[Federal Register Volume 63, Number 140 (Wednesday, July 22, 1998)]
[Notices]
[Pages 39319-39320]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19441]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40202; File No. SR-CHX-98-15]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Chicago Stock Exchange, Inc. Relating to Specialists'
Payment of Listing Fees
July 14, 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 June 16, 1998, the Chicago Stock Exchange, Incorporated (``CHX'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') 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 add Article XXX, Rule 20A in order to
establish that Specialists, Co-Specialists and Relief Specialists may
not pay listing fees for any issuing corporation for which they act in
such capacity. The text of the proposed rule change is available at the
Office of the Secretary, the CHX, and at the Commission.
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 CHX 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 CHX 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 20A to Article XXX to
establish that Specialists, Co-Specialists and Relief Specialists may
not pay listing fees, including initial and maintenance fees, for any
issuing corporation for which they act in such capacity.
The purpose of the proposed rule change is to avoid situations in
which either an actual or apparent conflict of interest may arise. A
Specialist has an obligation to maintain a free and open market in an
issue. In order to maintain the integrity of the market, Specialists
must remain independent of issuers. The Exchange has already
established rules that seek to ensure that independence. For example,
Article XXX, Rule 23 prohibits Specialists from engaging in any
business transactions with the issuer of exclusive issues. Also,
Interpretation .01 to Article XXXVIII,
[[Page 39320]]
Rule 23 contains a section on the relationship between company
officials and Specialists designed to ensure that the relationship is
appropriate. Consistent with that goal, the Exchange seeks to impose a
broad restriction that Specialists cannot pay listing fees for any
issuer, whether the issue is exclusive or not. The Exchange believes
that the proposed rule change will help ensure that there are no
incentives on the part of issuers of Specialists that may jeopardize or
call into question the independence of the market.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6 of the Act,\3\ in general, and furthers the objectives
of Section 6(b)(5) of the Act,\4\ in particular, in that it is designed
to perfect the mechanisms of a free and open market and a national
market system, and to protect investors and the public interest.
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\3\ 15 U.S.C. 78f.
\4\ 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 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
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 such 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, 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 submissions, 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, 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-98-15 and should be submitted by August 12,
1998.
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. 98-19441 Filed 7-21-98; 8:45 am]
BILLING CODE 8010-01-M
