Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change by the Chicago Stock Exchange, Inc. Relating to Participant Fees and Credits, 24143-24145 [E5-2205]
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24143
Federal Register / Vol. 70, No. 87 / Friday, May 6, 2005 / Notices
the Act, and all of the component stocks
are either listed or traded on, or traded
through the facilities of, U.S. securities
markets.
The Commission also believes that
any concerns that a broker-dealer, such
as Wachovia, or a subsidiary providing
a hedge for the issuer, will incur undue
position exposure are minimized by the
size of the Notes issuance in relation to
the net worth of Wachovia.38
Finally, the Commission notes that
the value of the Index will be calculated
and disseminated by the CBOE once
every trading day after the close of
trading. However, the Commission notes
that the value of the S&P 500 will be
widely disseminated at least once every
fifteen seconds throughout the trading
day and that investors are able to obtain
real-time call option pricing on the S&P
500 during the trading day. Further, the
Indicative Value, which will be
calculated by the Amex after the close
of trading and after the CBOE calculates
the BXM Index for use by investors the
next trading day, is designed to provide
investors with a daily reference value of
the adjusted Index. The Commission
notes that Wachovia has agreed to
arrange to have the BXM Index
calculated and disseminated on a daily
basis through a third party in the event
that the CBOE discontinues calculating
and disseminating the Index. In such
event, the Exchange agrees to obtain
Commission approval, pursuant to filing
the appropriate Form 19b–4, prior to the
substitution of the CBOE BXM Index.
Further, the Commission notes that the
Exchange has agreed to undertake to
delist the Notes in the event that the
CBOE ceases to calculate and
disseminate the Index, and Wachovia is
unable to arrange to have the BXM
Index calculated and widely
disseminated through a third party.
The Commission finds good cause for
approving the proposed rule change
prior to the 30th day after the date of
publication of the notice of filing thereof
in the Federal Register. The Exchange
has requested accelerated approval
because this product is similar to
several other instruments currently
38 See Securities Exchange Act Release Nos.
44913 (Oct. 9, 2001), 66 FR 52469 (Oct. 15, 2001)
(order approving the listing and trading of notes
whose return is based on the performance of the
Nasdaq-100 Index) (File No. SR–NASD–2001–73);
44483 (June 27, 2001), 66 FR 35677 (July 6, 2001)
(order approving the listing and trading of notes
whose return is based on a portfolio of 20 securities
selected from the Amex Institutional Index) (File
No. SR–Amex–2001–40); and 37744 (Sept. 27,
1996), 61 FR 52480 (Oct. 7, 1996) (order approving
the listing and trading of notes whose return is
based on a weighted portfolio of healthcare/
biotechnology industry securities) (File No. SR–
Amex–96–27).
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18:03 May 05, 2005
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listed and traded on the Amex.39 The
Commission believes that the Notes will
provide investors with an additional
investment choice and that accelerated
approval of the proposal will allow
investors to begin trading the Notes
promptly. Additionally, the Notes will
be listed pursuant to Amex’s existing
hybrid security listing standards as
described above. Therefore, the
Commission finds good cause,
consistent with Section 19(b)(2) of the
Act,40 to approve the proposal on an
accelerated basis.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,41 that the
proposed rule change (File No. SR–
Amex–2005–036) is hereby approved on
an accelerated basis.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.42
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5–2213 Filed 5–5–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51639; File No. SR–CHX–
2005–12]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of a Proposed Rule Change by the
Chicago Stock Exchange, Inc. Relating
to Participant Fees and Credits
April 29, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 2 thereunder,
notice is hereby given that on April 21,
2005, the Chicago Stock Exchange, Inc.
(‘‘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 CHX. The proposed rule
change has been filed by the CHX as
establishing or changing a due, fee, or
other charge, pursuant to Section
19(b)(3)(A)(ii) of the Act,3 and Rule
39 See supra notes 16 (citing previous approvals
of securities with structures similar to that of the
proposed Notes); and 18 (citing previous approvals
of securities linked to the performance of the S&P
500 as well as options on the S&P 500).
