[Federal Register Volume 62, Number 127 (Wednesday, July 2, 1997)]
[Notices]
[Pages 35866-35870]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17316]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38777; File No. SR-CHX-97-6]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Chicago Stock Exchange, Inc. Relating to Listing and
Trading Standards for Portfolio Depository Receipts
June 26, 1997.
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 March
17, 1997,\1\
[[Page 35867]]
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.
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\1\ On June 4, 1997, the Exchange filed Amendment No. 1 to this
rule filing. Amendment No. 1 serves to supersede entirely the
Exchange's rule filing. Therefore, this notice incorporates
Amendment No. 1 in its entirety. On June 17, 1997 and June 24, 1997,
the Exchange filed Amendment Nos. 2 and 3 respectively; Amendment
No. 3 replaces Amendment No. 2 in its entirety and the substance of
Amendment No. 3 is incorporated into this notice, See letter from J.
Craig Long, Attorney, Foley & Lardner, to Ivette Lopez, Assistant
Director, Market Regulation, Commission, dated May 27, 1997
(``Amendment No. 1'') and letters from David T. Rusoff, Attorney,
Foley & Lardner, to Sharon Lawson, Senior Special Counsel, Market
Regulation, Commission, dated June 13, 1997 (``Amendment No. 2'')
and June 18, 1997 (``Amendment No. 3'') respectively.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to add Rule 25 to Article XXVIII of CHX's
rules relating to the listing and trading of Portfolio Depositary
Receipts (``PDRs'').
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 Exchange proposes to adopt new Rule 25 under Article XXVIII to
accommodate the trading of PDRs, securities which are interests in a
unit investment trust (``Trust'') holding a portfolio of securities
linked to an index, Each Trust will provide investors with an
instrument that (i) closely tracks the underlying portfolio of
securities, (ii) trades like a share of common stock, and (iii) pays
holders of the instrument periodic dividends proportionate to those
paid with respect to the underlying portfolio of securities, less
certain expenses (as described in the Trust prospectus).
Under the proposal, the Exchange may list and trade, or trade
pursuant to unlisted trading privileges, PDRs based on one or more
stock indexes or securities portfolios. PDRs based on each particular
stock index or portfolio shall be designated as a separate series and
identified by a unique symbol. The stocks that are included in an index
or portfolio on which PDRs are based shall be selected by the Exchange,
or by such other person as shall have a proprietary interest in and
authorized use of such index or portfolio, and may be revised as deemed
necessary or appropriate to maintain the quality and character of the
index or portfolio.
In connection with an initial listing, the Exchange proposes that,
for each Trust of PDRs, the Exchange will establish a minimum number of
PDRs required to be outstanding at the time of commencement of Exchange
trading, and such minimum number will be filed with the Commission in
connection with any required submission under Rule 19b-4 for each
Trust. If the Exchange trades a particular PDR pursuant to unlisted
trading privileges, the Exchange will follow the listing exchange's
determination of the appropriate minimum number.
Because the Trust operates on an open-end type basis, and because
the number of PDR holders is subject to substantial fluctuations
depending on market conditions, the Exchange believes it would be
inappropriate and burdensome on PDR holders to consider suspending
trading in or delisting a series of PDRs, with the consequent
termination of the Trust, unless the number of holders remains severely
depressed during an extended time period. Therefore, twelve months
after the formation of a Trust and commencement of Exchange trading,
the Exchange will consider suspension of trading in, or removal from
listing of, a Trust when, in its opinion, further dealing in such
securities appears unwarranted under the following circumstances:
(a) If the Trust on which the PDRs are based has more than 60 days
remaining until termination and there have been fewer than 50 record
and/or beneficial holders of the PDRs for 30 or more consecutive
trading days; or
(b) If the index on which the Trust is based is no longer
calculated; or
(c) If such other event shall occur or condition exists which, in
the opinion of the Exchange, makes further dealings on the Exchange
inadvisable.
