[Federal Register Volume 61, Number 178 (Thursday, September 12, 1996)]
[Notices]
[Pages 48185-48186]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23348]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37653; File No. SR-CSE-96-05]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by The Cincinnati Stock Exchange Relating to Day Trading Margin
Requirements
September 6, 1996.
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
15, 1996, the Cincinnati Stock Exchange (``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 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 proposes to amend its rules concerning day trading margin
requirements. The text of the proposed rule change is set forth below
[New text is italicized; deleted text is bracketed]:
Rule 6.2. Day Trading Margin
(a) The term ``day trading'' means the purchasing and selling of
the same security on the same day. A ``day trader'' is any customer
whose trading shows a pattern of day trading.
(b) Whenever day trading occurs in a customer's margin account the
margin to be maintained shall be the margin on the ``long'' or
``short'' transaction, whichever occurred first. When day trading
occurs in the account of a day trader, the margin to be maintained
shall be the margin on the ``long'' or ``short'' transaction, which
ever occurred first.
(c) No member shall permit a public customer to make a practice,
directly or indirectly, of effecting transactions in a cash account
where the cost of securities purchased is met by the sale of the same
securities. No member shall permit a public customer to make a practice
of selling securities with them in a cash account which are to be
received against payment from another broker-dealer where such
securities were purchased and are not yet paid for.
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 aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The purpose of the proposed rule change is to enhance the financial
protections and therefore the integrity of the Exchange's markets by
ensuring that customers maintain adequate margin reserves in their
accounts. The proposed rule change requires day traders to maintain
margins sufficient to cover their intraday ``long'' or ``short''
positions, depending upon which occurred first, for a particular day.
Because the proposed rule change will enhance the financial
protections and the integrity of the exchange's markets, the Exchange
believes that the proposed rule change is consistent with
[[Page 48186]]
Section 6 of the Act in general and with Section 6(b)(5) in particular
in that it is designed to promote just and equitable principles of
trade and to protect investors and the public interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes the proposed rule change will impose no
inappropriate 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 publication of this notice in theFederal
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 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 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 CSE. All
submissions should refer to File No. SR-CSE-96-05 and should be
submitted by October 3, 1996.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\1\
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\1\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-23348 Filed 9-11-96; 8:45 am]
BILLING CODE 8010-01-M