40 15 U.S.C. 78f(b)(5) and 78s(b)(2).
41 15 U.S.C. 78s(b)(2).
42 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
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19b–4(f)(2) 4 thereunder, which renders
the proposal effective upon filing with
the Commission. 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 Exchange proposes to amend its
rules to amend its Participant Fee
Schedule to allow the Exchange to
extend the fixed fee exemption for
CHXpress securities to new securities
during the course of a month. Below is
the text of the proposed rule change.
Proposed new language is in italics;
proposed deletions are in [brackets].
*
*
*
*
*
PARTICIPANT FEES AND CREDITS
*
*
*
*
*
E. Specialist Fixed Fees
Except in the case of Tape B
Exemption Eligible Securities (as
defined above in Section D), and
Designated CHXpress Securities (as
defined below), which shall be exempt
from assessment of fixed fees,
specialists will be assigned a fixed fee
per assigned stock on a monthly basis,
to be calculated as follows:
*
*
*
*
*
‘‘Designated CHXpress Securities’’ are
those issues which have been
designated by the Exchange [on a
monthly basis] as fixed-fee exempt at
the beginning of each month, or which
have been added by the Exchange to the
list of exempt securities during the
month, with the consent of the specialist
assigned to trade the issue.
*
*
*
*
*
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
Exchange 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
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
4 17
E:\FR\FM\06MYN1.SGM
CFR 240.19b–4(f)(2).
06MYN1
24144
Federal Register / Vol. 70, No. 87 / Friday, May 6, 2005 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange stated that it is rolling
out a new, automated functionality for
the handling of particular orders, called
CHXpress.TM According to the
Exchange, the CHXpress functionality is
designed to provide additional
opportunities for the Exchange’s
participants to seek and receive
liquidity through automated executions
of orders at the Exchange.5 With a few
exceptions, CHXpress orders will be
executed immediately and
automatically against same or betterpriced orders in the specialist’s book, or
against the specialist’s quote (when that
functionality is available).6 If a
CHXpress order cannot be immediately
executed, it will be placed in the
specialist’s book for instantaneous
display or later execution.7 A CHX
specialist may not cancel or place a
CHXpress order on hold or otherwise
prevent the order-sending firm from
canceling the order.
The Exchange stated that this new
functionality currently is available in
select issues, and the Exchange plans to
extend the use of this functionality to
additional issues in upcoming weeks.
Last month, the Exchange began
exempting, from the specialist fixed
fees, securities in which CHXpress
orders are processed by the Exchange.8
The Exchange stated that it had planned
to identify these securities, on a
monthly basis, at the beginning of each
5 See Securities Exchange Act Release No. 50481
(Sept. 30, 2004), 69 FR 60197 (Oct. 7, 2004) (SR–
CHX–2004–12).
6 CHXpress orders will not be executed if those
executions would improperly trade-through another
ITS market or if trading in the issue had been
halted. CHXpress orders that would improperly
trade through an ITS market or that are received
during a trading halt will be cancelled. If trading
in an issue has been halted, CHXpress orders in the
book will be cancelled.
7 A CHXpress order will be instantaneously and
automatically displayed when it constitutes the best
bid or offer in the CHX book. See CHX Article XX,
Rule 37(b)11(D). CHXpress orders, like all other
orders at the Exchange, will not be eligible for
automated display if that display would improperly
lock or cross the NBBO. A CHXpress order that
would improperly lock or cross the NBBO will be
cancelled. CHXpress orders cannot be excluded
from the CHX’s quote.