A Trust shall terminate upon removal from Exchange listing and its
PDRs will be redeemed in accordance with provisions of the Trust
prospectus. A Trust may also terminate under such other conditions as
may be set forth in the trust prospectus. For example, the sponsor of
the trust (``Sponsor''), following notice to PDR holders, shall have
discretion to direct that the Trust be terminated if the value of
securities in such Trust falls below a specified amount.
Trading of PDRs. Dealings in PDRs on the Exchange will be conducted
pursuant to the Exchange's general agency-auction trading rules. The
Exchange's general dealing and settlement rules will apply, including
its rules on clearance and settlement of securities transactions and
its equity margin rules. Other generally applicable Exchange equity
rules and procedures will also apply, including, among others, rules
governing the priority, parity and precedence of orders and the
responsibilities of specialists.
With respect to trading halts, the trading of PDRs will be halted,
along with the trading of all other listed or traded stocks, in the
event the ``circuit breaker'' thresholds of CHX Article IX, Rule 10A
are reached. In addition, for PDRs tied to an index, the triggering of
futures price limits for the S&P 500 Composite Price Index (``S&P 500
Index''), S&P 100 Composite Price Stock Index (``S&P 100 Index''), or
Major Market Index (``MMI'') futures contracts will not, in itself,
result in a halt in PDR trading or a delayed opening. However, the
Exchange could consider such an event, along with other factors, such
as a halt in trading in S&P 100 Index Options (``OEX''), S&P 500 Index
Options (``SPX''), or MMI Options (``XMI''), in deciding whether to
halt trading in PDRs.
Under the proposed rule change, the Exchange will issue a circular
to members informing them of Exchange policies regarding trading halts
in such securities. The circular will make clear that, in addition to
other factors that may be relevant, the Exchange may consider factors
such as those set forth in Article XXXVI, Rule 19, the Exchange's rule
governing trading halts for Basket trading (except that the term
``Basket'' shall be replaced by ``stock index'') in exercising its
discretion to halt or suspend trading. For a PDR based on an index,
these factors would include whether trading has been halted or
suspended in the primary market(s) for any combination of underlying
stocks accounting for 20% or more of the applicable current index group
value, or whether other unusual conditions or circumstances detrimental
to the maintenance of a fair and orderly market are present.
Disclosure. Proposed Rule 25 of Article XXVIII requires that
members and member organizations provide to all
[[Page 35868]]
purchasers of each series of PDRs a written description of the terms
and characteristics of such securities, in a form approved by the
Exchange, not later than the time a confirmation of the first
transaction in such series of PDRs is delivered to such purchaser. In
this regard, a member or member organization carrying an omnibus
account for a non-member broker-dealer will be required to inform such
non-member that execution of an order to purchase PDRs for such omnibus
account will be deemed to constitute an agreement by the non-member to
make such written description available to its customers on the same
terms as are directly applicable to member and member organizations.
The written description must be included with any sales material on
that series of PDRs that a member provides to customers or the public.
Moreover, other written materials provided by a member or member
organization to customers or the public making specific reference to a
series of PDRs as an investment vehicle must include a statement in
substantially the following form: ``A circular describing the terms and
characteristics of [the series of PDRs] is available from your broker.
It is recommended that you obtain and review such circular before
purchasing [the series of PDRs]. In addition, upon request you may
obtain from your broker a prospectus for [the series of PDRs].''
Additionally, as noted above, the Exchange requires that members and
member organizations provide customers with a copy of the prospectus
for a series of PDRs upon request.
Two existing PDRs, Standard & Poor's Depositary Receipts
(``SPDRs'') and Standard & Poor's MidCap 400 Depositary Receipts
(``MidCap SPDRs''), are traded on the American Stock Exchange
(``Amex'').\2\ CHX is not asking for permission to list SPDRs or MidCap
SPDRs at this time, but rather will trade SPDRs and MidCap SPDRs
pursuant to unlisted trading privileges once the generic listing
standards set forth herein are approved. Pursuant to SEC Rule 12f-5, in
order to trade a particular class or type of security pursuant to
unlisted trading privileges, CHX must have rules providing for
transactions in such class or type of security. The Amex has enacted
listing standards for PDRs, and CHX's proposed rule change is designed
to create similar standards for PDR listing and/or trading on CHX. As
stated above, CHX proposes to trade SPDRs and MidCap SPDRs pursuant to
unlisted trading privileges upon approval of this rule filing.
