95-18960. Self-Regulatory Organizations; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change by the Chicago Stock Exchange, Incorporated Relating to the Implementation of Modified Versions of the SuperMAX System on a ...  

  • [Federal Register Volume 60, Number 148 (Wednesday, August 2, 1995)]
    [Notices]
    [Pages 39465-39469]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 95-18960]
    
    
    
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    SECURITIES AND EXCHANGE COMMISSION
    
    [Release No. 34-36027; File No. SR-CHX-95-15]
    
    
    Self-Regulatory Organizations; Notice of Filing and Order 
    Granting Accelerated Approval of Proposed Rule Change by the Chicago 
    Stock Exchange, Incorporated Relating to the Implementation of Modified 
    Versions of the SuperMAX System on a Pilot Basis
    
    July 27, 1995.
        Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
    
    
    [[Page 39466]]
    (``Act''), 15 U.S.C. Sec. 78s(b)(1), notice is hereby given that on 
    June 29, 1995, the Chicago Stock Exchange, Incorporated (``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. On July 21, 1995, the Exchange submitted Amendment No. 1 
    to the proposed rule change.\1\ The Commission is publishing this 
    notice to solicit comments on the proposed rule change from interested 
    persons.
    
        \1\ See letter from David Rusoff, Foley & Lardner, to Glen 
    Barrentine, Senior Counsel, SEC, dated July 21, 1995. In Amendment 
    No. 1, the Exchange requests that the proposed rule change be 
    considered under 19(b)(2) on one-year pilot basis rather than under 
    19(b)(3)(A) and makes certain clarifying changes to the text of Item 
    I.
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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 subsection (e) and subsection (f) to 
    Rule 37 of Article XX relating to the CHX's MAX System. The text of the 
    proposed rule is as follows [new text is italicized]:
    
