Self-Regulatory Organizations; The Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding the Elimination of Provisions Relating to Rule 10a-1, 73926-73927 [E7-25189]
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Federal Register / Vol. 72, No. 248 / Friday, December 28, 2007 / Notices
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,24 that the
proposed rule change (SR–CBOE–2007–
140) be, and it hereby is approved on an
accelerated basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.25
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–25199 Filed 12–27–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57007; File No. SR–CHX–
2007–17]
Self-Regulatory Organizations; The
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change Regarding
the Elimination of Provisions Relating
to Rule 10a–1
December 20, 2007.
mstockstill on PROD1PC66 with NOTICES
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 2 thereunder,
notice is hereby given that on August
31, 2007, the Chicago Stock Exchange,
Inc. (‘‘CHX’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’), and on
October 22, 2007 amended, the
proposed rule change as described in
Items I and II below, which Items have
been substantially prepared by CHX.
CHX has designated the proposed rule
change as constituting a ‘‘noncontroversial’’ rule change under
paragraph (f)(6) of Rule 19b–4 under the
Act.3 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
Through this filing, the Exchange
proposes to amend its rules to eliminate
all provisions that would impose a
‘‘price test’’ in connection with the short
sale of securities or require that CHX’s
Matching System operate in a manner
consistent with such a price test.
The text of this proposed rule change
is available at the Exchange, on the
Exchange’s Web site at https://
www.chx.com/rules/
24 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
25 17
VerDate Aug<31>2005
22:27 Dec 27, 2007
Jkt 214001
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 regarding 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
On June 28, 2007, the Commission
approved final rules eliminating the
price test of Rule 10a–1 4 and amending
Regulation SHO.5 The Commission’s
action prohibits any self-regulatory
organization from having a price test
and removes the ‘‘short exempt’’
marking requirement of Rule 200(g). The
compliance date for these changes
(‘‘Compliance Date’’) was July 6, 2007.
The Exchange’s rules currently
include several provisions that should
be eliminated to ensure that the
Exchange’s rules do not improperly
impose a price test or otherwise require
handling of short sale orders in a
manner inconsistent with the
Commission’s latest action. Among
others, these provisions include a
requirement that participants effect
short sales in compliance with Rule
10a–1; a description of the Matching
System’s repricing of sell short orders,
when necessary to comply with Rule
10a–1; and a requirement that
participants mark orders as ‘‘short
exempt.’’ 6 Through this filing, the
Exchange would eliminate these
provisions.
The Exchange filed Amendment No. 1
to the proposal to confirm that it is not
eliminating a section of its ‘‘Short
Sales’’ rule that imposes a requirement
4 17
CFR 240.10a–1.
Securities Exchange Act Release No. 34–
55970 (June 28, 2007).
6 See Article 9, Rule 23(a); Article 20, Rule 8(e)(5);
and Article 11, Rules 3 and 4, respectively. Other
provisions that must be eliminated are ones that
relate to the ‘‘short exempt’’ order type and that
refer to Rule 10a–1. See Article 1, Rule 2(hh) and
Article 20, Rule 4(b)(23) (the ‘‘short exempt’’ order
type); and Article 1, Rule 1(w) (referring to Rule
10a–1).
5 See
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Fmt 4703
Sfmt 4703
that a market maker notify the Exchange
if it has a position in a security that is
greater than or equal to 5% of the
outstanding public float of that security,
as determined by the company’s most
recent report on Form 10–K.7 The
Exchange’s original proposal had sought
to remove this provision from its rules.8
2. Statutory Basis
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).9 The
Exchange believes that the proposed
change is consistent with Section 6(b)(5)
of the Act,10 because it 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 modifying CHX’s rules to
comply with the Commission’s
amendments to Rule 10a–1 and
Regulation SHO.
B. Self-Regulatory Organization’s
Statement of Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments Regarding the
Proposed Rule Change Received From
Members, Participants or Others
No written comments were solicited
or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not:
(i) Significantly affect the protection
of investors or the public interest;
(ii) Impose any significant burden on
competition; and
(iii) Become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
7 See
Article 9, Rule 23(b).
provision is one that apparently was
inadvertently carried over from the Exchange’s old
trading model and is not necessary in the
Exchange’s new trading model. A separate
provision of the Exchange’s new trading model
rules specifically requires that market makers keep
data about their positions and report that
information to the Exchange upon request. See
Article 16, Rule 10. The Exchange will file a
separate proposal to eliminate this provision, if it
continues to believe that it is appropriate to do so.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
8 This
E:\FR\FM\28DEN1.SGM
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Federal Register / Vol. 72, No. 248 / Friday, December 28, 2007 / Notices
may designate, it has become effective
upon filing pursuant to Section
19(b)(3)(A) of the Act11 and Rule 19b–
4(f)(6) thereunder.12 At any time within
60 days of the filing of the 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.
