Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Participant Fees and Credits, 71002-71003 [E6-20715]

Download as PDF 71002 Federal Register / Vol. 71, No. 235 / Thursday, December 7, 2006 / Notices copying at the principal office of BSE and on BSE’s Web site, www.bse.com. 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–BSE–2006–46 and should be submitted on or before December 28, 2006. For the Commission by the Division of Market Regulation, pursuant to delegated authority.8 Nancy M. Morris, Secretary. [FR Doc. E6–20730 Filed 12–6–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54842; File No. SR–CHX– 2006–35] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Participant Fees and Credits November 30, 2006. sroberts on PROD1PC70 with NOTICES 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 November 13, 2006, 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 CHX has designated this proposal as one establishing or changing a member due, fee, or other charge imposed by the CHX pursuant to Section 19(b)(3)(A)(ii) of the Act,3 and Rule 19b–4(f)(2) 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The CHX proposes to amend its Schedule of Participant Fees and Credits (the ‘‘Fee Schedule’’) to include a reduction in the fees charged for orders routed through the NMS Linkage Plan to 8 17 CFR 200.30–3(a)(12). 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). 1 15 VerDate Aug<31>2005 17:29 Dec 06, 2006 Jkt 211001 The NASDAQ Stock Market, Inc. (‘‘Nasdaq’’). The text of this proposed rule change is available on the Exchange’s Web site at http:// www.chx.com/rules/proposed_rules.htm and in the Commission’s Public Reference Room. 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 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 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 Change 1. Purpose The Exchange’s Fee Schedule, among other things, identifies the fees that are charged to participants on account of outbound NMS Linkage Plan orders.5 Section E.6 of the Fee Schedule applies to orders that are Matching Systemeligible and therefore are routed from the Matching System to other market centers. Section E.8 of the Fee Schedule applies to orders that have not yet migrated to the Matching System and therefore are routed from the Exchange’s pre-new trading model facilities.6 When an outbound NMS Linkage Plan order is executed on another NMS Linkage participant market, that market will directly invoice the CHX for a transaction fee, in an amount that may not exceed the transaction fee that it would charge its own member for such an execution. The CHX is then responsible for payment of such invoice. Sections E.6 and E.8 of the Fee Schedule permit the CHX to collect a corresponding fee from the CHX participant that generated the outbound NMS Linkage Plan order. The CHX believes that it is appropriate to establish outbound NMS Linkage fee 5 See Securities Exchange Act Release No. 54548 (September 29, 2006), 71 FR 59159 (October 6, 2006) (SR–CHX–2006–28) (approving NMS Linkage Plan exchange-to-exchange billing procedures); Securities Exchange Act Release No. 54551 (September 29, 2006), 71 FR 59148 (October 6, 2006) (approving NMS Linkage Plan). 6 See Securities Exchange Act Release No. 54550 (September 29, 2006); 71 FR 59563 (October 10, 2006) (SR–CHX–2006–05) (approving rules to implement a new trading model). PO 00000 Frm 00057 Fmt 4703 Sfmt 4703 rates that reasonably correspond to the respective transaction fee rates being charged by the executing markets. Accordingly, it is submitting changes to Sections E.6 and E.8 of the Fee Schedule, to reflect recent developments regarding applicable transaction fees assessed by Nasdaq on account of NMS Linkage Plan executions.7 Specifically, the proposal would change the outbound fee for NMS Linkage orders routed to Nasdaq (in issues other than exchange-traded funds) from $.0030/share to $.0015/ share. This change is not applicable to orders for exchange-traded funds. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b)(4) of the Act 8 in that it provides for the equitable allocation of reasonable dues, fees and other charges among its members and is consistent with the allocation of dues, fees and other charges utilized by other selfregulatory organizations that have implemented trading platforms similar to the CHX new trading model. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any 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 Because the foregoing proposed rule change establishes or changes a due, fee or other charge imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the Act 9 and subparagraph (f)(2) of Rule 19b–4 thereunder.10 At any time within 60 days of the filing of such 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. 7 See Nasdaq Head Trader Alert #2006–176 (November 1, 2006, updated November 3, 2006). 