Self Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Pilot Rule Interpretation Relating to Trading of Nasdaq National Market Securities in Subpenny Increments, 39539-39540 [E5-3598]

Download as PDF Federal Register / Vol. 70, No. 130 / Friday, July 8, 2005 / Notices 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. Copies of such filing also will be available for inspection and copying at the principal office of the CBOE. 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–CBOE–2005–40 and should be submitted by July 29, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.10 Margaret H. McFarland, Deputy Secretary. [FR Doc. E5–3594 Filed 7–7–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–51944; File No. SR–CHX– 2005–19 Self Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Pilot Rule Interpretation Relating to Trading of Nasdaq National Market Securities in Subpenny Increments June 30, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on June 27, 2005, 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 and II below, which Items have been prepared by the CHX. The Exchange has filed this proposal pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders the proposal effective upon filing with the Commission. The 10 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 5 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). VerDate jul<14>2003 16:32 Jul 07, 2005 Jkt 205001 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 CHX has proposed to extend, until the effective date of new Rule 612 of Regulation NMS,5 a pilot rule interpretation (Article XXX, Rule 2, Interpretation and Policy .06 ‘‘Trading in Nasdaq/NM Securities in Subpenny Increments’’) which requires a CHX specialist (including a market maker who holds customer limit orders) to better the price of a customer limit order in his book which is priced at the national best bid or offer (‘‘NBBO’’) by at least one penny if the specialist determines to trade with an incoming market or marketable limit order. The pilot, which was approved in conjunction with exemptive relief granted by the Commission to allow for trading in Nasdaq National Market securities in subpenny increments, expires on June 30, 2005. The Exchange proposes that the pilot remain in effect until the effective date of Rule 612. 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 CHX included statements concerning the purpose of and basis for the proposed rule changes and discussed any comments it received regarding the proposal. The text of these statements may be examined at the places specified in Item III below. The CHX 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 Changes 1. Purpose On April 6, 2001, the Commission approved, on a pilot basis through July 9, 2001, a pilot rule interpretation (Article XXX, Rule 2, Interpretation and Policy .06 ‘‘Trading in Nasdaq/NM Securities in Subpenny Increments’’) 6 that requires a CHX specialist (including a market maker who holds customer limit orders) to better the price of a customer limit order in his book which 5 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496 (June 29, 2005) (‘‘Reg. NMS Release’’). Rule 612 will become effective on August 29, 2005. 6 See Securities Exchange Act Release No. 44164 (April 6, 2001), 66 FR 19263 (April 13, 2001) (SR– CHX–2001–07). PO 00000 Frm 00057 Fmt 4703 Sfmt 4703 39539 is priced at the NBBO by at least one penny if the specialist determines to trade with an incoming market or marketable limit order. The pilot, which was approved in conjunction with exemptive relief granted by the Commission to allow for trading in Nasdaq National Market securities in subpenny increments, has been extended many times and now is set to expire on June 30, 2005.7 The Exchange is not proposing any substantive (or typographical) change to the pilot; rather, the Exchange proposes that the pilot be immediately reinstated and remain in effect through the effective date of Rule 612 of Regulation NMS.8 2. Statutory Basis The CHX believes the proposal is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange and, in particular, with the requirements of Section 6(b).9 The CHX believes the proposal is consistent with Section 6(b)(5) of the Act 10 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.11 B. Self-Regulatory Organization’s Statement of Burden on Competition The Exchange does not believe that the proposed rule changes will impose any burden on competition. 7 See Securities Exchange Act Release Nos. 44535 (July 10, 2001), 66 FR 37251 (July 17, 2001) (extending pilot through November 5, 2001); 45062 (November 15, 2001), 66 FR 58768 (November 23, 2001) (extending pilot through January 14, 2002); 45386 (February 1, 2002), 67 FR 6062 (February 8, 2002) (extending the pilot through April 15, 2002); 45755 (April 15, 2002), 67 FR 19607 (April 22, 2002) (extending the pilot through September 30, 2002); 46587 (October 2, 2002), 67 FR 63180 (October 10, 2002) (extending the pilot through January 31, 2003); 47372 (February 14, 2003), 68 FR 8955 (February 26, 2003) (extending the pilot through May 31, 2003); 47951 (May 30, 2003), 68 FR 34448 (June 9, 2003) (extending the pilot through December 1, 2003); 48871 (December 3, 2003), 68 FR 69097 (December 11, 2003) (extending pilot through June 30, 2004); 49994 (July 9, 2004), 69 FR 42486 (July 15, 2004) (extending pilot through June 30, 2005). 8 See supra note 5. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). 11 With the Exchange’s permission, the Commission deleted irrelevant language from the notice relating to the Exchange’s continuing education programs. Telephone conference between Ellen Neely, President & General Counsel, Exchange, and Raymond Lombardo, Special Counsel, Division of Market Regulation, Commission, on June 29, 2005. E:\FR\FM\08JYN1.SGM 08JYN1 39540 Federal Register / Vol. 70, No. 130 / Friday, July 8, 2005 / Notices C. Self-Regulatory Organization’s Statement on Comments Regarding the Proposed Rule Changes Received From Members, Participants or Others be submitted by any of the following methods: SECURITIES AND EXCHANGE COMMISSION Electronic Comments No written comments were either solicited or received. • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–CHX–2005–19 on the subject line. [Release No. 34–51936; File No. SR–NSX– 2005–04] III. Date of Effectiveness of the Proposed Rule Changes and Timing for Commission Action The Exchange asserts the foregoing rule change has become effective pursuant to Section 19(b)(3)(A) 12 of the Act and Rule 19b–4(f)(6) 13 thereunder because the rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) Impose any significant burden on competition; and (iii) Become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest.14 The Exchange has requested that the Commission waive the 30-day operative delay and designate the proposed rule change effective immediately so that the pilot can continue uninterrupted. The Commission hereby grants the request.15 The Commission believes that such waiver is consistent with the protection of investors and the public interest because it will allow the protection of customer limit orders provided by the pilot to continue without interruption and designates the proposed rule change to be operative upon filing with the Commission. 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 proposal is consistent with the Act. Comments may 12 15 U.S.C. 78s(b)(3)(A). 13 17 CFR 240.19b–4(f)(6). 14 In addition, Rule 19b–4(f)(6)(iii) states that the Exchange must provide the Commission with written notice of its intent to file the proposed rule change at least five days prior to the date of filing of the proposed rule change. The Commission has determined to waive the requirement in this case. 15 For purposes only of accelerating the operative date of the proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate jul<14>2003 16:32 Jul 07, 2005 Jkt 205001 Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–9303. All submissions should refer to File No. SR–CHX–2005–19. 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 changes 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 Room. Copies of such filing will also 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 No. SR–CHX–2005–19 and should be submitted on or before July 29, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.16 Margaret H. McFarland, Deputy Secretary. [FR Doc. E5–3598 Filed 7–7–05; 8:45 am] BILLING CODE 8010–01–P PO 00000 16 17 CFR 200.30–3(a)(12). Frm 00058 Fmt 4703 Sfmt 4703 Self-Regulatory Organizations; National Stock Exchange; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend an Existing Pilot Rule That Stipulates the Price Increment by Which Designated Dealers Must Better Customer Subpenny Orders June 29, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on June 27, 2005, the National Stock ExchangeSM (‘‘Exchange’’) 3 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 the Exchange. The Exchange has filed this proposal pursuant to Section 19(b)(3)(A) of the Act 4 and Rule 19b– 4(f)(6) thereunder,5 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comment 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 has a pilot program under Exchange Rule 12.6, ‘‘Customer Priority,’’ Interpretation .02, which requires an Exchange Designated Dealer (‘‘Specialist’’) to better the price of a customer limit order that is held by that Specialist if that Specialist determines to trade with an incoming market or marketable limit order. Under the pilot program, the Specialist is required to better a customer limit order at the national best bid or offer (‘‘NBBO’’) by at least one penny, or by at least the nearest penny increment if the customer limit order is priced outside the NBBO. The pilot program currently in effect is scheduled to expire on June 30, 2005.6 With the instant proposed rule 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 The Exchange changed its name and was formerly known as The Cincinnati Stock Exchange or ‘‘CSE.’’ See Securities Exchange Act Release No. 48774 (November 12, 2003), 68 FR 65332 (November 19, 2003) (SR–CSE–2003–12). 4 15 U.S.C. 78s(b)(3)(A). 5 17 CFR 240.19b–4(f)(6). 6 See Securities Exchange Act Release Nos. 46274 (July 29, 2002), 67 FR 50743 (August 5, 2002) (File No. SR–CSE–2001–06) (establishing pilot); 46554 (September 25, 2002), 67 FR 6276 (October 4, 2002) (first extension of pilot) and 46929 (November 27, 2 17 E:\FR\FM\08JYN1.SGM 08JYN1

