[Federal Register Volume 61, Number 34 (Tuesday, February 20, 1996)]
[Notices]
[Pages 6402-6404]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3668]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36828; File No. SR-CHX-96-04]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange,
Incorporated Relating to Maximum Monthly Transaction Fees and Other
Processing Fees
February 12, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on January 25, 1996 the
Chicago Stock Exchange, Incorporated (``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 self-regulatory organization. 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).
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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 Section (d) of, and add Section (r)
to, its Membership Dues and Fees Schedule.
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 add an alternative
monthly cap on transaction fees for certain orders. These orders
(except orders of specialists, orders in NASDAQ/NMS Securities,\2\ and
orders of a floor broker acting in the capacity as a principal) \3\
will be charged a maximum monthly transaction fee based on $.45 per 100
average monthly gross round lot shares.\4\ This alternative monthly cap
on transaction fees is in addition to the current monthly cap on
transaction fees of $45,000 per month for firms with a floor broker or
market maker presence on the Floor and $65,000 per month for firms
without a floor broker or market maker presence on the Floor.\5\ The
filing also codifies the Exchange's current practice of rebilling
members and member organizations the Exchange's cost in taking and
processing fingerprints and conducting background checks.
\2\ The Commission notes that the National Association of
Securities Dealers, Inc. refers to such securities as ``Nasdaq
National Market securities.'' In order to maintain consistency
within its rules, however, the Exchange still utilizes the term
``NASDAQ/NMS Securities.'' The Exchange intends to update this
aspect of its rules at a later date. Telephone conversation between
David T. Rusoff, Attorney, Foley & Lardner, and Anthony P. Pecora,
Attorney, SEC (Jan. 16, 1996).
\3\ These orders are subject to different rules concerning
transaction fees. For example, Nasdaq National Market securities are
not charged transaction fees, while transaction fees for specialists
and floor brokers acting as principals are not subject to monthly
caps. See CHX Fee Schedule Secs. (d)(4)-(6).
\4\ For example, transaction fees for a 2,500 share limit order
would be zero for the first 500 shares of the order and $0.0075 per
share for the next 2,000 shares for a total transaction charge of
$15.00 per side (2,000 shares multiplied by $0.0075), with an
average round lot share charge of $0.60 per round lot ($15.00
divided by 25 round lots. If, in a particular month, a firm's total
business consisted solely of 1,000 limit orders for 2,500 shares,
its transaction fees for that month normally would be $15,000.00,
with an average round lot share charge of $0.60 per round lot. This
proposal, however, would reduce the average round lot share charge
to $0.45 per round lot and, in turn, reduce the firm's transaction
fees for that month to $11,250.00.
Although the CHX does not impose a transaction fee on market
orders sent via the CHX's MAX system, the Commission notes that such
orders are nonetheless included in calculating a firm's monthly
average round lot share charge. Telephone conversation between David
T. Rusoff, Attorney, Foley & Lardner, and Anthony P. Pecora,
Attorney, SEC (Jan. 29, 1996).
\5\ See CHX Fee Schedule Secs. (d)(3)(ii)-(iv).
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the Act
\6\ in general and furthers the objectives of Section 6(b)(4) \7\ in
particular in that it provides for the equitable allocation of
reasonable dues, fees, and other charges among the Exchange's members
and other persons using its facilities.
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes the proposed rule change does not impose any
burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change constitutes 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 \8\ and
subparagraph (e) of Rule 19b-4 thereunder.\9\
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4.
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At any time within sixty 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 NW., 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 at
the Commission's Public Reference Section, 450 Fifth Street NW.,
Washington, D.C. 20549. Also, copies of such filing will be available
for inspection and copying at the principal office of the CHX. All
submissions should refer to File No. SR-CHX-96-04 and should be
submitted by March 12, 1996.
For the Commission, by Division of Market Regulation, pursuant
to delegated authority.\10\
\10\ 17 CFR 200.30-3(a)(12).
[[Page 6404]]
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-3668 Filed 2-16-96; 8:45 am]
BILLING CODE 8010-01-M