8 15 U.S.C. 78f(b)(4). 9 15 U.S.C. 78s(b)(3)(A). 10 17 CFR 240.19b–4(f)(2). E:\FR\FM\07DEN1.SGM 07DEN1 Federal Register / Vol. 71, No. 235 / Thursday, December 7, 2006 / Notices 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: For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 Florence E. Harmon, Deputy Secretary. [FR Doc. E6–20715 Filed 12–6–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–CHX–2006–35 on the subject line. Paper Comments [Release No. 34–54846; File No. SR–CHX– 2006–34] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding the Implementation of a Communications or Routing Service • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. November 30, 2006. 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 Room. 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–2006–35 and should be submitted on or before December 28, 2006. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change sroberts on PROD1PC70 with NOTICES 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 November 16, 2006, the Chicago Stock Exchange, All submissions should refer to File Inc. (‘‘CHX’’ or ‘‘Exchange’’) filed with Number SR–CHX–2006–35. This file the Securities and Exchange number should be included on the Commission (‘‘Commission’’) the subject line if e-mail is used. To help the proposed rule change as described in Items I and II below, which Items have Commission process and review your been prepared by the Exchange. The comments more efficiently, please use only one method. The Commission will CHX has filed this proposal pursuant to post all comments on the Commission’s Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which Internet Web site (http://www.sec.gov/ renders the proposal effective upon rules/sro.shtml). Copies of the filing with the Commission. The submission, all subsequent Commission is publishing this notice to amendments, all written statements solicit comments on the proposed rule with respect to the proposed rule change from interested persons. change that are filed with the The Exchange proposes to amend its rules to operate a service that allows its participants to route orders to any other destination connected to the CHX’s network. 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 11 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 1 15 VerDate Aug<31>2005 17:29 Dec 06, 2006 Jkt 211001 PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 71003 Exchange 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 As part of the Exchange’s new trading model, the Exchange proposes to operate a neutral communications service that allows its participants to route orders to any destination connected to the CHX’s network. Specifically, this service would allow participants to route orders to: (1) The CHX Matching System; (2) CHX institutional brokers; (3) market makers or other broker-dealers connected to the CHX’s network, which provide order handling and execution services in the over-the-counter market; and (4) other destinations (including order-routing vendors) that are connected to the CHX’s network.5 This communications or routing service would not effect trade executions and would not report trades to ‘‘the tape.’’ An order would not pass through the CHX market before going to an entity or market outside of the CHX (i.e., a participant could choose to route an order directly to any of the above destinations). A participant would be responsible for identifying the appropriate destination for any orders sent through the service and for ensuring that it had authority to access the selected destination; the CHX would merely provide the mechanism by which orders (and associated messages) could be routed by a participant to a destination and from the destination back to the participant.6 This service would be a facility of the Exchange. As a result, the Exchange would submit fee changes, and any applicable changes to its rules, to the Commission as required by Rule 19b–4 under the Act in connection with its routing.7 Accordingly, the Exchange is 5 Details associated with the operation of these routing services would be set out on the Exchange’s Web site or could be the subject of an agreement between the CHX and any participants that seek to use the services. 6 This service is an extension of a service that the Exchange already provides to its participants— current order-sending participants route orders through access provided by the Exchange to the MAX trading system and to the CHX’s institutional brokers. Institutional brokers and specialists use CHX-provided connectivity to route orders to the MAX trading system (and, for securities that have been transitioned to the new trading model, to the CHX’s new Matching System). 7 17 CFR 240.19b–4. The Exchange’s rules and fees, however, would not address the fees or Continued E:\FR\FM\07DEN1.SGM 07DEN1