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\2\ SPDRs and MidCap SPDRs are defined and discussed more fully
below.
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If at a later time CHX and the issuer of the product desire to list
SPDRs and MidCap SPDRs or any other PDRs on the Exchange, the Exchange
will request SEC approval for that listing in a separate proposed rule
change filed pursuant to Section 19(b) of the Act. Additionally, in the
event a new PDR is listed on another exchange using listing standards
that are different than current CHX listing standards or the CHX
listing standards proposed in this filing, the CHX will file a proposed
rule change pursuant to Section 19(b) of the Act to adopt the listing
standard before it trades that PDR pursuant to unlisted trading
privileges.
Notwithstanding the foregoing discussion concerning the
applicability of the Exchange's equity trading rules to PDRs generally,
the Intermarket Trading System (``ITS'') rules will not be applicable
to SPDRs and MidCap SPDRs traded on the CHX pursuant to unlisted
trading privileges until SPDRs and MidCap SPDRs are designated as ITS
Securities. Currently, ITS cannot accommodate trading in a minimum
variation of \1/64\ and ITS has not made a determination that ITS is
applicable to securities trading in \1/64\ths. When such changes are
made, the CHX intends to request that SPDRs and MidCap SPDRs be
designated as ITS Securities. At such time, the ITS rules will apply to
trading in SPDRs and MidCap SPDRs.
The current inapplicability of the ITS rules means, among other
things, that the ITS trade-through rule will not apply. However, the
CHX's BEST Rule, Article XX, Rule 37(a), will still be applicable to
SPDRs and MidCap SPDRs, thereby guaranteeing the execution of certain
agency orders on the basis of the size and price associated with the
best bid (for a sell order) or best offer (for a buy order) among the
American, Boston, Cincinnati, Chicago, New York, Pacific, Philadelphia
and the Intermarket Trading System/Computer Assisted Execution System
quote, which quote is defined in SR-CHX-97-9 as the ``ITS BBO.'' \3\
Because SPDRs and MidCap SPDRs are not trade in all of these market
centers, for purposes of this filing only, the ITS BBO is limited to
those market centers listed above that trade SPDRs and MidCap SPDRs.\4\
For example, if a CHX specialist receives an agency limit order for a
SPDR, so long as all of the eligibility requirements of the BEST Rule
are met, the specialist will be required to execute that order if there
has been a price penetration in the primary market. In addition, if the
Amex specialist is disseminating the best quote for SPDRs, the CHX
specialist will be required to execute eligible agency market orders
for SPDRs at the price quoted on the Amex, even if the CHX specialist
is not, himself, quoting at that price. The CHX SPDR and MidCap SPDR
specialist will have the ability to monitor the current quotations
being disseminated by the Amex specialist on a real-time basis. The
quotations for SPDRs and MidCap SPDRs are disseminated through the
Consolidated Quotation System and are available for viewing by the CHX
specialist at his or her post. Finally, the CHX specialist will have
access to the Amex through the Amex's PER System (albeit through a
correspondent firm). This will enable the CHX specialist to place limit
orders on the Amex specialist's book or send market orders to the Amex
specialist for execution against the Amex specialist's quote. These
factors should minimize the possibility that a CHX originated trade-
through will occur.
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\3\ The Commission notes that SR-CHX-97-9, as amended to remove
the phrase ``size and price associated with the'' from the filing,
has become effective. See Securities Exchange Act Release No. 38772
(June 25, 1997). In addition, CHX represents that it will submit a
separate rule filing pursuant to Section 19(b)(2) of the Act further
amending the BEST Rule to add size and price to the definition of
the ITS/BBO. Phone conversation between David Rusoff, Attorney,
Foley & Lardner, and David Sieradzki, Attorney, Market Regulation,
Commission, on June 17, 1997.
\4\ Under the BEST Rule, Exchange specialists are required to
guarantee executions of all agency market and limit orders for Dual
Trading System issues from 100 up to and including 2099 shares.
