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, 71004-71006 [E6-20731]

Download as PDF 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 (https://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 (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference 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 Federal Register / Vol. 71, No. 235 / Thursday, December 7, 2006 / Notices (‘‘Act’’),1 notice is hereby given that on October 30, 2006, the Chicago Stock Exchange, Inc. (‘‘CHX’’) 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 CHX. 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 CHX proposes to amend its listing standards to require certain issuers to make their securities eligible for a Direct Registration System (‘‘DRS’’) operated by a securities depository registered as a clearing agency under Section 17A of the Act. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, 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. CHX 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) Purpose The Direct Registration System (‘‘DRS’’) allows an investor to establish, either through an issuer’s transfer agent or through the investor’s broker-dealer, a book-entry position in a security and to electronically transfer that position between the transfer agent and the investor’s broker-dealer through a facility currently administered by The Depository Trust Company (‘‘DTC’’).3 DRS, therefore, enables an investor to have securities registered in her name without having a securities certificate 1 15 U.S.C. 78s(b)(1). Commission has modified portions of the text of the summaries prepared by the CHX. 3 Currently, the only registered clearing agency operating a DRS is DTC. For a description of DRS and the DRS facilities administered by DTC, see Securities Exchange Act Release Nos. 37931 (November 7, 1996), 61 FR 58600 (November 15, 1996), [File No. SR–DTC–96–15] (order granting approval to establish DRS) and 41862 (September 10, 1999), 64 FR 51162 (September 21, 1999), [File No. SR–DTC–99–16] (order approving implementation of the Profile Modification System). sroberts on PROD1PC70 with NOTICES 2 The VerDate Aug<31>2005 17:29 Dec 06, 2006 Jkt 211001 issued to her and to electronically transfer her securities to her brokerdealer in order to effect a securities transaction without the risk and delays associated with the use of securities certificates. Investor holding securities in DRS retain the rights associated with securities certificates (such as voting) without the responsibility of holding and safeguarding those certificates. In addition, corporate actions (such as reverse stock splits and mergers) can be handled electronically with no securities certificates to be returned to or received from the transfer agent. To reduce the number of transactions in securities for which settlement is effected by the physical delivery of securities certificates to and reduce the risks, costs, and delays associated with the physical processing of securities certificates, the CHX seeks to amend its listing standards by adding paragraph (h) to Rule 1 4 that would require certain issuers to make their securities eligible for DRS.5 As proposed, the new rule would require that any security initially listing on CHX on or after January 1, 2007, must be eligible for a DRS that is operated by a securities depository.6 This requirement, however, would not extend to (i) securities of companies which already have securities listed on CHX, (ii) securities of companies which immediately prior to such listing had securities listed on another national securities exchange, (iii) derivative products, or (iv) securities (other than stocks) which are book-entry only. Under the proposed rule, on and after January 1, 2008, all securities listed on CHX must be eligible for a DRS that is operated by a securities depository.7 CHX understands that issuers and transfer agents may incur initial costs when making an issue DRS-eligible. As an initial matter, the issuer must have 4 The exact text of the CHX proposed rule change is set forth in its filing, which can be found at https://www.chx.com/rules/proposed_rules.htm. 5 The Commission has approved rule changes filed by the New York Stock Exchange LLC, NASDAQ Stock Market LLC, the American Stock Exchange LLC, and the NYSE Arca, Inc. that would require certain listed companies securities become DRS eligible. Securities Exchange Act Release Nos. 54289 (August 8, 2006), 71 FR 47278 (August 16, 2006) [File No. SR–NYSE–2006–29]; 54288 (August 8, 2006), 71 FR 47276 (August 16, 2006) [File No. SR–NASDAQ–2006–008]; 54290 (August 8, 2006), 71 FR 47262 (August 16, 2006) [File No. SR–Amex– 2006–40]; 54410 (September 7, 2006), 71 FR 54316 (September 14, 2006) [File No. SR–NYSE Arca– 2006–31]. 6 Under the proposed rule, a ‘‘securities depository’’ would mean a securities depository registered as a clearing agency under Section 17A(b)(2) of the Act. 7 Securities (other than stock) that are book-entryonly and derivative products would continue to be excluded from the DRS requirement. PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 71005 a transfer agent that is a DRS Limited Participant.8 Transfer agents will need to meet certain DTC criteria, such as insurance and connectivity requirements in order to become DRS Limited Participants and an issuer’s corporate documents, such as its bylaws or corporate charters, may need to be amended to permit the issuance of bookentry shares. CHX believes that the proposed deadlines as set forth above would allow issuers and transfer agents an appropriate amount of time to meet applicable requirements. (2) Statutory Basis CHX believes the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange. In particular, the proposed rule change is consistent with Section 6(b)(5) of the Act because it would promote just and equitable principles of trade, foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, remove impediments to 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 certain CHX’s issuers would be required to make their securities eligible for a DRS operated by a securities depository.9 (B) Self-Regulatory Organization’s Statement on Burden on Competition CHX does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others CHX has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within thirty-five days of the date of publication of this notice in the Federal Register or within such longer period: 8 DTC’s rules require that a transfer agent (including an issuer acting as its own transfer agent) acting for a company issuing securities in DRS must be a DRS Limited Participant. Securities Exchange Act Release No. 37931 (November 7, 1996), 61 FR 58600 (November 15, 1996), [File No. SR–DTC–96– 15]. 