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, 71003-71004 [E6-20719]

Download as PDF 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 71004 Federal Register / Vol. 71, No. 235 / Thursday, December 7, 2006 / Notices filing, concurrently with this proposal, a separate proposal to charge a fee to recipients of orders that are sent through this service.8 The Exchange would provide these routing services in compliance with its rules and with the provisions of the Act and the rules thereunder, including, but not limited to, the requirements of Sections 6(b)(4) and (5) of the Act 9 that the rules of a national securities exchange provide for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities, and not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. 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).10 The Exchange believes that the proposed changes are consistent with Section 6(b)(5) of the Act,11 because they would promote just and equitable principles of trade, remove impediments to, and perfect the mechanism of, a free and open market and a national market system, and, in general, protect investors and the public interest by confirming that the CHX would operate its routing services as a facility of the Exchange, in a manner consistent with the requirements of the Act. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule changes 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. sroberts on PROD1PC70 with NOTICES manner of operation of any destination to which the participant asked that an order be routed. 8 See File No. SR–CHX–2006–36. 9 15 U.S.C. 78f(b)(4)–(5). 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(5). 17:29 Dec 06, 2006 Jkt 211001 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 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated the proposed rule change as one that: (i) Does not significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; and VerDate Aug<31>2005 (iii) does not become operative for 30 days from the date of filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. Therefore, the foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 12 and Rule 19b–4(f)(6) thereunder.13 Pursuant to Rule 19b–4(f)(6)(iii) under the Act, a proposal does not become operative for 30 days after the date of its filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. The CHX has requested that the Commission waive the 30-day operative delay. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because it will allow participants to begin to utilize the proposed routing function in connection with the implementation of the Exchange’s new trading model. For these reasons, the Commission designates that the proposed rule change become operative immediately. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate the 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. 12 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). Pursuant to Rule 19b– 4(f)(6)(iii) under the Act, the Exchange is required to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has requested that the Commission waive the 5-day pre-filing notice requirement. The Commission has determined to waive this requirement for this filing. 13 17 Frm 00059 Fmt 4703 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.14 Florence E. Harmon, Deputy Secretary. [FR Doc. E6–20719 Filed 12–6–06; 8:45 am] BILLING CODE 8011–01–P • 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 Number SR–CHX–2006–34 on the subject line. PO 00000 Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File No. SR–CHX–2006–34. 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 the filing also will be available for inspection and copying at the principal office of the Exchange. 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–2006–34 and should be submitted on or before December 28, 2006. Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54833; File No. SR–CHX– 2006–33] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change Amending Rules To Require Listed Companies To Make Securities Eligible for the Direct Registration System November 29, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 14 17 E:\FR\FM\07DEN1.SGM CFR 200.30–3(a)(12). 07DEN1

Agencies

[Federal Register Volume 71, Number 235 (Thursday, December 7, 2006)]
[Notices]
[Pages 71003-71004]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-20719]


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SECURITIES AND EXCHANGE COMMISSION

[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

November 30, 2006.
    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, Inc. (``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 Exchange. The CHX has 
filed this proposal pursuant to Section 19(b)(3)(A)(iii) 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.
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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)(iii).
    \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 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 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\
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    \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[reg] 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).
---------------------------------------------------------------------------

    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

[[Page 71004]]

filing, concurrently with this proposal, a separate proposal to charge 
a fee to recipients of orders that are sent through this service.\8\
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    \7\ 17 CFR 240.19b-4. The Exchange's rules and fees, however, 
would not address the fees or manner of operation of any destination 
to which the participant asked that an order be routed.
    \8\ See File No. SR-CHX-2006-36.
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    The Exchange would provide these routing services in compliance 
with its rules and with the provisions of the Act and the rules 
thereunder, including, but not limited to, the requirements of Sections 
6(b)(4) and (5) of the Act \9\ that the rules of a national securities 
exchange provide for the equitable allocation of reasonable dues, fees, 
and other charges among its members and issuers and other persons using 
its facilities, and not be designed to permit unfair discrimination 
between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b)(4)-(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).\10\ The Exchange believes that the 
proposed changes are consistent with Section 6(b)(5) of the Act,\11\ 
because they would promote just and equitable principles of trade, 
remove impediments to, and perfect the mechanism of, a free and open 
market and a national market system, and, in general, protect investors 
and the public interest by confirming that the CHX would operate its 
routing services as a facility of the Exchange, in a manner consistent 
with the requirements of the Act.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule changes 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

    The Exchange has designated the proposed rule change as one that: 
(i) Does not significantly affect the protection of investors or the 
public interest; (ii) does not impose any significant burden on 
competition; and (iii) does not become operative for 30 days from the 
date of filing, or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public interest. 
Therefore, the foregoing rule change has become effective pursuant to 
Section 19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(6) 
thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii) 
under the Act, the Exchange is required to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has requested that the Commission waive the 5-day pre-
filing notice requirement. The Commission has determined to waive 
this requirement for this filing.
---------------------------------------------------------------------------

    Pursuant to Rule 19b-4(f)(6)(iii) under the Act, a proposal does 
not become operative for 30 days after the date of its filing, or such 
shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest. The CHX has requested 
that the Commission waive the 30-day operative delay. The Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest because it will allow 
participants to begin to utilize the proposed routing function in 
connection with the implementation of the Exchange's new trading model. 
For these reasons, the Commission designates that the proposed rule 
change become operative immediately.
    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate the 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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-CHX-2006-34 on the subject line.

Paper Comments

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

All submissions should refer to File No. SR-CHX-2006-34. 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 the filing 
also will be available for inspection and copying at the principal 
office of the Exchange. 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-2006-34 and should be submitted on or before December 28, 2006.
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E6-20719 Filed 12-6-06; 8:45 am]
BILLING CODE 8011-01-P