[Federal Register Volume 60, Number 28 (Friday, February 10, 1995)]
[Notices]
[Page 8102]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3370]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35335; File No. SR-CHX-94-23]
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Order Granting Approval to Proposed Rule Change Relating to Odd-Lot
Transactions
February 6, 1995.
On November 10, 1994, the Chicago Stock Exchange, Inc. (``CHX'' or
``Exchange'') submitted to the Securities and Exchange Commission
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'')\1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to permit differentials to be
charged for certain odd-lot trades..
\1\15 U.S.C. Sec. 78s(b)(1) (1988).
\2\17 CFR 240.19b-4 (1993).
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The proposed rule change was published for comment in Securities
Exchange Act Release No. 35048 (December 2, 1994), 59 FR 63844
(December 9, 1994). No comment letters were received.
Currently, Article XXXI, Rule 9 dealing with execution of odd-lot
orders provides that odd-lots must be executed at the best bid or
offer, similar to round lot executions. The rule does not permit odd-
lot specialists to charge differentials. The rule change allows the
Committee on Floor Procedure to determine that a differential may be
charged for: (1) an odd-lot ``seller's option'' trade,\3\ (2) an odd-
lot order for cash or ``next day'' delivery, (3) an odd-lot order for
additional settlement periods, and (4) an odd-lot order in an issue in
which a differential is charged in the primary market. If the Committee
on Floor Procedures determines to allow a differential to be charged
under number 1, 2, or 3 above, all CHX odd-lot specialists may charge
differentials under the specified condition. The Committee on Floor
Procedures may also determine that the primary market is charging a
differential in a particular security and allow the CHX specialist in
the security also to charge a differential.
\3\A ``seller's option'' trade is defined in Article XX, Rule
9(c) of the CHX Rules as one for delivery within the time specified
in the option.
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The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange, and, in
particular, with the requirements of Section 6(b).\4\ In particular,
the Commission believes the proposal is consistent with the Section
6(b)(5) requirements that the rules of an exchange be designed to
promote just and equitable principles of trade, to remove impediments
and to perfect the mechanism of a free and open market and a national
market system, and in general, to protect investors and the public
interest.
\4\15 U.S.C. Sec. 78f(b) (1988).
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The Commission believes that the proposed rule change to allow
differentials to be charged on specified odd-lot securities will make
the rules of the Exchange consistent with those of the other securities
exchanges.\5\ In addition, the rule change will allow the CHX to
authorize the charging of a differential in a security when the primary
market is charging a differential in that security. This provision will
ensure that the CHX market makers will be allowed to effect executions
at competitive prices, which will contribute to the maintenance of a
fair and orderly market in those securities trading on the primary
market with a differential.
\5\See, e.g., NYSE Rule 124(B).
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\6\ that the proposed rule change (SR-CHX-94-23) is approved.
\6\15 U.S.C. Sec. 78s(b)(2)(1988).
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\7\
\7\17 CFR 200.30-3(a)(12) (1993).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-3370 Filed 2-9-95; 8:45 am]
BILLING CODE 8010-01-M