    Article XX
    
    Rule 37
    
        (e) The Exchange's Enhanced SuperMAX program shall be an 
    automatic execution program within MAX in which a Specialist may 
    voluntarily choose to participate on a stock-by-stock basis. A 
    Specialist shall decide if his or her stock will be eligible for 
    Enhanced SuperMAX treatment. In the event that a stock is eligible 
    for Enhanced SuperMAX treatment (pursuant to paragraph (e) of this 
    Rule) and SuperMAX treatment (pursuant to paragraph (c) of this 
    Rule) at the same time, the size of the order will determine which 
    program will be followed for execution. An order of 599 shares or 
    less will execute according to the SuperMAX program and an order 
    greater than 599 shares will execute according to the Enhanced 
    SuperMAX program. In the event that a Specialist determines that his 
    stock is eligible for Enhanced SuperMAX and voluntarily chooses to 
    participate in Enhanced SuperMAX, agency market orders up to and 
    including 1099 shares (or such greater size specified by a 
    specialist and approved by the Exchange) in that stock may 
    automatically be stopped and executed in MAX, through the Enhanced 
    SuperMAX program, without any specialist intervention based on the 
    following criteria:
        (1) Stopping. If an agency market order eligible for Enhanced 
    SuperMAX would create either a double up tick (buy order) or double 
    down tick (sell order) if the order was executed at the consolidated 
    best bid or offer (``NBBO'') the Enhanced SuperMAX program will 
    ``stop'' the order. Once stopped, the order will not receive an 
    execution that is worse than the stop price. Notwithstanding 
    anything in the previous sentence to the contrary, agency market 
    orders in markets quoted with a minimum variation (usually \1/8\ 
    spread) will not be stopped. Orders not stopped will be immediately 
    executed based upon the NBBO as the case may be.
        (2) Pricing. Buy Orders stopped under (1) above will be executed 
    as follows:
        (i) If the next primary market sale is equal to or less than the 
    last sale then the stopped order will be executed at such last sale 
    price (subject, however, to the Exchange's block protection policy 
    as set forth in interpretation and policy .06 of Rule 7 of this 
    Article).
        (ii) If the next primary market sale is greater than the last 
    sale then the stopped order will be executed at such next primary 
    market sale price. However, if the next primary market sale is 
    greater than the stop price then the stopped order will be filled at 
    the stopped price (i.e. at the offer).
        Sell orders stopped under (1) above will be executed as follows:
        (iii) If the next primary market sale is equal to or greater 
    than the last sale then the stopped order will be executed at such 
    last sale price (subject, however, to the Exchange's block 
    protection policy as set forth in interpretation and policy .06 of 
    Rule 7 of this Article).
        (iv) If the next primary market sale is less than the last sale 
    then the stopped order will be executed at such primary market sale 
    price. However, if the next primary market sale is less than the 
    stop price then the stopped order will be filled at the stopped 
    price (i.e. at the bid).
        (3) Operating Time. Enhanced SuperMAX will operate each day that 
    the Exchange is open for trading from 8:45 a.m. (C.T.) until the 
    close. In unusual trading situations, individual stocks or all 
    stocks may be removed from Enhanced SuperMAX with the approval of 
    two members of the Committee on Floor Procedure.
        (4) Timing. Orders entered into Enhanced SuperMAX shall, when 
    due a fill under the Enhanced SuperMAX program, be immediately 
    executed without any delay (i.e. 0 seconds).
        (5) Applicability to Odd-Lots. Although an order generated by 
    the Odd-Lot Execution Service (``OLES'') is a professional order 
    (because it is deemed to be for the account of a broker-dealer), it 
    is nonetheless eligible for Enhanced SuperMAX execution if: (i) the 
    issue is on Enhanced SuperMAX, (ii) it is an order for 200 shares or 
    less, and (iii) it is an OLES passively driven, system-generated 
    market order (and not an actively managed order).
        (6) Out of Range. Notwithstanding anything in this paragraph (e) 
    to the contrary, Enhanced SuperMAX will not execute an order at the 
    NBBO if such execution would result in an out of range execution.
        (7) Other. Any eligible order in a stock included in Enhanced 
    SuperMAX which is manually presented at the Specialist post by a 
    floor broker must also be guaranteed an execution by the Specialist 
    pursuant to the criteria set forth in this paragraph (e). In the 
    event that a contra side order which would better an Enhanced 
    SuperMAX execution is presented at the post, the incoming order 
    which is executed pursuant to the Enhanced SuperMAX criteria must be 
    adjusted to the better price.
        (f) The Exchange's Timed Enhanced SuperMAX program shall be an 
    automatic execution program within MAX in which a Specialist may 
    voluntarily choose to participate on the stock-by-stock basis. A 
    Specialist shall decide if his or her stock will be eligible for 
    Timed Enhanced SuperMAX treatment. In the event that a Specialist 
    determines that his or her stock is eligible for Timed Enhanced 
    SuperMAX and voluntarily chooses to participate in Timed Enhanced 
    SuperMAX, agency market orders up to and including 1099 shares (or 
    such greater size as specified by the Specialist and approved by the 
    Exchange) will automatically be executed in MAX, through the Timed 
    Enhanced SuperMAX program, without any Specialist intervention, in 
    accordance with the Enhanced SuperMAX program and rules (as 
    specified in paragraph (e) of this Rule and subparagraphs (1) 
    through (7) thereunder) with the following modification:
        (1) Timer. In the event that an order is stopped pursuant to the 
    criteria described in paragraph (e)(1) of this Rule, such order 
    shall be executed at the stopped price if there are no executions in 
    the primary market at the end of the applicable Time Out Period (as 
    defined below). For purposes of this paragraph (f), the Time Out 
    Period shall be the time specified by the specialist on stock-by-
    stock basis based on the size of the order. Such Time Out Period 
    shall be preselected by a specialist, may be changed by a specialist 
    no more frequently than once a month and may be no less than 30 
    seconds.
    
    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 III 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
        On May 22, 1995, the Commission approved a proposed rule change of 
    CHX that allows specialists on the Exchange, through the Exchange's MAX 
    system, to provide order execution guarantees that are more favorable 
    than those required under CHX Rule 37(a), Article XX.\2\ That approval 
    order 
    
    [[Page 39467]]
    contemplated that the CHX would file with the Commission specific 
    modifications to the parameters of MAX that are required to implement 
    various options available under this new rule.
    