Subject to the requirements of the short sale rule, the specialist
must fill all agency market orders at a price equal to or better
than the ITS BBO. For all agency limit orders in Dual Trading System
issues, the specialist must fill the order if: (1) the ITS BBO at
the limit price has been exhausted in the primary market; (2) there
has been a price penetration of the limit in the primary market
(generally known as a trade-through of a CHX limit order); or (3)
the issue is trading at the limit price on the primary market unless
it can be demonstrated that the order would not have been executed
if it had been transmitted to the primary market or the broker and
specialist agree to a specific volume related to, or other criteria
for, requiring a fill.
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With respect to the above discussion concerning disclosure issues,
because SPDRs and MidCap SPDRs will be traded pursuant to unlisted
trading privileges and will not be listed on the CHX at this time, the
CHX does not intend to create its own product description to satisfy
the requirements of proposed Rule 25(c) of Article XXVIII, which
requires members to provide to purchasers, a written description of the
terms and characteristics of SPDRs and MidCap SPDRs in a form approved
by the Exchange. Instead, the CHX will deem a member or member
organization to be
[[Page 35869]]
in compliance with this requirement if the member delivers either (i)
the current product description produced by the Amex from time to time,
or (ii) the current prospectus for the SPDR or MidCap SPDR, as the case
may be. It will be the member's responsibility to obtain these
materials directly from the Amex and/or the distributor of the SPDR and
MidCap SPDR for forwarding to purchasers in the time frames prescribed
by CHX and SEC rules. The CHX will notify members and member
organizations of this requirement in a notice to members.
The remainder of this section of the filing merely provides
background information on SPDRs and MidCap SPDRs. The information,
taken mostly from SR-AMEX-94-52 and SR-AMEX-92-18, describes the
structure and mechanics of SPDRs and MidCap SPDRs, but is not critical
for the SEC's approval of the generic listing standards.
SPDRs and MidCap SPDRs Generally. On December 11, 1992, the
Commission approved Amex Rules 1000 et seq.\5\ to accommodate trading
on the Amex of PDRs generally. The Sponsor of each series of PDRs
traded on the Amex is PDR Services Corporation, a wholly-owned
subsidiary of the Amex. The PDRs are issued by a Trust in a specified
minimum aggregate quantity (``Creation Unit'') in return for a deposit
consisting of specific numbers of shares of stock plus a cash amount.
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\5\ See Securities Exchange Act Release No. 31591 (December 11,
1992), 57 FR 60253 (December 18, 1992).
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The first Trust to be formed in connection with the issuance of
PDRs was based on the S&P 500 Index, known as Standard & Poor's
Depositary Receipts (``SPDRs''). SPDRs have been trading on the Amex
since January 29, 1993. The second Trust to be formed in connection
with the issuance of PDRs was based on the S&P MidCap 400 Index,\6\
known as Standard & Poor's Midcap 400 Depository Receipts (``Midcap
SPDRs'').\7\ The Sponsor of the two Trusts has entered into trust
agreements with a trustee in accordance with Section 26 of the
Investment Company Act of 1940. PDR Distributors, Inc.
(``Distributor'') acts as underwriter of both SPDRs and MidCap SPDRs on
an agency basis. The Distributor is a registered broker-dealer, a
member of the National Association of Securities Dealers, Inc., and a
wholly-owned subsidiary of Signature Financial Group, Inc.
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\6\ The S&P MidCap 400 Index is a capitalization-weighted index
of 400 actively traded securities that includes issues selected from
a population of 1,700 securities, each with a year-end market-value
capitalization of between $200 million and $5 billion. The issues
included in the Index cover a broad range of major industry groups,
including industrials, transportation, utilities, and financials.
\7\ See Securities Exchange Act Release No. 35534 (March 24,
1995), 60 FR 16686 (March 31, 1995).
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SPDRs. The Trustee of the SPDR Trust will have the right to vote
any of the voting stocks held by the Trust, and will vote such stocks
of each issuer in the same proportion as well other voting shares of
that issuer voted.\8\ Therefore, SPDR holders will not be able to
directly vote the shares of the issuers underlying the SPDRs.
