[Federal Register Volume 62, Number 140 (Tuesday, July 22, 1997)]
[Notices]
[Pages 39293-39294]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19194]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38842; File No. SR-CSE-97-08]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Cincinnati Stock Exchange,
Inc., Relating to Transaction Fees
July 16, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on July 15, 1997, The
Cincinnati Stock Exchange, Incorporated (``CSE'' 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 CSE.\2\ 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) (1988).
\2\ The proposed rule change was originally submitted on June
27, 1997.
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I. Self-Regulatory Organizations Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange hereby proposes to amend the schedule of fees set
forth in Exchange Rule 11.1010. The text of the proposed rule change is
below. Additions are in italics; deletions are bracketed.
The Cincinnati Stock Exchange, Incorporated
* * * * *
Rule 11.10 National Securities Trading System Fees
A. Trading Fees
(a) Agency Transactions. As in the case for Preferenced
transactions, members acting as an agent will be charged the per share
incremental rates as noted below for public agency transactions:
------------------------------------------------------------------------
Charge per share
Avg. daily share* volume (dollars)
------------------------------------------------------------------------
1 to 250,000......................................... [0.0020] 0.0015
250,001 to 500,000................................... [0.0015] 0.0013
500,001 to 750,000................................... [0.0013] 0.0009
[1,000,001] 750,001 to 1,250,000 [1,500,001]......... [0.0009] 0.0007
1,250,001 to 1,750,000............................... [0.0007] 0.0005
1,750,001 and higher................................. 0
------------------------------------------------------------------------
*Odd-lot Shares Excluded.
(b) No Change.
(c) Agency Order Mix Fee. Agency limit orders shall be charged
based on the percentage of public agency market order shares executed
on the Exchange during the trading month, according to the following
schedule:
------------------------------------------------------------------------
Agency limit order mix fee
Percent market order shares executed (dollars)
------------------------------------------------------------------------
25 and higher.............................. No Charge
20-24.99................................... .005 per share
15-19.99................................... .01 per share
10-14.99................................... .015 per share
Less than 10............................... .02 per share
------------------------------------------------------------------------
(c)-(e) To be renumbered (d)-(f).
[(f) Maximum Trade Charge. The maximum charge per firm for any
single transaction shall be $150.00 except for crosses and meets.]
(g) Proprietary (principal) Transactions
(1) All Designated Dealers, except those acting as Preferencig
Dealers or Contributing Dealers, will be charged [$0.005] $.0025 per
share ([$0.50] $0.25/100 shares) for principal transactions [excluding]
including ITS transactions, with a maximum charge of $3.75 per firm per
side of transaction. [Designated Dealers will be billed $0.005 per
share on outbound ITS trades and $0.0000 per share on inbound ITS
trades. All Designated Dealers' charges are subject to the minimum
charges set forth in paragraph 5 below. Billable shares shall not
exceed 650,000 shares times the number of trading days in any given
month.]
(2) Designated Dealers acting as ``Dealer of the Day'' will be
charged [$0.005] $0.0025 per share ([$0.50] $0.25/100 shares) for
principal transactions.
(3) Contributing Dealers will be charged $0.02 per share ($2.00/100
shares) for principal transactions.
(4) Members executing principal transactions in securities for
which they are not registered as a Designated or Contributing Dealer
will be charged $0.02 per share ($2.00/100 shares).
[(5) Designated Dealers (DD) shall have the following minimum
average per share charge applied to their aggregate monthly DD
transactions using the DD's average volume per trading day:
[[Page 39294]]
------------------------------------------------------------------------
Per share
minimum
Designated dealer's average share volume per day charge
(dollars)
------------------------------------------------------------------------
1 to 2,000,000............................................. 0.0038
2,000,001 and higher....................................... 0.0030]
------------------------------------------------------------------------
(h) Preferenced Transactions. Designated Dealers that are
preferencing transactions are charged for one side of their preferenced
transactions and are subject to the incremental rates as noted below:
------------------------------------------------------------------------
Charge per share
Avg. daily share* volume (dollars)
------------------------------------------------------------------------
1 to 250,000......................................... [$0.0020] $0.0015
250,001 to 500,000................................... [$0.0015] $0.0013
500,001 to 750,000................................... [$0.0013] $0.0009
[1,000,001] 750,001 to 1,250,001 [1,500,001]......... [$0.0009] $0.0007
1,250,001 to 1,750,000............................... [$0.0007] $0.0005
1,750,001 and higher................................. 0
------------------------------------------------------------------------
*Odd-Lot Shares Excluded.
(i)-(n) No Change.
B. Membership Fees.
No Change.
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 CSE 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 CSE has prepared summaries, set forth in sections A,
B and C below, of the most significant parts 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 is changing its fee schedule as part of
its annual budget process. The Exchange's transaction fees have been
reduced in order to retain CSE's position as the low-cost provider of
exchange services. In addition, the Exchange's fees have been revised
in light of recent changes in the National Market System. Specifically,
the Commission's new limit order display rule, in conjunction with
evolving payment for order flow practices, recent changes to the
minimum trading increment and heightened systems demands caused by
these changes have led the Exchange to impose an order mix charge which
will ensure that the Exchange receives a typical industry mix of market
and limit orders.
(2) Basis. The Exchange believes that proposed rule change is
consistent with Section 6(b) of the Act, in general, and furthers the
objectives of Section 6(b)(4), 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.
Specifically, the proposed rule change will reduce transaction fees on
the Exchange, thereby reducing members' costs. The Exchange believes
that these changes will benefit the investing public as members pass
these savings along to their customers. In addition, the proposed rule
change is consistent with Section 6(b)(5) of the Act in that it is
designed to promote just and equitable principles of trade by helping
to ensure that the Exchange receives a typical mix of market and limit
orders.
B. Self-Regulatory Organization's Statement on Burden on Competition
The CSE does not believe that the proposed rule change will impose
any 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 solicited or received with respect to the
proposed rule change.
III. Date Of Effectiveness Of The Proposed Rule Change and Timing For
Commission Action
The Exchange has designated this proposal as establishing or
changing a due, fee or other charge under Section 19(b)(3)(A) of the
Act \3\ and subparagraph (e) of Rule 19b-4,\4\ which renders the
proposed rule change effective on July 15, 1997, the date of receipt of
this filing by the Commission.
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\3\ 15 U.S.C. Sec. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(e) (1991).
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At any time within sixty 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 to 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, 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. Sec. 552, will be available for inspection and copying in
the Commission's Public Reference Room. Copies of such filing will also
be available for inspection and copying at the principal office of the
CSE. All submissions should refer to File No. SR-CSE-97-08 and should
be submitted by August 12, 1997.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\5\
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\5\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-19194 Filed 7-21-97; 8:45 am]
BILLING CODE 8010-01-M