Agencies

[Federal Register Volume 70, Number 130 (Friday, July 8, 2005)]
[Notices]
[Pages 39539-39540]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-3598]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51944; File No. SR-CHX-2005-19


Self Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
to Extend the Pilot Rule Interpretation Relating to Trading of Nasdaq 
National Market Securities in Subpenny Increments

June 30, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on June 27, 2005, 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 and II below, which Items have been prepared by the CHX. The 
Exchange has filed this proposal pursuant to Section 19(b)(3)(A) of the 
Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 5 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The CHX has proposed to extend, until the effective date of new 
Rule 612 of Regulation NMS,\5\ a pilot rule interpretation (Article 
XXX, Rule 2, Interpretation and Policy .06 ``Trading in Nasdaq/NM 
Securities in Subpenny Increments'') which requires a CHX specialist 
(including a market maker who holds customer limit orders) to better 
the price of a customer limit order in his book which is priced at the 
national best bid or offer (``NBBO'') by at least one penny if the 
specialist determines to trade with an incoming market or marketable 
limit order. The pilot, which was approved in conjunction with 
exemptive relief granted by the Commission to allow for trading in 
Nasdaq National Market securities in subpenny increments, expires on 
June 30, 2005. The Exchange proposes that the pilot remain in effect 
until the effective date of Rule 612.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496 (June 29, 2005) (``Reg. NMS Release''). Rule 612 
will become effective on August 29, 2005.
---------------------------------------------------------------------------