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\8\ The Trustees will abstain from voting if the stocks held by
the Trust cannot be voted in proportion as all other shares of the
securities are voted.
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The Trust will issue SPDRs in exchange for ``Portfolio Deposits''
of all of the S&P 500 Index securities, weighted according to their
representation in the Index.\9\ An investor making a Portfolio Deposit
into the Trust will receive a ``Creation Unit'' composed of 50,000
SPDRs.\10\ The price of SPDRs will be based on a current bid/offer
market. Amex has designated \1/64\ths as the minimum fraction for
trading in SPDRs. The CHX has proposed this same minimum variation for
the trading of SPDRs on the CHX. SPDRs will not be redeemable
individually, but may be redeemed in Creation Unit size (i.e., 50,000
SPDRs). Specifically, a Creation Unit may be redeemed for an in-kind
distribution of securities identical to a Portfolio Deposit.\11\ PDR
Distribution Services, Inc., a registered broker-dealer, will act as
underwriter of SPDRs on an agency basis.
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\9\ A Portfolio Deposit also will include a cash payment equal
to a pro rata portion of the dividends accrued on the Trust's
portfolio securities since the last dividend payment by the Trust,
plus or minus an amount designed to compensate for any difference
between the net asset value of the Portfolio Deposit and the S&P 500
Index caused by, among other things, the fact that a Portfolio
Deposit cannot contain fractional shares.
\10\ The Trust is structured so that the net asset value of an
individual SPDR should equal one-tenth of the value of the S&P 500
Index.
\11\ An investor redeeming a Creation Unit will receive Index
securities and cash identical to the Portfolio Deposit required of
an investor wishing to purchase a Creation Unit on that particular
day. Since the Trust will redeem in kind rather than for cash, the
Trustee will not be forced to maintain cash reserves for
redemptions. This should allow the Trust's resources to be committed
as fully as possible to tracking the S&P 500 Index, enabling the
Trust to track the Index more closely than other basket products
that must allocate a portion of their assets for cash redemptions.
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MidCap SPDRs. All orders to create MidCap SPDRs in Creation Unit
size aggregations, which has been set at 25,000, must be placed with
the Distributor, and it will be the responsibility of the Distributor
to transmit such orders to the Trustee.
To be eligible to place orders to create MidCap SPDRs as described
below, an entity or person either must be a participant in the
Continuous Net Settlement (``CNS'') system of the National Securities
Clearing Corporation (``NSCC'') or a Depository Trust Company (``DTC'')
participant. Upon acceptance of an order to create MidCap SPDRs, the
Distributor will instruct the Trustee to initiate the book-entry
movement of the appropriate number of MidCap SPDRs to the account of
the entity placing the order. MidCap SPDRs will be maintained in book-
entry form at DTC.
Payment with respect to creation orders placed through the
Distributor will be made by (1) the ``in-kind'' deposit with the
Trustee of a specified portfolio of securities that is formulated to
mirror, to the extent practicable, the component securities of the
underlying index or portfolio, and (2) a cash payment sufficient to
enable the Trustee to make a distribution to the holders of beneficial
interests in the Trust on the next dividend payment date as if all the
securities had been held for the entire accumulation period for the
distribution (``Dividend Equivalent Payment''), subject to certain
specified adjustments. The securities and cash accepted by the Trustee
are referred to, in the aggregate, as a ``Portfolio Deposit.'' The
Exchange anticipates that the term of the MidCap SPDR Trust will be 25
years.
Issuance of MidCap SPDRs. Upon receipt of a Portfolio Deposit in
payment for a creation order placed through the Distributor as
described above, the Trustee will issue a specified number of MidCap
SPDRs, which aggregate number is referred to as a ``Creation Unit.''
The Exchange anticipates that a Creation Unit will be made up of 25,000
MidCap SPDRs.\12\ Individual MidCap SPDRs can then be traded in the
secondary market like other equity securities. Portfolio Deposits are
expected to be made primarily by institutional investors, arbitragers,
and the Exchange specialist.
