Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Approving Proposed Rule Change Relating to Standards for Manual Execution of Market and Marketable Limit Orders, 43475-43476 [E5-3980]
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Federal Register / Vol. 70, No. 143 / Wednesday, July 27, 2005 / Notices
following Linkage order fees: (i) $.24 per
contract transaction fee for equity,
QQQQ and SPDR options, (ii) $.35 or
$.20 per contract, depending on the
premium, for OEF options and $.45 or
$.25 per contract, depending on the
premium, for other index options, (iii)
$.04 per contract floor brokerage fee, if
any portion of a Linkage order is
manually handled, (iv) $.30 per contract
RAES access fee, if a linkage order is
executed in whole or in part on RAES,
and (v) $.10 license fee on transactions
in MNX and NDX options.6 Satisfaction
Orders are not assessed Exchange fees.
The Exchange believes that extension
of the Linkage fee pilot program until
July 31, 2006 will give the Exchange and
the Commission further opportunity to
evaluate the appropriateness of Linkage
fees.
2. Statutory Basis.
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act 7 in general, and
furthers the objectives of Section
6(b)(4) 8 of the Act in particular, in that
it is designed to provide for the
equitable allocation of reasonable dues,
fees, and other charges among CBOE
members and other persons using its
facilities.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CBOE does not believe that the
proposed rule change will impose any
burden on competition that is not
necessary or appropriate in furtherance
of purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received from
Members, Participants or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. 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 rulecomments@sec.gov. Please include File
6 See
CBOE Fees Schedule, Footnote 15.
U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(4).
7 15
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20:48 Jul 26, 2005
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43475
fees and other charges among its
members and other persons using its
facilities. The Commission believes that
Paper Comments
the extension of the Linkage fee pilot
• Send paper comments in triplicate
until July 31, 2006 will give the
to Jonathan G. Katz, Secretary,
Commission further opportunity to
Securities and Exchange Commission,
evaluate whether such fees are
100 F Street, NE., Washington, DC
appropriate.
20549–9303.
The Commission finds good cause,
All submissions should refer to File
pursuant to Section 19(b)(2) of the
Number SR–CBOE–2005–54. This file
Act,12 for approving the proposed rule
number should be included on the
change prior to the thirtieth day after
subject line if e-mail is used. To help the the date of publication of the notice of
Commission process and review your
the filing thereof in the Federal
comments more efficiently, please use
Register. The Commission believes that
only one method. The Commission will granting accelerating approval will
post all comments on the Commission’s preserve the Exchange’s existing pilot
Internet Web site (https://www.sec.gov/
program for Linkage fees without
rules/sro.shtml). Copies of the
interruption as the CBOE and the
submission, all subsequent
Commission further consider the
amendments, all written statements
appropriateness of Linkage fees.
with respect to the proposed rule
V. Conclusion
change that are filed with the
Commission, and all written
It is therefore ordered, pursuant to
communications relating to the
Section 19(b)(2) of the Act 13 that the
proposed rule change between the
proposed rule change (SR–CBOE–2005–
Commission and any person, other than 54) is hereby approved on an
those that may be withheld from the
accelerated basis for a pilot period to
public in accordance with the
expire on July 31, 2006.
provisions of 5 U.S.C. 552, will be
For the Commission, by the Division of
available for inspection and copying in
Market Regulation, pursuant to delegated
the Commission’s Public Reference
authority.14
Section, 100 F Street, NE., Washington,
Jonathan G. Katz,
DC 20549. Copies of such filing also will
Secretary.
be available for inspection and copying
[FR Doc. E5–3985 Filed 7–26–05; 8:45 am]
at the principal office of the CBOE. All
BILLING CODE 8010–01–P
comments received will be posted
without change; the Commission does
not edit personal identifying
SECURITIES AND EXCHANGE
information from submissions. You
COMMISSION
should submit only information that
you wish to make available publicly. All [Release No. 34–52062; File No. SR–CHX–
2004–03]
submissions should refer to File
Number SR–CBOE–2005–54 and should
Self-Regulatory Organizations;
be submitted on or before August 17,
Chicago Stock Exchange, Inc.; Order
2005.
Approving Proposed Rule Change
IV. Commission’s Findings and Order
Relating to Standards for Manual
Granting Accelerated Approval of
Execution of Market and Marketable
Proposed Rule Change
Limit Orders
After careful consideration, the
July 19, 2005.
