[Federal Register Volume 63, Number 98 (Thursday, May 21, 1998)]
[Notices]
[Pages 28020-28021]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13502]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39991; File No. SR-CHX-98-10]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange,
Inc., Relating to Membership Dues and Fees
May 13, 1998.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on April 27, 1998, the Chicago Stock Exchange, Inc. (``CHX'' or
``Exchange''), filed with the Securities and Exchange Commission
(`'SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the CHX.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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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 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 Exchange 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 Exchange 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 Proposed of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is twofold. First, the
proposed rule change would reduce the total fixed fee paid by
specialist from $345,000 to $220,000 per month. This reduction reflects
a continuing effort by the Exchange to enhance the effectiveness and
efficiency of its specialists' operations by reducing costs and thereby
encouraging improved competition.
Second, the proposed rule change will expand the type of charges
which are eligible to be offset by transaction credits to include the
cost of rebills--certain fees and charges that are paid by the Exchange
and then ``rebilled'' to the specialists. The Exchange has concluded
that the economic rationale for providing transaction credits as an
offset to specialist fees is equally applicable to rebills and to other
monthly fees owed by specialists, as both charges represent actual
expenses to the specialist. Because there is no relevant distinction
between rebills and other monthly fees, the application of transaction
credits to both types of fees eliminates an artificial barrier and
results in the appropriate recognition of the contribution of the
specialists to overall CHX revenue. This proposed rule change is
particularly important in light of the fact that numerous CHX
specialist units have entirely offset their fixed fees and are again in
a position where their future contribution to overall CHX revenue will
not be recognized.
The Exchange's Finance Committee has determined that after the
proposed changes in fee structure, the Exchange will have ample capital
and resources to continue to fulfill its proscribed duties in its
capacity as a self-regulatory organization and as a registered national
securities exchange.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b)(4) of the Act \3\ in that it provides for the
equitable allocation of reasonable dues, fees and other charges among
its members.
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\3\ 15 U.S.C. 78f(b)(40.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that he proposed rule change will
impose any inappropriate burden on competition.
[[Page 28021]]
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants, or Others
No written comments were solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
The foregoing rule change establishes 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 \4\ and
subparagraph (e) of Rule 19b-4 thereunder.\5\ At any time within 60
days of the filing of the 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.
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\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 17 CFR 240.19b-4(e).
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IV. Solicitation of Comments
Interested person are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. 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 in the
Commission's Public Reference Room, 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 Exchange. All submissions
should refer to File No. SR-CHX-98-10 and should be submitted by June
11, 1998.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-13502 Filed 5-20-98; 8:45 am]
BILLING CODE 8010-01-M
