedule of fees in order to
provide a transaction credit for Tape B transactions.\2\
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\2\ ``CTA Network B'' is commonly known as Tape B, and is
defined in the Consolidated Tape Association Plan as ``the
[Consolidated Tape] System as utilized to make available `CTA
Network B information' (that is, last sale price information related
to Network B Eligible Securities).'' The Consolidated Tape
Association Plan further defines ``Network B Eligible Securities''
to mean securities ``admitted to dealings on the [American Stock
Exchange], [Boston Stock Exchange], [Chicago Board Options
Exchange], [Chicago Stock Exchange], CSE, [Pacific Exchange],
[Philadelphia Stock Exchange] or on any other exchange, but not also
admitted to dealings on [the New York Stock Exchange].'' CTA Plan,
at 1-3.
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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 CSE 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 CSE has prepared summaries, set forth in sections
(A), (B), and (C) below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is implementing a credit for transactions in all Tape
B securities in order to create an incentive for members to trade such
securities on the Exchange. The Exchange believes the credit is a
logical next step in its efforts to remain the low-cost provider of
exchange services in the National Market System. Members will be
credited on a pro rata basis, based upon the percentage of tape B
transaction market share captured by the Exchange
[[Page 65114]]
in a given quarter. The new credit is delineated in Exhibit A.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the Act
in general, and furthers the objectives of Section 6(b)(5) in
particular in that it is designed to promote just and equitable
principles 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. It is also
consistent with Section 6(b)(4) in that it is designed to provide for
the equitable allocation of reasonable dues, fees, and other charges
among Exchange members by crediting members on a pro rata basis.\3\
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\3\ The Commission notes that the filing may raise questions
concerning payment for order flow. To the extent that it does raise
such issues, exchange members should consider any associated
disclosure obligations, namely pursuant to Rules 10b-10 and 11Ac1-3
under the Act, 17 CFR 240.10b-10 and 17 CFR 240.11Ac1-3,
respectively.
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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 inappropriate 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 solicited in connection with the proposed
rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act and subparagraph (e)(2) of Rule 19b-4 thereunder
because it constitutes or changes a due, fee, or other charge imposed
by the Exchange. At any time within 60 days of the filing of such
proposed 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 purposes of the Act.
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. Sec. 552, will be available for inspection and copying in
the Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such filings will also be available
for inspection and copying at the principal office of the CSE. All
submissions should refer to File No. SR-CSE-97-12 and should be
submitted by December 31, 1997.
For the Commission, by the Division of Market Regulation,
pursuant to the delegated authority.\4\
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\4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
Exhibit A
Proposed Rule Change
The Cincinnati Stock Exchange, Incorporated
Additions are italicized
Rule 11.10 National Securities Trading System Fees
A. Trading Fees.
a.--(1) No Change.
(j) Tape ``B'' Transactions. The CSE will not impose a
transaction fee on Consolidated Tape ``B'' securities. In addition,
Members will receive a pro rata transaction credit based on the
following schedule:
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Percentage
of Tape B
Average quarterly exchange Tape B transaction market share revenue
credited
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1-2.99%.................................................... 10
3-4.99%.................................................... 25
5-6.99%.................................................... 30
7% and greater............................................. 40
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(k)--(n) No Change.
B. Membership Fees.
No Change.
[FR Doc. 97-32310 Filed 12-9-97; 8:45 am]
BILLING CODE 8010-01-M