Commission finds that the proposed
On February 11, 2004, the Chicago
rule change is consistent with the
Stock Exchange, Incorporated (‘‘CHX’’),
requirements of the Act and the rules
filed with the Securities and Exchange
and regulations thereunder, applicable
Commission (‘‘Commission’’), pursuant
to a national securities exchange,9 and,
to Section 19(b)(1) of the Securities
in particular, with the requirements of
Exchange Act of 1934 (‘‘Act’’),1 and
Section 6(b) of the Act 10 and the rules
Rule 19b–4 thereunder,2 a proposed rule
and regulations thereunder. The
change to amend Article XX, Rule 37 to
Commission finds that the proposed
eliminate a specific requirement that a
rule change is consistent with Section
specialist execute eligible orders at the
6(b)(4) of the Act,11 which requires that
the rules of the Exchange provide for the price and size associated with the
national best bid or offer (‘‘NBBO’’) and
equitable allocation of reasonable dues,
Number SR–CBOE–2005–54 on the
subject line.
9 In approving this rule, the Commission notes
that it has considered its impact on efficiency,
competition and capital formation. 15 U.S.C. 78c(f).
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(4).
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
12 15
U.S.C. 78s(b)(2).
13 Id.
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Federal Register / Vol. 70, No. 143 / Wednesday, July 27, 2005 / Notices
replace it with a requirement that
specialists use reasonable diligence to
ascertain the best available price for the
security so that the resultant execution
price is as favorable to the order sender
as possible under prevailing market
conditions. The new rule sets out factors
that will be considered by the CHX in
determining whether the specialist used
reasonable diligence. On December 14,
2004, the CHX filed Amendment No. 1
to its original submission. The proposed
rule change, as amended, was published
for comment in the Federal Register on
December 22, 2004.3 The Commission
received no comment letters with
respect to the proposal.
After careful review, the Commission
finds that the proposed rule change, as
amended, is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange.4 In
particular, the Commission believes that
the proposed rule change is consistent
with Section 6(b)(5) of the Act,5 which
requires, among other things, that an
exchange’s rules be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, and, in general, to
protect investors and the public interest.
Specialists who execute market and
marketable limit orders must, among
other things, satisfy their duty of best
execution by executing customer trades
at the most favorable terms reasonably
available under the circumstances. As
amended, Article XX, Rule 37 will
require specialists to use reasonable
diligence to find the best available price
for the security so that the resultant
execution price is as favorable to the
order sender as possible under
prevailing market conditions.
Furthermore, although CHX specialists
no longer would be explicitly required
to execute eligible orders at the NBBO,
if the amended standard results in
specialists effecting orders at a prices
worse than the NBBO, this information
would be reflected in the statistics that
the CHX must produce pursuant to Rule
11Ac1–5.6 Broker-dealers that route
orders to the CHX would have to
consider this information in connection
with their duty to obtain best execution
on behalf of their customers.
In addition, the Commission notes
that the Exchange has committed to
continue surveillance over order
3 See Securities Exchange Act Release No. 50865
(December 16, 2004), 69 FR 76804.
4 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
5 15 U.S.C. 78f(b)(5).
6 17 CFR 240.11Ac1–5.
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19:40 Jul 26, 2005
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executions to ensure that specialists are
using reasonable diligence to find the
best available price for their customers.
The Commission expects that such
surveillance will be proactive and that
meaningful disciplinary action will be
taken against specialists found to have
violated the rule.
For the foregoing reasons, the
Commission finds that the proposed
rule change is consistent with the Act
and the rules and regulations
thereunder applicable to a national
securities exchange, and, in particular,
Section 6(b)(5) of the Act.7
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,8 that the
proposed rule change (SR–CHX–2004–
03) be, and hereby is, approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.9
Jonathan G. Katz,
Secretary.
[FR Doc. E5–3980 Filed 7–26–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52085; File No. SR–FICC–
2005–13]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend the
Procedure for Fine Waivers and To
Make Other Technical and
Administrative Amendments
July 20, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
July 15, 2005, the Fixed Income Clearing
Corporation (‘‘FICC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change described in Items I, II, and III
below, which items have been prepared
primarily by FICC. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested parties.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The purpose of the proposed rule
change is to amend the: (1) Government
Securities Division (‘‘GSD’’) and
Mortgage-Backed Securities Division
(‘‘MBSD’’) rules to allow the
PO 00000
7 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(2).
9 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
Membership and Risk Management
Committee (‘‘Committee’’) to delegate
fine waiver decisions to management
while retaining the ability to override
management’s decision; (2) GSD and
MBSD rules to eliminate the automatic
placement on the Watch List of FICC
members who fail to notify FICC within
two business days of first learning of
their non-compliance with FICC’s
membership standards; (3) MBSD rules
to broaden the reference to ‘‘net worth;’’
(4) MBSD rules by adding a
confidentiality clause; and (5) GSD rules
to make a technical change by moving
an incorrectly placed ‘‘and.’’