        \2\ See Securities Exchange Act Release No. 325753 (May 22, 
    1995), 60 FR 28007 (May 26, 1995) (File No. SR-CHX-95-08).
    ---------------------------------------------------------------------------
    
        The purpose of the proposed rule change is to set forth two options 
    available under this new rule. One option is merely a reactivation of 
    the Exchange's Enhanced SuperMAX program, a program originally approved 
    by the Commission on a pilot basis in 1991.\3\ Unlike the old pilot 
    program, however, the new Enhanced SuperMAX program will be available 
    starting at 8:45 a.m. instead of 9:00 a.m. This program differs from 
    the Exchange's SuperMAX program is that under this program, certain 
    orders are ``stopped'' at the NBBO \4\ and are executed with reference 
    to the next primary market sale instead of the previous primary market 
    sale.
    
        \3\ See Securities Exchange Act Release No. 30058 (Dec. 10, 
    1991), 56 FR 65765 (Dec. 18, 1991) (order approving SR-MSE-91-12). 
    The pilot program was subsequently extended in Securities Exchange 
    Act Release Nos. 30701 (May 14, 1992), 57 FR 21683 (May 21, 1992) 
    (File No. SR-MSE-92-06); 310238 (Aug. 13, 1992), 57 FR 37856 (Aug. 
    20, 1992) (File No. SR-MSE-92-09); and 31857 (Feb. 12, 1993) 58 FR 
    9227 (Feb. 19, 1993) (File No. SR-MSE-01).
        \4\ The term national best bid or best offer is defined under 
    SEC Rule 11Ac1-2 as the highest bid or lowest offer for a reported 
    security made available by any reporting market center pursuant to 
    Rule 11Ac1-1 or the highest bid or lowest offer for a security other 
    than a reported security disseminated by an over-the-counter market 
    maker in Level 2 or 3 of Nasdaq.
    ---------------------------------------------------------------------------
    
        The other option is a slight variation on the Enhanced SuperMAX 
    program. This other option, the Timed Enhanced SuperMAX program, will 
    execute orders in the same manner as the Enhanced SuperMAX program 
    except that if there are no executions in the primary market after the 
    order has been stopped for a designated time period, the order will be 
    executed at the stopped price at the end of such period. Such period, 
    known as a time out period, will be pre-selected by a specialist on a 
    stock-by-stock basis based on the size of the order, may be changed by 
    a specialist no more frequently than once a month, and may be no less 
    than 30 seconds.
    2. Statutory Basis
        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, to remove impediments and to perfect the mechanism of a free and 
    open market and a national market system, and, in general, to protect 
    investors and the public interest.
    
    B. Self-Regulatory Organization's Statement on Burden on Competition
    
        The proposed rule change will impose no 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. 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. Sec. 552, will be available for inspection and copying at 
    the Commission's Public Reference Section, 450 Fifth Street, N.W., 
    Washington, D.C. 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-95-15 and should be 
    submitted by August 23, 1995.
    IV. Commission's Findings and Order Granting Accelerated Approval of 
    Proposed Rule Change
    
        The Commission has reviewed carefully CHX's proposed rule change 
    and concludes that the proposed rule change is consistent with the 
    requirements of the Act and the rules and regulations thereunder 
    applicable to a national securities exchange, and in particular, with 
    Section 6(b)(5) of the Act.\5\
    
        \5\ 15 U.S.C. 78f(b)(5) (1988 & Supp. V. 1993).
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        The proposed rule change provides for modified versions of the 
    SuperMAX system \6\ (Enhanced SuperMAX and Timed Enhanced SuperMAX). 
    These modified versions will operate as separate systems and will be 
    available to CHX specialists as additions or alternatives to 
    SuperMAX.\7\ Participation in Enhanced SuperMAX and Timed Enhanced 
    SuperMAX will be voluntary for specialists and will apply on a stock-
    by-stock basis for agency market orders of 1,099 shares or fewer in 
    Dual Trading Systems issued.\8\
    