8 See Securities Exchange Act Release No. 51430
(Mar. 24, 2005), 70 FR 16540 (Mar. 31, 2005) (SR–
CHX–2005–03). According to the CHX, the fee
exemption was designed to address concerns of
CHX specialist firms, who have noted that they will
be best able to handle issues associated with the
automatic execution of CHXpress orders when two
systems projects—to automatically execute inbound
ITS commitments and to allow them to display (and
have automatically executed) their manual
proprietary quotes—have been completed.
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month, based on business factors
including the interest demonstrated by
order-sending firms in trading a
particular security. The Exchange also
stated that the CHXpress functionality
was to have been enabled for these
designated CHXpress securities
throughout the month.
The Exchange, however, has
determined that it is not efficient, from
a business perspective, to try to
designate the CHXpress securities on a
monthly basis, unless the Exchange has
the authority to add to the list when
necessary. The Exchange believes that it
is important to be able to respond to
potential new order flow during a
month by allowing the Exchange to
extend CHXpress functionality to
additional issues, so long as the
specialist in the security agrees to the
addition.9
At any time within 60 days of the filing
of the proposed 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.
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.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
2. Statutory Basis
• Send an e-mail to rulecomments@sec.gov. Please include File
The CHX believes that the proposed
Number SR-CHX–2005–12 on the
rule change is consistent with Section
6(b) of the Act,10 in general, and furthers subject line.
the objectives of Section 6(b)(4) of the
Paper Comments
Act,11 in particular, in that it provides
• Send paper comments in triplicate
for the equitable allocation of reasonable
to Jonathan G. Katz, Secretary,
dues, fees and other charges among its
Securities and Exchange Commission,
members.
450 Fifth Street, NW., Washington, DC
B. Self-Regulatory Organization’s
20549–0609.
Statement on Burden on Competition
All submissions should refer to File
Number SR–CHX–2005–12. This file
The Exchange does not believe that
number should be included on the
the proposed rule change will impose
subject line if e-mail is used. To help the
any inappropriate burden on
Commission process and review your
competition.
comments more efficiently, please use
C. Self-Regulatory Organization’s
only one method. The Commission will
Statement on Comments on the
post all comments on the Commission’s
Proposed Rule Change Received From
Internet Web site (https://www.sec.gov/
Members, Participants, or Others
rules/sro.shtml). Copies of the
No written comments were either
submission, all subsequent
solicited or received.
amendments, all written statements
with respect to the proposed rule
III. Date of Effectiveness of the
change that are filed with the
Proposed Rule Change and Timing for
Commission, and all written
Commission Action
communications relating to the
The foregoing proposed rule change
proposed rule change between the
has become effective pursuant to
Commission and any person, other than
12 and
Section 19(b)(3)(A)(ii) of the Act,
those that may be withheld from the
13 thereunder, because
Rule 19b–4(f)(2)
public in accordance with the
it establishes or changes a due, fee, or
provisions of 5 U.S.C. 552, will be
other charge imposed by the Exchange.
available for inspection and copying in
the Commission’s Public Reference
9 The Exchange believes that it is appropriate to
Section, 450 Fifth Street, NW.,
consult with the specialist firm assigned to an issue
Washington, DC 20549. Copies of such
before extending CHXpress functionality to that
issue because of the potential double liability
filing also will be available for
associated with the handling of ITS commitments
inspection and copying at the principal
when CHXpress orders are automatically executing
against displayed bids and offers and because of the office of the CHX. All comments
specialist’s inability to manually post bids and
received will be posted without change;
offers in CHXpress-eligible securities until the two
the Commission does not edit personal
system projects described in note 8, supra, have
identifying information from
been completed.
submissions. You should submit only
10 15 U.S.C. 78f(b).
information that you wish to make
11 15 U.S.C. 78f(b)(4).