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FICC 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. FICC has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of these statements.2
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Management Waiver of Fines
Currently, pursuant to GSD Rule 37
(‘‘Hearing Procedures’’), Section 1
(‘‘General’’) and MBSD Article V
(‘‘Miscellaneous’’), Rule 3 (‘‘Fines and
Other Sanctions’’), each time a member
requests that an assessed fine be waived,
FICC management makes a
determination to accept or reject the
waiver request based on a review of the
circumstances leading to the disputed
fine. FICC management then presents its
determination to the Committee for
ratification at its next regularly
scheduled meeting. Final
determinations by the Committee may
be appealed according to the GSD and
MBSD rules.
The need for Committee approval of
management decisions with respect to
fine assessments delays final decisions
for members because the Committee
only meets approximately every two
months. The Committee has routinely
agreed with management’s decisions
regarding fine waivers. For these
reasons, the Committee at this time feels
comfortable delegating decisions on fine
waiver requests to management.
8 15
Frm 00087
Fmt 4703
Sfmt 4703
2 The Commission has modified the text of the
summaries prepared by FICC.
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]]>Agencies
[Federal Register Volume 70, Number 143 (Wednesday, July 27, 2005)]
[Notices]
[Pages 43475-43476]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-3980]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52062; File No. SR-CHX-2004-03]
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Order Approving Proposed Rule Change Relating to Standards for Manual
Execution of Market and Marketable Limit Orders
July 19, 2005.
On February 11, 2004, the Chicago Stock Exchange, Incorporated
(``CHX''), filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend Article XX, Rule 37 to eliminate a
specific requirement that a specialist execute eligible orders at the
price and size associated with the national best bid or offer
(``NBBO'') and
[[Page 43476]]
replace it with a requirement that specialists use reasonable diligence
to ascertain the best available price for the security so that the
resultant execution price is as favorable to the order sender as
possible under prevailing market conditions. The new rule sets out
factors that will be considered by the CHX in determining whether the
specialist used reasonable diligence. On December 14, 2004, the CHX
filed Amendment No. 1 to its original submission. The proposed rule
change, as amended, was published for comment in the Federal Register
on December 22, 2004.\3\ The Commission received no comment letters
with respect to the proposal.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 50865 (December 16,
2004), 69 FR 76804.
---------------------------------------------------------------------------
After careful review, the Commission finds that the proposed rule
change, as amended, is consistent with the requirements of the Act and
the rules and regulations thereunder applicable to a national
securities exchange.\4\ In particular, the Commission believes that the
proposed rule change is consistent with Section 6(b)(5) of the Act,\5\
which requires, among other things, that an exchange's rules be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, and, in general, to
protect investors and the public interest. Specialists who execute
market and marketable limit orders must, among other things, satisfy
their duty of best execution by executing customer trades at the most
favorable terms reasonably available under the circumstances. As
amended, Article XX, Rule 37 will require specialists to use reasonable
diligence to find the best available price for the security so that the
resultant execution price is as favorable to the order sender as
possible under prevailing market conditions. Furthermore, although CHX
specialists no longer would be explicitly required to execute eligible
orders at the NBBO, if the amended standard results in specialists
effecting orders at a prices worse than the NBBO, this information
would be reflected in the statistics that the CHX must produce pursuant
to Rule 11Ac1-5.\6\ Broker-dealers that route orders to the CHX would
have to consider this information in connection with their duty to
obtain best execution on behalf of their customers.
---------------------------------------------------------------------------
\4\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
\5\ 15 U.S.C. 78f(b)(5).
\6\ 17 CFR 240.11Ac1-5.
---------------------------------------------------------------------------
In addition, the Commission notes that the Exchange has committed
to continue surveillance over order executions to ensure that
specialists are using reasonable diligence to find the best available
price for their customers. The Commission expects that such
surveillance will be proactive and that meaningful disciplinary action
will be taken against specialists found to have violated the rule.
For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with the Act and the rules and regulations
thereunder applicable to a national securities exchange, and, in
particular, Section 6(b)(5) of the Act.\7\
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\8\ that the proposed rule change (SR-CHX-2004-03) be, and hereby
is, approved.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
---------------------------------------------------------------------------
\9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Jonathan G. Katz,
Secretary.
[FR Doc. E5-3980 Filed 7-26-05; 8:45 am]
BILLING CODE 8010-01-P