        \6\ SuperMAX is a system that automatically improves executions 
    of small agency market orders from the consolidated best bid or 
    offer according to certain predefined criteria. In 1990, the 
    Commission first approved SuperMAX on a pilot basis. See Securities 
    Exchange Act Release No. 28014 (May 14, 1990), 55 FR 20880 (May 21, 
    1990) (File No. SR-MSE-90-05). In 1993, the Commission approved 
    SuperMAX on a permanent basis. For more detail regarding SuperMAX, 
    see infra note 12 and the accompanying text.
        \7\ The Exchange will file an amendment to the proposed rule 
    change in the near future to codify the procedures with respect to a 
    specialist's ability to make a security eligible for Enhanced 
    SuperMAX and Time Enhanced SuperMAX. A specialist will be permitted 
    to engage and disengage Enhanced SuperMAX and Timed Enhanced 
    SuperMAX for a given stock only once a month. See letter from David 
    Rusoff, Foley & Lardner, to Glen Barretine, Senior Counsel, SEC, 
    dated July 21, 1995.
        \8\ The Dual Trading System of the Exchange allows the execution 
    of both round-lot and odd-lot orders in certain issues assigned to 
    specialists on the Exchange and listed on either the New York Stock 
    Exchange or the American Stock Exchange.
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        Under the proposed rule change, Enhanced SuperMAX and Timed 
    Enhanced SuperMAX would automatically stop a market order if its 
    execution at the consolidated best bid or offer (``BBO'') would create 
    either a double up tick or double down tick. If the execution at the 
    BBO would not result in a double up tick or double down tick, then 
    Enhanced SuperMAX and Timed Enhanced SuperMAX would execute the order 
    at the BBO. Once a security chosen by a specialist for Enhanced 
    SuperMAX and Timed Enhanced SuperMAX is stopped, a buy (sell) order is 
    guaranteed at least the offer (bid) price prevailing at the time of the 
    stop (``stop price'').
        The stopped Enhanced SuperMAX and Timed Enhanced SuperMAX eligible 
    order would be executed based upon the next sale in the primary market 
    according to the execution criteria. The Enhanced SuperMAX and Timed 
    Enhanced SuperMAX algorithm compares the previous last sale price to 
    the next sale price, and considers the direction of the market by those 
    sales prices, to determine the price at which the stopped market order 
    will be filled. The procedures under Enhanced SuperMAX and Timed 
    Enhanced SuperMAX are identical except the stopped order in Timed 
    Enhanced SuperMAX will be executed at the expiration of a specified 
    time period as designated by a specialist.
        Under the proposal, Enhanced SuperMAX and Timed Enhanced SuperMAX 
    would not execute an order at the BBO if such execution would 
    
    [[Page 39468]]
    result in an out-of-range execution.\9\ If a specialist chooses the 
    Enhanced SuperMAX and Timed Enhanced SuperMAX, the criteria for the 
    systems must be followed for all eligible stocks. If a specialist 
    chooses to have Enhanced SuperMAX and Timed Enhanced SuperMAX run 
    concurrently with SuperMAX, then the size of the agency market order 
    would determine which method of execution will be followed. An order of 
    599 shares or fewer will be executed according to SuperMAX rules; an 
    order of 600 shares to 1,099 shares will be executed according to 
    Enhanced SuperMAX and Timed Enhanced SuperMAX rules. An order will 
    never be subject to execution under the rules of both SuperMAX and 
    Enhanced SuperMAX (or Timed Enhanced SuperMAX).
    
        \9\ The term ``out-of-range'' means either higher or lower than 
    the price range in which the security traded on the primary market 
    during a particular trading day.
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        Any eligible order in a stock included in Enhanced SuperMAX or 
    Timed Enhanced SuperMAX that is manually presented at the specialist 
    post by a floor broker also must be guaranteed an execution by the 
    specialist pursuant to the appropriate system criteria. In the unlikely 
    event that a contra side order that would better the Enhanced SuperMAX 
    and Timed Enhanced SuperMAX execution is presented at the post, the 
    specialist must adjust the incoming order that was executed pursuant to 
    the Enhanced SuperMAX or Timed Enhanced SuperMAX criteria. During 
    volatile periods, individual stocks or all stocks may be removed from 
    Enhanced SuperMAX or Timed Enhanced SuperMAX with the approval of two 
    members of the Committee on Floor Procedure.\10\
    