12 15 U.S.C. 78s(b)(3)(A)(ii).
available publicly. All submissions
13 17 CFR 240.19b–4(f)(2).
should refer to File Number SR–CHX–
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E:\FR\FM\06MYN1.SGM
06MYN1
Federal Register / Vol. 70, No. 87 / Friday, May 6, 2005 / Notices
2005–12 and should be submitted on or
before May 27, 2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5–2205 Filed 5–5–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51630; File No. SR–NASD–
2005–049]
Self-Regulatory Organizations; Notice
of Filing and Order Granting
Accelerated Approval of Proposed
Rule Change and Amendment Nos. 1
and 2 Thereto by the National
Association of Securities Dealers, Inc.
To Modify the Pricing for Non-NASD
Members Using Nasdaq’s Brut Facility
April 28, 2005.
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 April 8,
2005, the National Association of
Securities Dealers, Inc. (‘‘NASD’’),
through its subsidiary, The Nasdaq
Stock Market, Inc. (‘‘Nasdaq’’), filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by Nasdaq. On April 12,
2005, Nasdaq submitted Amendment
No. 1 to the proposed rule change.3 On
April 27, 2005, Nasdaq submitted
Amendment No. 2 to the proposed rule
change.4 The Commission is publishing
this notice to solicit comments on the
proposed rule change, as amended, from
interested persons, and at the same time
is granting accelerated approval of the
proposed rule change.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to modify the
pricing for non-NASD members using
Nasdaq’s Brut Facility (‘‘Brut’’). Nasdaq
requests approval to implement the
proposed rule change retroactively as of
April 11, 2005. The text of the proposed
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Amendment No. 1 corrected a clerical error in
the originally filed proposed rule change to clarify
that the filing was submitted under Section 19(b)(2)
of the Act.
4 Amendment No. 2 replaced and superseded the
originally filed proposed rule change, as amended.
1 15
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18:03 May 05, 2005
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rule change, as amended, is available on
the NASD’s Web site (https://
www.nasd.com), at the NASD’s Office of
the Secretary, and at the Commission’s
Public Reference Room.
In its filing with the Commission,
Nasdaq included statements concerning
the purpose of and basis for the
proposed rule change, as amended, 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.
Nasdaq 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
Nasdaq currently charges a fee of
$0.004 per share executed with respect
to any order to buy or sell exchangelisted securities that is routed by Brut to
an exchange using such exchange’s
proprietary order delivery system (such
as the New York Stock Exchange’s
SuperDOT system). In SR–NASD–2005–
048, which became effective
immediately upon filing, Nasdaq
reduced this fee for NASD members for
some orders and eliminated it entirely
for others effective April 11, 2005. In
this filing, Nasdaq proposes to put in
effect the same fee changes for nonmembers.
Under the proposal, the fee for orders
to buy or sell exchange-listed securities
(assuming such securities are subject to
the Consolidated Quotations Service
and Consolidated Tape Association
Plans and are not Exchange Traded
Funds listed on the American Stock
Exchange) that are routed by Brut to an
exchange using the exchange’s
proprietary order delivery system would
be reduced to $0.0004 per share
executed. This fee would only be
charged, however, if the orders to which
it otherwise applies are routed outside
Brut and the Nasdaq Market Center
(‘‘NMC’’) without first attempting to
execute within Brut or the NMC. If an
order to which this fee would otherwise
apply first attempts to execute against
the book maintained by Brut or the
NMC, then this fee would no longer be
applicable.
By lowering (and eliminating in many
cases) the routing fees for certain orders
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24145
for exchange-listed securities received
by Brut, Nasdaq states that it seeks to
continue to improve Brut’s
competitiveness in attracting buy and
sell orders for exchange-listed
securities. Nasdaq believes that its
participants would benefit from the
increased liquidity in exchange-listed
securities that the proposal is designed
to stimulate. Furthermore, Nasdaq states
that all investors would benefit from
increased competition in this area.
Finally, Nasdaq believes that the
distinction for fee purposes between
orders that check the Brut (or NMC)
book before routing and those that are
designated for routing regardless of
available prices in such book would
encourage orders to check the Brut
book, which it believes would benefit
both the particular investor (who, as a
result, may find a better execution) and
the market as a whole.
