[Federal Register Volume 59, Number 165 (Friday, August 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-21008]
[[Page Unknown]]
[Federal Register: August 26, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34555; File No. SR-CSE-94-01]
August 19, 1994.
Self-Regulatory Organizations; Notice of Filing of Amendment No.
1 to Proposed Rule Change by Cincinnati Stock Exchange, Inc. Relating
to the Exchange's Quality of Markets Policy
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 August
1, 1994, the Cincinnati Stock Exchange, Inc. (``CSE'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'')
Amendment No. 1 to 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.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The CSE hereby proposes to amend its prior filing regarding the
CSE's policy governing Quality of Markets. The following is the text of
the proposed rule change, with italics representing new language to be
added and brackets representing deleted language:
D. Non-Preferencing Designated Dealers
(a) ITS Inbound Activity
[The percentage of a non-preferencing member firm's total monthly
CSE trade activity which consists of ITS inbound executions shall equal
at least 5%]
The percentage of a non-preferencing member firm's total monthly
CSE trade activity which consists of ITS inbound executions shall equal
or exceed the average percentage achieved by preferencing Designated
Dealers that manually enter quotations. If there exist no preferencing
Dealers on CSE that are manually entering quotations, then the
percentage of a non-preferencing member firm's total monthly CSE trade
activity which consists of ITS inbound executions shall equal at least
5%. For the purpose of comparing ITS inbound activity, a rolling three-
month average will be used to derive the percentage for the DDs
entering manual quotations and these will be compared to the next
month's percentages achieved by those member firms using computer-
generated quotations.
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
On February 25, 1994, the CSE filed proposed changes to its quality
of markets policy.\1\ The proposal calls for the elimination of
autoquoting and the adoption of objective standards to ensure that CSE
specialists are contributing to the national market system. In response
to comments on the filing, the Exchange proposes to amend one component
of its new policy, the Intermarket Trading System (``ITS'') inbound
execution requirement. Specifically, the requirement, as amended, would
require that all Designated Dealers who computer-generate their
quotations, whether or not they preference order flow, generate the
same percentage of ITS inbound activity as preferencing Designated
Dealers who manually generate quotes. The Exchange believes that such
an approach would more fairly allocate the burden of improved
performance across all of its specialists.
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\1\The rule change was published for public comment in
Securities Exchange Act Release No. 33849 (April 1, 1994), 59 FR
16870 (April 8, 1994).
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the Act
in general and furthers the objectives of Section 6(b)(5) in particular
in that it is intended to promote just and equitable principles of
trade.
B. Self-Regulatory Organization's Statement on Burden on Competition
The CSE 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 with respect
to Amendment No. 1 to the proposed rule change.
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 other 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 size 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 CSE. All
submissions should refer to File No. SR-CSE-94-01 and should be
submitted by September 16, 1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-21008 Filed 8-25-94; 8:45 am]
BILLING CODE 8010-01-M