        \10\ When stocks are removed from Enhanced SuperMAX or Timed 
    Enhanced SuperMAX, CHX would broadcast a message through the MAX 
    system indicating that the affected stocks are off Enhanced SuperMAX 
    or Timed Enhanced SuperMAX. Telephone conversation between David 
    Rusoff, Foley & Lardner, and Jennifer Choi, Attorney, Division of 
    Market Regulation, SEC. on July 21, 1995.
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        The Exchange represented that as a result of testing extensively 
    both versions of Enhanced SuperMAX, the Exchange concludes that 
    Enhanced SuperMAX and Timed Enhanced SuperMAX will not have any 
    significant impact upon CHX's systems capacity.\11\
    
        \11\ See letter from David Rusoff, Foley & Lardner, to Glen 
    Barrentine, Senior Counsel, SEC, dated July 21, 1995.
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        In 1991, the Commission approved on a pilot basis Enhanced SuperMAX 
    to run concurrently with SuperMAX, which was on a pilot at that 
    time.\12\ In the initial Enhanced SuperMAX pilot program approval 
    order, the Commission expressed concerns about the possible adverse 
    effects on execution quality of a lack of order exposure.\13\ The 
    Commission also acknowledged, however, that increased order exposure 
    may impose certain economic costs in terms of execution delay and 
    interjection of manual processing. Moreover, the Commission recognized 
    that most of the Exchange's automatic execution systems in effect (at 
    this time) provided executions at the quote only.
    
        \12\ The Exchange sought approval of the Enhanced SuperMAX 
    program to evaluate both Enhanced SuperMAX and SuperMAX systems and 
    determine which system it wanted to implement. In 1993, the Exchange 
    chose to implement SuperMAX rather than Enhanced SuperMAX and sought 
    approval of SuperMAX on a permanent basis. The Commission 
    permanently approved SuperMAX believing that the automated execution 
    feature of SuperMAX would provide a more efficient means of 
    bettering the execution price on a large volume of electronically 
    delivered market orders than through manual processing. The Enhanced 
    SuperMAX pilot expired in 1993 without the Exchange requesting an 
    extension or permanent approval. See Securities Exchange Act Release 
    No. 32631 (July 14, 1993), 58 FR 30969 (July 21, 1993) (File No. SR-
    MSE-93-10) (approving permanently SuperMAX).
        \13\ See Secutiries Exchange Act Release No, 30058 (Dec. 10, 
    1991), 56 FR 65765 (Dec. 18, 1991) (order approving SR-MSE-91-12).
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        In approving the Enhanced SuperMAX feature on a pilot basis, the 
    Commission believed that this proposal was less ideal than SuperMAX, 
    but that the Commission would revisit its concerns in the event that 
    the CHX requested permanent approval. In this regard, the Commission 
    stated that any request for permanent approval must be accompanied by a 
    report containing certain data on the Enhanced SuperMAX system.\14\
    
        \14\ In the initial pilot approval order, the Commission 
    described its concerns with the program and requested that the 
    Exchange submit a report detailing the use of the pilot. The 
    Exchange, however, did not submit a report because specialists on 
    the Exchange made little or no use of the pilot program. Telephone 
    conversation between David Rusoff, Foley & Lardner, and Glen 
    Barrentine and Jennifer Choi, SEC. on July 18, 1995.
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        The Commission believes that pricing and execution procedures of 
    Enhanced SuperMAX and Timed Enhanced SuperMAX are consistent with the 
    maintenance of fair and orderly auction markets on national securities 
    exchanges. Moreover, the Commission believes that the execution 
    criteria of Enhanced SuperMAX and Timed Enhanced SuperMAX should 
    contribute to an orderly market because they help to reduce variations 
    from trade to trade on low volume. Finally, although the proposals will 
    not automatically provide price improvement, they will provide some 
    opportunity for customers to receive a better price. The Enhanced 
    SuperMAX being proposed in this filing is identical to the previous 
    pilot program except that the start up time will be 8:45 a.m. (C.T.). 
    The Timed Enhanced SuperMAX procedures are identical to those of 
    Enhanced SuperMAX except that the stopped order will be executed at the 
    top price after a period of time that has been designated by the 
    specialist but may not be shorter than 30 seconds has expired. This 
    additional feature is intended to allow orders in inactive stocks to be 
    provided with an opportunity for price improvement but to be executed 
    without unduly delay. Therefore, the Commission finds that 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, perfect 
    the mechanisms of a free and open market, and in general to protect 
    investors and the public interest.
        The Commission believes that it would be appropriate to allow the 
    Exchange to implement Enhanced SuperMAX and Timed Enhanced SuperMAX for 
    a one-year period to afford the Exchange and the Commission an 
    opportunity to monitor the operation of the systems and determine their 
    effectiveness. The Exchange should monitor the use of the systems 
    during the one-year pilot period and assure the Commission that there 
    are no adverse effects on the quality of customer order executions. 
    Moreover, the Exchange should examine the use of the systems during the 
    pilot period to determine whether specialists are choosing the 
    appropriate system for each of their stocks.
        The Commission, therefore, requests that the Exchange submit a 
    report to the Commission by May 31, 1996, describing its experience 
    with the pilot program. At a minimum, this report should contain the 
    following data gathered during the first 9-month period after the 
    start-up date for Enhanced SuperMAX and Timed Enhanced SuperMAX: (1) 
    The number of orders executed in SuperMAX, Enhanced SuperMAX, and Timed 
    Enhanced SuperMAX; (2) share and dollar volume for all three systems; 
    (3) comparisons of orders executed under SuperMAX, Enhanced SuperMAX, 
    and Timed Enhanced SuperMAX, indicating where orders executed under one 
    system would have received a more favorable execution under another 
    system; (4) the number of specialists using each system, and the number 
    of stocks included in each; (5) the average length of time between 
    receipt of an order and execution under each system; (6) the types of 
    securities being chosen for each system (if a pattern is discernable); 
    (7) a break down of each issue chosen for 
    
