[Federal Register Volume 59, Number 60 (Tuesday, March 29, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7281]
[[Page Unknown]]
[Federal Register: March 29, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33798; File No. SR-CHX-93-23]
Self-Regulatory Organizations; Filing of Proposed Rule Change by
the Chicago Stock Exchange, Inc. (``CHX'') Relating to Price Protection
of Limit Orders
March 22, 1994.
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
September 30, 1993, the Chicago Stock Exchange, Inc. (``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.
I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The CHX requests permanent approval of its proposed rule change
relating to price protection of limit orders.\1\ The rule change
provides primary market protection to certain limit orders trading at
the limit price in a primary market's after-hours trading session.\2\
On February 1, 1994, the CHX's pilot program was extended until April
30, 1994.\3\
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\1\Concurrently with this notice, the Commissions also
publishing for comment proposals submitted by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc., the Boston Stock
Exchange, Inc., the Philadelphia Stock Exchange, Inc. and the
Pacific Stock Exchange, Inc., to request permanent approval for
their respective programs which provide for executions of securities
after regular trading hours. See File Nos. SR-NYSE-93-50; BSE-93-24;
SR-Amex-93-15; SR-Phlx-94-8; and SR-PSE-94-2.
\2\On June 13, 1991, the Commission approved, on a pilot basis,
File No. SR-MSE-91-11, which amended CHX Rule 37 (in 1991, the CHX
was named the Midwest Stock Exchange or MSE). See Securities
Exchange Act Release No. 29297 (June 13, 1991), 56 FR 28191 (June
19, 1991) (order approving File No. SR-56 FR 28191 (June 19, 1991)
(order approving File No. SR-MSE-91-11) (MSE Approval Order). The
CHX procedures provide primary market protection for customer GTX
orders (good until canceled, executable in the afternoon session) in
securities listed on the NYSE and on the Amex and traded during the
after-hours sessions of those Exchanges. The New York Stock Exchange
(``NYSE'') initiated its Off-Hours trading (``OHT'') Crossing
Sessions in June 1991. See Securities Exchange Act Release No. 29237
(May 24, 1991), 56 FR 24853 (May 31, 1991) (approving File Nos. SR-
NYSE-90-52 and NYSE-90-53). The American Stock Exchange, Inc.
(``Amex'') established an after-hours trading facility in August
1991. See Securities Exchange Act Release No. 29515 (August 2,
1991), 56 FR 37736 (August 8, 1991) (approving File No. SR-Amex-91-
15). The Commission approved extensions of the NYSE, Amex and CHX
pilots, as well as pilots by the other regional exchanges until
January 31, 1994 and further extended the pilots until April 30,
1994. See Securities Exchange Act Release Nos. 32365 (May 25, 1993),
58 FR 31560 (June 3, 1993), and 33562 (February 8, 1994), 59 FR 5792
(February 8, 1994).
\3\See Securities Exchange Act Release No. 33562, supra note 2.
File No. SR-CHX-93-23 requested both an extension and permanent
approval of the proposal relating to the price protection of limit
orders. This notice concerns the CHX's permanent approval request.
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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 request permanent
approval of the Exchange's price protection of limit orders based on
after-hours prints in a primary market. The proposed change requires
that Exchange specialists provide primary market protection for those
limit orders entered during the Exchange's primary trading session
which are designated as executable after the close of the regular
Exchange auction market trading session, known as ``GTX'' orders
(``good until cancelled, executable in the afternoon session'').\4\
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\4\The Exchange is open for business for two trading sessions
during each business day. The first trading session (the Primary
Trading Session) is conducted on the Floor of the Exchange from 8:30
a.m. to 3 p.m., Central time, Monday through Friday. The second
session (the Secondary Trading Session) is conducted through the
Portfolio Trading System, pursuant to the provisions of Article XX
from 3:30 p.m. to 5 p.m., Central time, Monday through Friday. The
Floor of the Exchange is closed during the Secondary Trading
Session. See CHX Article IX, rule 10.
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The Exchange provided the Commission with an updated report
describing the Exchange's experience with the new rule during the
period of January 1, 1993, through September 1, 1993, with a summary
review covering the entire pilot program from June 13, 1991, through
September 1, 1993.\5\ The Exchange has already provided much of the
information requested in monthly reports and has provided all requested
information in a single report to the Commission dated April 30, 1993,
covering data collected through January 1, 1993.\6\ The Commission
requested in its order extending the pilot until April 30, 1994, that
the Exchange submit to the Commission by March 15, 1994, an updated
report concerning the pilot activity through February 28, 1994. This
updated report will assist the Commission in considering the Exchange's
request for permanent approval prior to the April 30, 1994 expiration
of the pilot program.
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\5\See letter from David T. Rusoff, Attorney, Foley & Lardner,
to Diana Luka-Hopson, Branch Chief, Commission, dated September 30,
1993.
\6\See letter from Daniel J. Liberti, Associate Counsel, MSE, to
Diana Luka-Hopson, Branch Chief, Commission, dated April 30, 1993.
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2. Statutory Basis
The proposed rule change is consistent with Sections 6(b)(5) and
11A of the Act in that it is designed to promote just and equitable
principles of trade, perfect the mechanism of a free and open national
market system, and, in general, further investor protection and the
public interest in fair and orderly markets on national securities
exchanges.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that no burdens will be placed on competition
as a result of the proposed rule change.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants or Others
No comments were received on the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
Within 35 days of the date of 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, NW., Washington, DC 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, NW.,
Washington, DC 20549. Copies of such filing will also be available for
inspection and copying at the principal office of the CHX. All
submissions should refer to File No. SR-CHX-93-23 and should be
submitted by April 19, 1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-7281 Filed 3-28-94; 8:45 am]
BILLING CODE 8010-01-M
