[Federal Register Volume 61, Number 165 (Friday, August 23, 1996)]
[Notices]
[Pages 43566-43567]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21544]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37579; File No. SR-CHX-96-24]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange,
Incorporated Relating to Unlisted Trading Privileges
August 16, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on August 9, 1996, the
Chicago Stock Exchange, Incorporated (``CHX'' or the ``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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1) (1988).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Article XXVIII, Rule 5 and Article
XXX, Rule 1, interpretation and policy .01, relating to unlisted
trading privileges (``UTP'').
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
Prior to the enactment of the Unlisted Trading Privileges Act of
1994 (``UTP Act''), Section 12(f) \2\ of the Act allowed an exchange,
subject to Commission approval, to extend UTP to securities that were
listed and registered on another exchange.\3\ Section 12(f) required
exchanges to apply to the Commission and receive Commission approval of
the exchange's application before extending UTP to a particular
security. The Commission was required to provide interested parties
with at least 10 days notice of the application and the Commission had
to determine whether the extension of UTP to each named security met
certain criteria. If so, the Commission published an approval order in
the Federal Register. Exchange Interpretation and Policy .01 of Article
XXX, Rule 1, reflects this statutory scheme in that it references
``obtaining'' UTP from the Commission.
---------------------------------------------------------------------------
\2\ 15 U.S.C. 78l.
\3\ By ``extending UTP'' to a security, the exchange allows its
members to trade the security as if it were listed on the exchange.
---------------------------------------------------------------------------
The enactment of the UTP Act, however, removed the application,
notice, and Commission approval process from Section 12(f) of the Act,
and revised the conditions under which exchanges may extend UTP to most
registered securities. Currently, Section 12(f)(1)(A)(i) \4\ allows a
national securities exchange to extend UTP to any security listed and
registered on another national securities exchange.\5\
[[Page 43567]]
Pursuant to authority granted in Section 12(f)(1)(C),\6\ the Commission
promulgated Rule 12f-2,\7\ allowing a national securities exchange to
extend UTP to a subject security on the day following the day on which
the initial public offering of such subject security commences.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78l(f)(1)(A)(i).
\5\ The Commission notes that pursuant to Rule 12f-5, a national
securities exchange shall not extend unlisted trading privileges to
any security unless the exchange has in effect a rule or rules
providing for transactions in the class or type of security to which
the exchange extends unlisted trading privileges.
\6\ 15 U.S.C. 78l(f)(1)(C).
\7\ 17 CFR 240.12f-2 (1995).
---------------------------------------------------------------------------
Accordingly, with the revisions to Section 12(f) as a result of the
UTP Act, Exchange Article XXVIII, Rule 5 and Exchange Article XXX, Rule
1, Interpretation and Policy .01, no longer reflect the revised
statutory scheme. Since exchanges are no longer required to seek
Commission approval in order to extend UTP, the language in the text of
the rule referencing the ``obtaining'' of UTP through Commission
approval should be eliminated. The proposed rule change reflects the
revised statutory scheme under Section 12(f) and Rule 12f-2. The
Exchange also proposes to amend Article XXVIII, Rule 5 to allow the
Exchange President's designee to extend unlisted trading privileges.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b)(5) of the Act \8\ 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.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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 of 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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \9\ and of Rule 19b-4(e)(1) thereunder,\10\
because it constitutes a stated policy, practice or interpretation with
respect to the meaning, administration, or enforcement of an existing
rule of the Exchange. At any time within 60 days of the filing of such
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.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(e)(1) (1994).
---------------------------------------------------------------------------
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 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. 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-96-24 and
should be submitted by September 13, 1996.
For the Commission, by the Division of Market Regulations,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12) (1995).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-21544 Filed 8-22-96; 8:45 am]
BILLING CODE 8010-01-M