At the same time, the proposed rule
change seeks to apply to non-members
a new fee (which is being instituted for
members) designed to recover the
commissions billed by NYSE specialists
to Brut for certain types of limit orders.
According to Nasdaq, generally, NYSE
specialists charge Brut for executions of
limit orders that remained unexecuted
on the specialists’ books for more than
5 minutes. While the specialists’ fee
schedules vary, Nasdaq states that the
proposed Brut fee of $0.009 per share is
generally designed to recover for Brut
some of the associated cost.
The new fee would apply when a
limit order is delivered to the NYSE via
the NYSE’s proprietary order delivery
system and the time to execute such an
order exceeds five minutes (measured as
the difference between the time of the
NYSE’s electronic acknowledgment of
the order and the time of execution).
The new fee would not apply, however,
to day orders executed in the specialists’
opening and to good-till-cancelled
orders if executed in the opening on the
day when they were entered. The new
fee would also not apply to any on-close
orders or market orders.
2. Statutory Basis
Nasdaq believes that the proposed
rule change, as amended, is consistent
with the provisions of Section 15A of
the Act,5 in general, and with Section
15A(b)(5) of the Act,6 in particular, in
that the proposed rule change provides
for the equitable allocation of reasonable
dues, fees, and other charges among
members and issuers and other persons
5 15
6 15
E:\FR\FM\06MYN1.SGM
U.S.C. 78o–3.
U.S.C. 78o–3(b)(5).
06MYN1
]]>Agencies
[Federal Register Volume 70, Number 87 (Friday, May 6, 2005)]
[Notices]
[Pages 24143-24145]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-2205]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51639; File No. SR-CHX-2005-12]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change by the Chicago Stock Exchange,
Inc. Relating to Participant Fees and Credits
April 29, 2005.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on April 21, 2005, the Chicago Stock Exchange, Inc. (``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 CHX. The proposed
rule change has been filed by the CHX as establishing or changing a
due, fee, or other charge, pursuant to Section 19(b)(3)(A)(ii) of the
Act,\3\ and Rule 19b-4(f)(2) \4\ thereunder, which renders the proposal
effective upon filing with the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2)..
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its rules to amend its Participant
Fee Schedule to allow the Exchange to extend the fixed fee exemption
for CHXpress[reg] securities to new securities during the course of a
month. Below is the text of the proposed rule change. Proposed new
language is in italics; proposed deletions are in [brackets].
* * * * *
PARTICIPANT FEES AND CREDITS
* * * * *
E. Specialist Fixed Fees
Except in the case of Tape B Exemption Eligible Securities (as
defined above in Section D), and Designated CHXpress Securities (as
defined below), which shall be exempt from assessment of fixed fees,
specialists will be assigned a fixed fee per assigned stock on a
monthly basis, to be calculated as follows:
* * * * *
``Designated CHXpress Securities'' are those issues which have been
designated by the Exchange [on a monthly basis] as fixed-fee exempt at
the beginning of each month, or which have been added by the Exchange
to the list of exempt securities during the month, with the consent of
the specialist assigned to trade the issue.
* * * * *
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 Exchange 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 Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.
[[Page 24144]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange stated that it is rolling out a new, automated
functionality for the handling of particular orders, called
CHXpress.TM According to the Exchange, the CHXpress
functionality is designed to provide additional opportunities for the
Exchange's participants to seek and receive liquidity through automated
executions of orders at the Exchange.\5\ With a few exceptions,
CHXpress orders will be executed immediately and automatically against
same or better-priced orders in the specialist's book, or against the
specialist's quote (when that functionality is available).\6\ If a
CHXpress order cannot be immediately executed, it will be placed in the
specialist's book for instantaneous display or later execution.\7\ A
CHX specialist may not cancel or place a CHXpress order on hold or
otherwise prevent the order-sending firm from canceling the order.