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\12\ PDRs may be created in other than Creation Unit size
aggregations in connection with the DTC Dividend Reinvestment
Service (``DRS'').
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The Trustee or Sponsor will make available (1) on a daily basis, a
list of the names and required number of shares for each of the
securities in the current Portfolio Deposit; (2) on a minute-by-minute
basis throughout the day, a number representing the value (on a per
MidCap SPDR basis) of the securities portion of a Portfolio Deposit in
effect on such day; and (3) on a daily basis, the accumulated
dividends, less
[[Page 35870]]
expenses, per outstanding MidCap SPDR.
The Amex has set the minimum fractional trading variation for
MidCap SPDRs at \1/64\ of $1.00. The CHX has proposed this same minimum
variation for MidCap SPDRs.
Redemption of MidCap SPDRs. MidCap SPDRs in Creation Unit size
aggregations will be redeemable in kind by tendering them to the
Trustee. While holders may sell MidCap SPDRs in the secondary market at
any time, they must accumulate at least 25,000 (or multiples thereof)
to redeem them through the Trust. MidCap SPDRs will remain outstanding
until redeemed or until the termination of the Trust. Creation Units
will be redeemable on any business day in exchange for a portfolio of
the securities held by the Trust identical in weighting and composition
to the securities portion of a Portfolio Deposit in effect on the date
a request is made for redemption, together with a ``Cash Component''
(as defined in the Trust prospectus), including accumulated dividends,
less expenses, through the date of redemption. The number of shares of
each of the securities transferred to the redeeming holder will be the
number of shares of each of the component stocks in a Portfolio Deposit
on the day a redemption notice is received by the Trustee, multiplied
by the number of Creation Units being redeemed. Nominal service fees
may be charged in connection with the creation and redemption of
Creation Units. The Trustee will cancel all tendered Creation Units
upon redemption.
Distributions for MidCap SPDRs. The MidCap SPDR Trust will pay
dividends quarterly. The regular quarterly ex-dividend date for MidCap
SPDRs will be the third Friday in March, June, September, and December,
unless that day is a New York Stock Exchange holiday, in which case the
ex-dividend date will be the preceding Thursday. Holders of MidCap
SPDRs on the business day preceding the ex-dividend date will be
entitled to receive an amount representing dividends accumulated
through the quarterly dividend period preceding such ex-dividend date
net of fees and expenses for such period. The payment of dividends will
be made on the last Exchange business day in the calendar month
following the ex-dividend date (``Dividend Payment Date''). On the
Dividend Payment Date, dividends payable for those securities with ex-
dividend dates falling within the period from the ex-dividend date most
recently preceding the current ex-dividend date will be distributed.
The Trustee will compute on a daily basis the dividends accumulated
within each quarterly dividend period. Dividend payments will be made
through DTC and its participants to all such holders with funds
received from the Trustee.
The MidCap SPDR Trust intends to make the DTC DRS available for use
by MidCap SPDR holders through DTC participant brokers for reinvestment
of their cash proceeds. The DTC DRS is also available to holders of
SPDRs. Because some brokers may choose not to offer the DTC DRS, an
interested investor would have to consult his or her broker to
ascertain the availability of dividend reinvestment through that
broker. The Trustee will use the cash proceeds of MidCap SPDR holders
participating in the reinvestment to obtain the Index securities
necessary to create the requisite number of SPDRs.\13\ Any cash
remaining will be distributed pro rata to participants in the dividend
reinvestment.
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\13\ The creation of PDRs in connection with the DTC DRS
represents the only circumstances under which PDRs can be created in
other than Creation Unit size aggregations.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b)(5) of the Act \14\ in that the proposal fosters
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, removes impediments to and
perfects the mechanism of a free and open market and a national market
system and protects investors and the public interest.
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\14\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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 either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
Within 35 days of the 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, 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. 552, will be available for inspection and copying at the
Commission's Public Reference Room. 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-97-6 and
should be submitted by July 23, 1997.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-17316 Filed 7-1-97; 8:45 am]
BILLING CODE 8010-01-M