9 15 U.S.C. 78f(b)(5). E:\FR\FM\07DEN1.SGM 07DEN1 71006 Federal Register / Vol. 71, No. 235 / Thursday, December 7, 2006 / Notices (i) as the Commission may designate up to ninety days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve such proposed rule change or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. 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: sroberts on PROD1PC70 with NOTICES 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 Number SR–CHX–2006–33 in the subject line. should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CHX–2006–33 and should be submitted on or before December 28, 2006. For the Commission by the Division of Market Regulation, pursuant to delegated authority.10 Nancy M. Morris, Secretary. [FR Doc. E6–20731 Filed 12–6–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54841; File No. SR–ISE– 2006–69] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Fee Changes 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 Paper Comments 27, 2006, the International Securities • Send paper comments in triplicate Exchange, LLC (the ‘‘Exchange’’ or the to Nancy M. Morris, Secretary, ‘‘ISE’’) filed with the Securities and Securities and Exchange Commission, Exchange Commission the proposed 100 F Street, NE., Washington, DC rule change as described in Items I, II, 20549–1090. and III below, which items have been All submissions should refer to File prepared by the self-regulatory Number SR–CHX–2006–33. This file organization. The ISE has designated number should be included on the subject line if e-mail is used. To help the this proposal as one changing a fee imposed by the ISE under Section Commission process and review your 19(b)(3)(A)(ii) of the Act 3 and Rule 19b– comments more efficiently, please use 4 only one method. The Commission will 4(f)(2) thereunder, which renders the proposal effective upon filing with the post all comments on the Commission’s Commission. The Commission is Internet Web site (https://www.sec.gov/ publishing this notice to solicit rules/sro.shtml). Copies of the comments on the proposed rule change submission, all subsequent from interested persons. amendments, all written statements with respect to the proposed rule I. Self-Regulatory Organization’s change that are filed with the Statement of the Terms of Substance of Commission, and all written the Proposed Rule Change communications relating to the The ISE is proposing to amend its proposed rule change between the Schedule of Fees to extend until June Commission and any person, other than 30, 2007, a pilot program that (i) caps those that may be withheld from the and waives execution and comparison public in accordance with the fees for transactions in options on the provisions of 5 U.S.C. 552, will be NASDAQ–100 Index Tracking Stock available for inspection and copying in (‘‘QQQQ’’) when a member transacts a the Commission’s Public Reference certain number of QQQQ option Section, 100 F Street, NE., Washington, contracts, and (ii) reduces and waives DC 20549. Copies of such filings also the facilitation execution and will be available for inspection and comparison fees when a member copying at the principal office of CHX and on CHX’s Web site, www.chx.com. 10 17 CFR 200.30–3(a)(12). All comments received will be posted 1 15 U.S.C. 78s(b)(1). without change; the Commission does 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). not edit personal identifying 4 17 CFR 240.19b–4(f)(2). information from submissions. You VerDate Aug<31>2005 17:29 Dec 06, 2006 Jkt 211001 PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 transacts a certain number of contracts through the Exchange’s Facilitation Mechanism. The text of the proposed rule change is available on the Exchange’s Web site at (https:// www.iseoptions.com/legal/proposedrule-changes.asp), at the ISE’s principal office, and at 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 ISE 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 ISE 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 ISE proposes to amend its Schedule of Fees to extend until June 30, 2007, a pilot program that (i) caps and waives execution and comparison fees for transactions in options on the QQQQ when a member transacts a certain number of QQQQ option contracts, and (ii) reduces and waives the facilitation execution and comparison fees when a member transacts a certain number of contracts through the Exchange’s Facilitation Mechanism.5 Under the QQQQ pilot program, when a member’s monthly average daily volume (‘‘A.D.V.’’) in QQQQ options reaches 10,000 contracts, the member’s execution fee for the next 2,000 QQQQ option contracts is reduced by $.10 per contract.6 Further, when a member’s monthly A.D.V. in QQQQ options reaches 12,000 contracts, the Exchange waives the entire execution fee and the comparison fee for each QQQQ option contract traded thereafter. The Exchange instituted this pilot program in November 2003 for a six month period, 5 Earlier this year, the Exchange amended the pilot program by increasing the threshold levels at which the fee waiver and reduction applied. See Securities Exchange Act Release No. 54016 (June 19, 2006), 71 FR 36575 (June 27, 2006). 6 Telephone conversation between Samir Patel, Assistant General Counsel, ISE, and Hong-anh Tran, Special Counsel, Division of Market Regulation, Commission, on November 28, 2006 (clarifying that the A.D.V. threshold is calculated on a monthly basis). E:\FR\FM\07DEN1.SGM 07DEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 71, Number 235 (Thursday, December 7, 2006)]
[Notices]
[Pages 71004-71006]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-20731]