Agencies

[Federal Register Volume 71, Number 235 (Thursday, December 7, 2006)]
[Notices]
[Pages 71002-71003]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-20715]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54842; File No. SR-CHX-2006-35]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Participant Fees and Credits

November 30, 2006.
    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 November 13, 2006, 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 CHX has 
designated this proposal as one establishing or changing a member due, 
fee, or other charge imposed by the CHX pursuant to Section 
19(b)(3)(A)(ii) of the Act,\3\ and Rule 19b-4(f)(2) 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.
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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 CHX proposes to amend its Schedule of Participant Fees and 
Credits (the ``Fee Schedule'') to include a reduction in the fees 
charged for orders routed through the NMS Linkage Plan to The NASDAQ 
Stock Market, Inc. (``Nasdaq''). The text of this proposed rule change 
is available on the Exchange's Web site at http://www.chx.com/rules/
proposed_rules.htm and in the Commission's Public Reference Room.

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 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 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 Change

1. Purpose
    The Exchange's Fee Schedule, among other things, identifies the 
fees that are charged to participants on account of outbound NMS 
Linkage Plan orders.\5\ Section E.6 of the Fee Schedule applies to 
orders that are Matching System-eligible and therefore are routed from 
the Matching System to other market centers. Section E.8 of the Fee 
Schedule applies to orders that have not yet migrated to the Matching 
System and therefore are routed from the Exchange's pre-new trading 
model facilities.\6\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 54548 (September 29, 
2006), 71 FR 59159 (October 6, 2006) (SR-CHX-2006-28) (approving NMS 
Linkage Plan exchange-to-exchange billing procedures); Securities 
Exchange Act Release No. 54551 (September 29, 2006), 71 FR 59148 
(October 6, 2006) (approving NMS Linkage Plan).
    \6\ See Securities Exchange Act Release No. 54550 (September 29, 
2006); 71 FR 59563 (October 10, 2006) (SR-CHX-2006-05) (approving 
rules to implement a new trading model).
---------------------------------------------------------------------------

    When an outbound NMS Linkage Plan order is executed on another NMS 
Linkage participant market, that market will directly invoice the CHX 
for a transaction fee, in an amount that may not exceed the transaction 
fee that it would charge its own member for such an execution. The CHX 
is then responsible for payment of such invoice. Sections E.6 and E.8 
of the Fee Schedule permit the CHX to collect a corresponding fee from 
the CHX participant that generated the outbound NMS Linkage Plan order. 
The CHX believes that it is appropriate to establish outbound NMS 
Linkage fee rates that reasonably correspond to the respective 
transaction fee rates being charged by the executing markets. 
Accordingly, it is submitting changes to Sections E.6 and E.8 of the 
Fee Schedule, to reflect recent developments regarding applicable 
transaction fees assessed by Nasdaq on account of NMS Linkage Plan 
executions.\7\ Specifically, the proposal would change the outbound fee 
for NMS Linkage orders routed to Nasdaq (in issues other than exchange-
traded funds) from $.0030/share to $.0015/share. This change is not 
applicable to orders for exchange-traded funds.
---------------------------------------------------------------------------

    \7\ See Nasdaq Head Trader Alert 2006-176 (November 1, 
2006, updated November 3, 2006).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(4) of the Act \8\ in that it provides for the 
equitable allocation of reasonable dues, fees and other charges among 
its members and is consistent with the allocation of dues, fees and 
other charges utilized by other self-regulatory organizations that have 
implemented trading platforms similar to the CHX new trading model.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will 
impose any 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

    Because the foregoing proposed rule change establishes or changes a 
due, fee or other charge imposed by the Exchange, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and 
subparagraph (f)(2) of Rule 19b-4 thereunder.\10\ At any time within 60 
days of the filing of such 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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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(2).

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[[Page 71003]]

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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-CHX-2006-35 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-CHX-2006-35. 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 (http://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 Room. 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-2006-35 and should be submitted on or before 
December 28, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E6-20715 Filed 12-6-06; 8:45 am]
BILLING CODE 8011-01-P