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 CHX included statements 
concerning the purpose of and basis for the proposed rule changes and 
discussed any comments it received regarding the proposal. The text of 
these statements may be examined at the places specified in Item III 
below. The CHX 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 Changes

1. Purpose
    On April 6, 2001, the Commission approved, on a pilot basis through 
July 9, 2001, a pilot rule interpretation (Article XXX, Rule 2, 
Interpretation and Policy .06 ``Trading in Nasdaq/NM Securities in 
Subpenny Increments'') \6\ that requires a CHX specialist (including a 
market maker who holds customer limit orders) to better the price of a 
customer limit order in his book which is priced at the NBBO by at 
least one penny if the specialist determines to trade with an incoming 
market or marketable limit order. The pilot, which was approved in 
conjunction with exemptive relief granted by the Commission to allow 
for trading in Nasdaq National Market securities in subpenny 
increments, has been extended many times and now is set to expire on 
June 30, 2005.\7\ The Exchange is not proposing any substantive (or 
typographical) change to the pilot; rather, the Exchange proposes that 
the pilot be immediately reinstated and remain in effect through the 
effective date of Rule 612 of Regulation NMS.\8\
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 44164 (April 6, 
2001), 66 FR 19263 (April 13, 2001) (SR-CHX-2001-07).
    \7\ See Securities Exchange Act Release Nos. 44535 (July 10, 
2001), 66 FR 37251 (July 17, 2001) (extending pilot through November 
5, 2001); 45062 (November 15, 2001), 66 FR 58768 (November 23, 2001) 
(extending pilot through January 14, 2002); 45386 (February 1, 
2002), 67 FR 6062 (February 8, 2002) (extending the pilot through 
April 15, 2002); 45755 (April 15, 2002), 67 FR 19607 (April 22, 
2002) (extending the pilot through September 30, 2002); 46587 
(October 2, 2002), 67 FR 63180 (October 10, 2002) (extending the 
pilot through January 31, 2003); 47372 (February 14, 2003), 68 FR 
8955 (February 26, 2003) (extending the pilot through May 31, 2003); 
47951 (May 30, 2003), 68 FR 34448 (June 9, 2003) (extending the 
pilot through December 1, 2003); 48871 (December 3, 2003), 68 FR 
69097 (December 11, 2003) (extending pilot through June 30, 2004); 
49994 (July 9, 2004), 69 FR 42486 (July 15, 2004) (extending pilot 
through June 30, 2005).
    \8\ See supra note 5.
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2. Statutory Basis
    The CHX believes the proposal is consistent with the requirements 
of the Act and the rules and regulations thereunder that are applicable 
to a national securities exchange and, in particular, with the 
requirements of Section 6(b).\9\ The CHX believes the proposal is 
consistent with Section 6(b)(5) of the Act \10\ 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.\11\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ With the Exchange's permission, the Commission deleted 
irrelevant language from the notice relating to the Exchange's 
continuing education programs. Telephone conference between Ellen 
Neely, President & General Counsel, Exchange, and Raymond Lombardo, 
Special Counsel, Division of Market Regulation, Commission, on June 
29, 2005.
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement of Burden on Competition

    The Exchange does not believe that the proposed rule changes will 
impose any burden on competition.

[[Page 39540]]

C. Self-Regulatory Organization's Statement on Comments Regarding the 
Proposed Rule Changes Received From Members, Participants or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Changes and Timing for 
Commission Action

    The Exchange asserts the foregoing rule change has become effective 
pursuant to Section 19(b)(3)(A) \12\ of the Act and Rule 19b-4(f)(6) 
\13\ thereunder because the rule change does not:
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) Impose any significant burden on competition; and
    (iii) Become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, if 
consistent with the protection of investors and the public 
interest.\14\ The Exchange has requested that the Commission waive the 
30-day operative delay and designate the proposed rule change effective 
immediately so that the pilot can continue uninterrupted.
---------------------------------------------------------------------------

    \14\ In addition, Rule 19b-4(f)(6)(iii) states that the Exchange 
must provide the Commission with written notice of its intent to 
file the proposed rule change at least five days prior to the date 
of filing of the proposed rule change. The Commission has determined 
to waive the requirement in this case.
---------------------------------------------------------------------------

    The Commission hereby grants the request.\15\ The Commission 
believes that such waiver is consistent with the protection of 
investors and the public interest because it will allow the protection 
of customer limit orders provided by the pilot to continue without 
interruption and designates the proposed rule change to be operative 
upon filing with the Commission.
---------------------------------------------------------------------------

    \15\ For purposes only of accelerating the operative date of the 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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 proposal 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 No. SR-CHX-2005-19 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.

    All submissions should refer to File No. SR-CHX-2005-19. 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 changes 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 Room. Copies of such 
filing will also 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 No. SR-CHX-2005-19 and should 
be submitted on or before July 29, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-3598 Filed 7-7-05; 8:45 am]
BILLING CODE 8010-01-P
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