-----------------------------------------------------------------------

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

[[Page 71005]]

(``Act''),\1\ notice is hereby given that on October 30, 2006, the 
Chicago Stock Exchange, Inc. (``CHX'') 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 CHX. The Commission is publishing this notice to solicit comments on 
the proposed rule change from interested parties.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CHX proposes to amend its listing standards to require certain 
issuers to make their securities eligible for a Direct Registration 
System (``DRS'') operated by a securities depository registered as a 
clearing agency under Section 17A of the Act.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, 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. CHX has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of these 
statements.\2\
---------------------------------------------------------------------------

    \2\ The Commission has modified portions of the text of the 
summaries prepared by the CHX.
---------------------------------------------------------------------------

(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

(1) Purpose
    The Direct Registration System (``DRS'') allows an investor to 
establish, either through an issuer's transfer agent or through the 
investor's broker-dealer, a book-entry position in a security and to 
electronically transfer that position between the transfer agent and 
the investor's broker-dealer through a facility currently administered 
by The Depository Trust Company (``DTC'').\3\ DRS, therefore, enables 
an investor to have securities registered in her name without having a 
securities certificate issued to her and to electronically transfer her 
securities to her broker-dealer in order to effect a securities 
transaction without the risk and delays associated with the use of 
securities certificates.
---------------------------------------------------------------------------

    \3\ Currently, the only registered clearing agency operating a 
DRS is DTC. For a description of DRS and the DRS facilities 
administered by DTC, see Securities Exchange Act Release Nos. 37931 
(November 7, 1996), 61 FR 58600 (November 15, 1996), [File No. SR-
DTC-96-15] (order granting approval to establish DRS) and 41862 
(September 10, 1999), 64 FR 51162 (September 21, 1999), [File No. 
SR-DTC-99-16] (order approving implementation of the Profile 
Modification System).
---------------------------------------------------------------------------

    Investor holding securities in DRS retain the rights associated 
with securities certificates (such as voting) without the 
responsibility of holding and safeguarding those certificates. In 
addition, corporate actions (such as reverse stock splits and mergers) 
can be handled electronically with no securities certificates to be 
returned to or received from the transfer agent.
    To reduce the number of transactions in securities for which 
settlement is effected by the physical delivery of securities 
certificates to and reduce the risks, costs, and delays associated with 
the physical processing of securities certificates, the CHX seeks to 
amend its listing standards by adding paragraph (h) to Rule 1 \4\ that 
would require certain issuers to make their securities eligible for 
DRS.\5\ As proposed, the new rule would require that any security 
initially listing on CHX on or after January 1, 2007, must be eligible 
for a DRS that is operated by a securities depository.\6\ This 
requirement, however, would not extend to (i) securities of companies 
which already have securities listed on CHX, (ii) securities of 
companies which immediately prior to such listing had securities listed 
on another national securities exchange, (iii) derivative products, or 
(iv) securities (other than stocks) which are book-entry only. Under 
the proposed rule, on and after January 1, 2008, all securities listed 
on CHX must be eligible for a DRS that is operated by a securities 
depository.\7\
---------------------------------------------------------------------------

