Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Modify Provisions Relating to Cross With Yield Orders, 49032 [E7-16838]

Download as PDF 49032 Federal Register / Vol. 72, No. 165 / Monday, August 27, 2007 / Notices III. Discussion SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56291; File No. SR–CHX– 2006–42] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Modify Provisions Relating to Cross With Yield Orders August 20, 2007. I. Introduction On December 22, 2006, the Chicago Stock Exchange, Inc. (‘‘CHX’’ or ‘‘Exchange’’) 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 permit participants submitting ‘‘cross with yield’’ orders to elect to yield to undisplayed interest in the Exchange’s central matching engine (‘‘Matching System’’). On July 6, 2007, the Exchange filed Amendment No. 1 to the proposed rule change. The proposed rule change, as modified by Amendment No. 1, was published for comment in the Federal Register on July 20, 2007.3 The Commission received no comments on the proposal. This order approves the proposed rule change, as amended. II. Description of the Proposal rmajette on PROD1PC64 with NOTICES The Exchange permits participants to submit ‘‘cross with yield’’ orders into its Matching System. A cross with yield order is an order that contains an instruction to execute a cross transaction at a specific price, together with an instruction to yield interest on the buy, sell or either side of the order, as specified in the order, to any order already displayed in the Matching System at the same or better price, to the extent necessary to allow the cross transaction to occur.4 The proposed rule change would amend the Exchange’s definition of a ‘‘cross with yield’’ order to permit a CHX participant to elect to yield to undisplayed interest in the Matching System, including undisplayed portions of reserve size orders and any undisplayed orders, in addition to bids and offers that are displayed in the Matching System. The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange, and in particular, with Section 6(b)(5) of the Act,5 which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest.6 The Commission notes that cross with yield orders are intended to provide an efficient means to execute a cross transaction at a particular price, yielding interest to orders in the Matching System that have priority. The Commission believes that the proposed rule change will expand the flexibility of this order type by providing a greater opportunity for orders being crossed to interact with all available market interest in the Exchange’s Matching System. Accordingly, the Commission finds that the proposed rule change is consistent with the Act. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,7 that the proposed rule change (SR–CHX–2006– 42), as amended, is approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.8 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–16838 Filed 8–24–07; 8:45 am] BILLING CODE 8010–01–P U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 56064 (July 13, 2007), 72 FR 39865. 4 See CHX Rules, Article 1, Rule 2(h) and Article 20, Rules 4(b)(7) and 8(e). 2 17 VerDate Aug<31>2005 15:56 Aug 24, 2007 Jkt 211001 [Release No. 34–56294; File No. SR– NASDAQ–2007–024] Self-Regulatory Organization; The NASDAQ Stock Market LLC; Order Approving Proposed Rule Change and Amendment No. 1 Thereto To Provide Additional Transparency To How Nasdaq Applies Its Public Interest Authority August 21, 2007. On March 16, 2007, The NASDAQ Stock Market LLC (‘‘Nasdaq’’) 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 clarify how Nasdaq applies its public interest authority. On June 26, 2007, Nasdaq filed Amendment No. 1 to the proposed rule change. The proposed rule change, as amended, was published for comment in the Federal Register on July 17, 2007.3 The Commission received no comments regarding the proposal. The Commission finds that the proposed rule change 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 finds that the proposed rule change is consistent with section 6(b)(5) of the Act,5 which requires that the rules of the an exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national securities system, and, in general, to protect investors and the public interest. Nasdaq IM–4300 states that Nasdaq may use its authority under Nasdaq Rule 4300 to deny initial or continued listing when an individual with a history of regulatory misconduct is associated with an issuer. Nasdaq proposes to amend Nasdaq IM–4300 to provide additional transparency to how Nasdaq may use this authority pursuant to Nasdaq Rule 4300. Specifically, Nasdaq proposes to provide additional guidance to issuers by clarifying existing factors in Nasdaq IM–4300 that it will consider in applying such 1 15 5 15 1 15 SECURITIES AND EXCHANGE COMMISSION U.S.C. 78f(b)(5). 6 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition and capital formation. See 15 U.S.C. 78c(f). 7 15 U.S.C. 78s(b)(2). 8 17 CFR 200.30–3(a)(12). PO 00000 Frm 00051 Fmt 4703 Sfmt 4703 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 56044 (July 11, 2007), 72 FR 39108. 4 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 5 15 U.S.C. 78f(b)(5). 2 17 E:\FR\FM\27AUN1.SGM 27AUN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 72, Number 165 (Monday, August 27, 2007)]
[Notices]
[Page 49032]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-16838]



[[Page 49032]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56291; File No. SR-CHX-2006-42]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Order Approving Proposed Rule Change, as Modified by Amendment No. 1 
Thereto, To Modify Provisions Relating to Cross With Yield Orders

 August 20, 2007.

I. Introduction

    On December 22, 2006, the Chicago Stock Exchange, Inc. (``CHX'' or 
``Exchange'') 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 permit participants submitting ``cross with 
yield'' orders to elect to yield to undisplayed interest in the 
Exchange's central matching engine (``Matching System''). On July 6, 
2007, the Exchange filed Amendment No. 1 to the proposed rule change. 
The proposed rule change, as modified by Amendment No. 1, was published 
for comment in the Federal Register on July 20, 2007.\3\ The Commission 
received no comments on the proposal. This order approves the proposed 
rule change, as amended.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 56064 (July 13, 
2007), 72 FR 39865.
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II. Description of the Proposal

    The Exchange permits participants to submit ``cross with yield'' 
orders into its Matching System. A cross with yield order is an order 
that contains an instruction to execute a cross transaction at a 
specific price, together with an instruction to yield interest on the 
buy, sell or either side of the order, as specified in the order, to 
any order already displayed in the Matching System at the same or 
better price, to the extent necessary to allow the cross transaction to 
occur.\4\ The proposed rule change would amend the Exchange's 
definition of a ``cross with yield'' order to permit a CHX participant 
to elect to yield to undisplayed interest in the Matching System, 
including undisplayed portions of reserve size orders and any 
undisplayed orders, in addition to bids and offers that are displayed 
in the Matching System.
---------------------------------------------------------------------------

    \4\ See CHX Rules, Article 1, Rule 2(h) and Article 20, Rules 
4(b)(7) and 8(e).
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III. Discussion

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange, and in 
particular, with Section 6(b)(5) of the Act,\5\ which requires, among 
other things, that the rules of a national securities exchange be 
designed to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system and, in general, to protect investors and the 
public interest.\6\
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b)(5).
    \6\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition and 
capital formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    The Commission notes that cross with yield orders are intended to 
provide an efficient means to execute a cross transaction at a 
particular price, yielding interest to orders in the Matching System 
that have priority. The Commission believes that the proposed rule 
change will expand the flexibility of this order type by providing a 
greater opportunity for orders being crossed to interact with all 
available market interest in the Exchange's Matching System. 
Accordingly, the Commission finds that the proposed rule change is 
consistent with the Act.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-CHX-2006-42), as amended, is 
approved.
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    \7\ 15 U.S.C. 78s(b)(2).
    \8\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-16838 Filed 8-24-07; 8:45 am]
BILLING CODE 8010-01-P

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