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\5\ See Securities Exchange Act Release No. 50481 (Sept. 30,
2004), 69 FR 60197 (Oct. 7, 2004) (SR-CHX-2004-12).
\6\ CHXpress orders will not be executed if those executions
would improperly trade-through another ITS market or if trading in
the issue had been halted. CHXpress orders that would improperly
trade through an ITS market or that are received during a trading
halt will be cancelled. If trading in an issue has been halted,
CHXpress orders in the book will be cancelled.
\7\ A CHXpress order will be instantaneously and automatically
displayed when it constitutes the best bid or offer in the CHX book.
See CHX Article XX, Rule 37(b)11(D). CHXpress orders, like all other
orders at the Exchange, will not be eligible for automated display
if that display would improperly lock or cross the NBBO. A CHXpress
order that would improperly lock or cross the NBBO will be
cancelled. CHXpress orders cannot be excluded from the CHX's quote.
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The Exchange stated that this new functionality currently is
available in select issues, and the Exchange plans to extend the use of
this functionality to additional issues in upcoming weeks. Last month,
the Exchange began exempting, from the specialist fixed fees,
securities in which CHXpress orders are processed by the Exchange.\8\
The Exchange stated that it had planned to identify these securities,
on a monthly basis, at the beginning of each month, based on business
factors including the interest demonstrated by order-sending firms in
trading a particular security. The Exchange also stated that the
CHXpress functionality was to have been enabled for these designated
CHXpress securities throughout the month.
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 51430 (Mar. 24,
2005), 70 FR 16540 (Mar. 31, 2005) (SR-CHX-2005-03). According to
the CHX, the fee exemption was designed to address concerns of CHX
specialist firms, who have noted that they will be best able to
handle issues associated with the automatic execution of CHXpress
orders when two systems projects--to automatically execute inbound
ITS commitments and to allow them to display (and have automatically
executed) their manual proprietary quotes--have been completed.
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The Exchange, however, has determined that it is not efficient,
from a business perspective, to try to designate the CHXpress
securities on a monthly basis, unless the Exchange has the authority to
add to the list when necessary. The Exchange believes that it is
important to be able to respond to potential new order flow during a
month by allowing the Exchange to extend CHXpress functionality to
additional issues, so long as the specialist in the security agrees to
the addition.\9\
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\9\ The Exchange believes that it is appropriate to consult with
the specialist firm assigned to an issue before extending CHXpress
functionality to that issue because of the potential double
liability associated with the handling of ITS commitments when
CHXpress orders are automatically executing against displayed bids
and offers and because of the specialist's inability to manually
post bids and offers in CHXpress-eligible securities until the two
system projects described in note 8, supra, have been completed.
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2. Statutory Basis
The CHX believes that the proposed rule change is consistent with
Section 6(b) of the Act,\10\ in general, and furthers the objectives of
Section 6(b)(4) of the Act,\11\ in particular, in that it provides for
the equitable allocation of reasonable dues, fees and other charges
among its members.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4).
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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 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.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change has become effective pursuant to
Section 19(b)(3)(A)(ii) of the Act,\12\ and Rule 19b-4(f)(2) \13\
thereunder, because it establishes or changes a due, fee, or other
charge imposed by the Exchange. At any time within 60 days of the
filing of the proposed 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.
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\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
\13\ 17 CFR 240.19b-4(f)(2).
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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. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-CHX-2005-12 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW.,
Washington, DC 20549-0609.
All submissions should refer to File Number SR-CHX-2005-12. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (https://www.sec.gov/
rules/sro.shtml). 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. 552, will be available for inspection
and copying in the Commission's Public Reference Section, 450 Fifth
Street, NW., Washington, DC 20549. Copies of such filing also will be
available for inspection and copying at the principal office of the
CHX. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-CHX-
[[Page 24145]]
2005-12 and should be submitted on or before May 27, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-2205 Filed 5-5-05; 8:45 am]
BILLING CODE 8010-01-P