    \4\ The exact text of the CHX proposed rule change is set forth 
in its filing, which can be found at https://www.chx.com/rules/
proposed_rules.htm.
    \5\ The Commission has approved rule changes filed by the New 
York Stock Exchange LLC, NASDAQ Stock Market LLC, the American Stock 
Exchange LLC, and the NYSE Arca, Inc. that would require certain 
listed companies securities become DRS eligible. Securities Exchange 
Act Release Nos. 54289 (August 8, 2006), 71 FR 47278 (August 16, 
2006) [File No. SR-NYSE-2006-29]; 54288 (August 8, 2006), 71 FR 
47276 (August 16, 2006) [File No. SR-NASDAQ-2006-008]; 54290 (August 
8, 2006), 71 FR 47262 (August 16, 2006) [File No. SR-Amex-2006-40]; 
54410 (September 7, 2006), 71 FR 54316 (September 14, 2006) [File 
No. SR-NYSE Arca-2006-31].
    \6\ Under the proposed rule, a ``securities depository'' would 
mean a securities depository registered as a clearing agency under 
Section 17A(b)(2) of the Act.
    \7\ Securities (other than stock) that are book-entry-only and 
derivative products would continue to be excluded from the DRS 
requirement.
---------------------------------------------------------------------------

    CHX understands that issuers and transfer agents may incur initial 
costs when making an issue DRS-eligible. As an initial matter, the 
issuer must have a transfer agent that is a DRS Limited Participant.\8\ 
Transfer agents will need to meet certain DTC criteria, such as 
insurance and connectivity requirements in order to become DRS Limited 
Participants and an issuer's corporate documents, such as its bylaws or 
corporate charters, may need to be amended to permit the issuance of 
book-entry shares. CHX believes that the proposed deadlines as set 
forth above would allow issuers and transfer agents an appropriate 
amount of time to meet applicable requirements.
---------------------------------------------------------------------------

    \8\ DTC's rules require that a transfer agent (including an 
issuer acting as its own transfer agent) acting for a company 
issuing securities in DRS must be a DRS Limited Participant. 
Securities Exchange Act Release No. 37931 (November 7, 1996), 61 FR 
58600 (November 15, 1996), [File No. SR-DTC-96-15].
---------------------------------------------------------------------------

(2) Statutory Basis
    CHX believes the proposed rule change is consistent with the 
requirements of the Act and the rules and regulations thereunder that 
are applicable to a national securities exchange. In particular, the 
proposed rule change is consistent with Section 6(b)(5) of the Act 
because it would promote just and equitable principles of trade, foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, remove impediments to 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 certain CHX's issuers would be required to make their 
securities eligible for a DRS operated by a securities depository.\9\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

(B) Self-Regulatory Organization's Statement on Burden on Competition

    CHX does not believe that the proposed rule change will impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants, or Others

    CHX has neither solicited nor received written comments on the 
proposed rule change.

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

    Within thirty-five days of the date of publication of this notice 
in the Federal Register or within such longer period:

[[Page 71006]]

(i) as the Commission may designate up to ninety days of such date if 
it finds such longer period to be appropriate and publishes its reasons 
for so finding or (ii) as to which the self-regulatory organization 
consents, the Commission will:
    (A) By order approve such proposed rule change or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml) or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-CHX-2006-33 in 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 Number SR-CHX-2006-33. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for inspection 
and copying in the Commission's Public Reference Section, 100 F Street, 
NE., Washington, DC 20549. Copies of such filings also will be 
available for inspection and copying at the principal office of CHX and 
on CHX's Web site, www.chx.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-CHX-2006-33 and should be submitted on or before 
December 28, 2006.
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\10\
Nancy M. Morris,
Secretary.
[FR Doc. E6-20731 Filed 12-6-06; 8:45 am]
BILLING CODE 8011-01-P

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