    [[Page 39469]]
    each system during the pilot period, including each date the issue was 
    placed on each system and removed; and (8) whether any distinguishable 
    market condition existed when an issue was placed on or taken off each 
    system. Any requests to modify this pilot program, to extend its 
    effectiveness, or to seek permanent approval for the pilot program also 
    should be submitted to the Commission by May 31, 1996, as a proposed 
    rule change pursuant to Section 19(b) of the Act.
        The Commission finds good cause for approving the proposed rule 
    change prior to the thirtieth day after the date of publication of 
    notice thereof in the Federal Register. The Commission believes that it 
    is appropriate to approve the proposed rule change on an accelerated 
    basis so that the Exchange can enable public customers to receive the 
    benefits of Enhanced SuperMAX and Timed Enhanced SuperMAX without 
    delay. Moreover, the Enhanced SuperMAX feature previously has been on a 
    pilot program from December 1991 through April 1993, and the Commission 
    is approving CHX's Enhanced SuperMAX and Timed Enhanced SuperMAX only 
    for a one-year pilot period.\15\ During that time, the Commission and 
    the Exchange will be able to examine whether these programs are 
    successful at providing for automatic execution of orders at prices 
    consistent with the maintenance of fair and orderly markets and can 
    determine whether to extend the pilots for a further period or make the 
    programs permanent. The Commission, therefore, believes that granting 
    accelerated approval of the proposed rule change is appropriate and 
    consistent with Section 6 of the Act.\16\
    
        \15\ The Enhanced SuperMAX system has been published for comment 
    in the Federal Register previously, and there have been no adverse 
    comments on it.
        \16\ 15 U.S.C. 78f (1988 & Supp. V 1993).
    ---------------------------------------------------------------------------
    
        It is therefore ordered, pursuant to Section 19(b)(2) of the 
    Act,\17\ that the proposed rule change (SR-CHX-95-15) is approved on a 
    pilot basis until July 31, 1996.
    
        \17\ 15 U.S.C. 78s(b)(2) (1988).
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        For the Commission, by the Division of Market Regulation, 
    pursuant to delegated authority.\18\
    
        \18\ 17 CFR 200.30-3a(a)(12) (1994).
    ---------------------------------------------------------------------------
    
    Margaret H. McFarland,
    Deputy Secretary.
    [FR Doc. 95-18960 Filed 8-1-95; 8:45 am]
    BILLING CODE 8010-01-M
    
    

Document Information

Published:
08/02/1995
Department:
Securities and Exchange Commission
Entry Type:
Notice
Document Number:
95-18960
Pages:
39465-39469 (5 pages)
Docket Numbers:
Release No. 34-36027, File No. SR-CHX-95-15
PDF File:
95-18960.pdf