The Exchange has requested that the
Commission waive the 5-day pre-filing
notice requirement and the 30-day
operative delay of the proposal. The
Commission believes that such waivers
are consistent with the protection of
investors and the public interest
because the proposed rule change
conforms CHX’s rules to currently
effective Commission Rules.13 For this
reason, the Commission designates the
proposal to be operative upon filing
with the Commission.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposal is
consistent with the Act. Comments may
be submitted by any of the following
methods:
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, 100 F Street, NE., Washington,
DC 20549 on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of such filing will also 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 No.
SR–CHX–2007–17 and should be
submitted on or before January 18, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–25189 Filed 12–27–07; 8:45 am]
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
No. SR–CHX–2007–17 on the subject
line.
mstockstill on PROD1PC66 with NOTICES
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–2007–17. 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
11 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
13 For purposes only of waiving the 30 day preoperative period, the Commission has considered
the impact of the proposed rule change on
efficiency, competition and capital formation. 15
U.S.C. 78c(f).
12 17
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BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56972; File No. SR–NASD–
2007–035]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc. (n/k/a/ Financial Industry
Regulatory Authority, Inc.); Order
Granting Approval of a Proposed Rule
Change Related to Mandated Use of an
Automated Liability Notification
System
December 14, 2007.
I. Introduction
On May 25, 2007, the National
Association of Securities Dealers, Inc.
(‘‘NASD’’)1 filed with the Securities and
Exchange Commission (‘‘Commission’’)
a proposed rule change pursuant to
Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’).2 Notice
14 17
CFR 200.30–3(a)(12).
July 26, 2007, the Commission approved a
proposed rule change filed by NASD to amend
NASD’s Certificate of Incorporation to reflect its
name change to Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) in connection with the
consolidation of the member firm regulatory
functions of NASD and NYSE Regulation, Inc.
Exchange Act Release No. 56146 (July 26, 2007); 72
FR 42190 (Aug. 1, 2007).
2 15 U.S.C. 78s(b)(1).
1 On
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Fmt 4703
Sfmt 4703
73927
of the proposal was published in the
Federal Register on October 17, 2007.3
For the reasons discussed below, the
Commission is granting approval of the
proposed rule change.
II. Description
NASD Rule 11810(i) sets, forth the
procedures that must be followed when
a party is owed securities that have
become the subject of a voluntary
corporate action, such as a tender or
exchange offer is seeking delivery of
those securities. Under Rule 11810(i),
the owed party delivers a liability notice
to the owing or failing party. The
liability notice sets a cut off date for the
delivery of the securities by the owing
party and provides notice to the owing
party that it will be held liable for any
damages caused by its failure to deliver
the securities in time for the owed party
to participate in the voluntary corporate
action.
If the owing party delivers the
securities in response to the liability
notice, it has met its delivery obligation.
If the owing party fails to deliver the
securities in sufficient time for the owed
party to participate in the voluntary
corporate action, it will be liable for any
damages that may accrue thereby (i.e.,
the owing party must deliver proceeds
equivalent to the proceeds that the owed
party would have received if it had been
able to participate in the offer). The
owed party has the responsibility to
communicate its intentions to the owing
party and to prove, if necessary, that the
owing party received the liability notice.
Prior to this proposed rule change,
Rule 11810(i) required broker-dealers to
send liability notices using ‘‘electronic
media having immediate receipt
capabilities.’’ Although there was no
one acceptable means for sending and
tracking liability notices, NASD
members advised the NASD that it was
industry practice to send liability
notices by fax. However, sending
liability notices by fax is a manual,
paper-intensive process that is subject to
error. The financial risk to an owing
firm that misses or incorrectly processes
a liability notice relating to a voluntary
corporate action can be considerable.
In response to industry need for a
reliable and uniform method of
transmitting liability notices, The
Depository Trust Company (‘‘DTC’’)
developed the SMART/Track for
Corporate Action Liability Notification
Service (‘‘SMART/Track’’). SMART/
Track is a web-based system for the
communication of corporate action
3 Securities Exchange Act Release No. 56639
(October 11, 2007), 72 FR 58918 (October 17, 2007)
[File No. SR–NASD–2007–035].
E:\FR\FM\28DEN1.SGM
28DEN1
]]>Agencies
[Federal Register Volume 72, Number 248 (Friday, December 28, 2007)]
[Notices]
[Pages 73926-73927]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-25189]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57007; File No. SR-CHX-2007-17]
Self-Regulatory Organizations; The Chicago Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Regarding the Elimination of Provisions Relating to Rule 10a-1
December 20, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on August 31, 2007, the Chicago Stock Exchange, Inc. (``CHX'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), and on October 22, 2007 amended, the proposed rule
change as described in Items I and II below, which Items have been
substantially prepared by CHX. CHX has designated the proposed rule
change as constituting a ``non-controversial'' rule change under
paragraph (f)(6) of Rule 19b-4 under the Act.\3\ The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Through this filing, the Exchange proposes to amend its rules to
eliminate all provisions that would impose a ``price test'' in
connection with the short sale of securities or require that CHX's
Matching System operate in a manner consistent with such a price test.
The text of this proposed rule change is available at the Exchange,
on the Exchange's Web site at https://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 regarding 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
On June 28, 2007, the Commission approved final rules eliminating
the price test of Rule 10a-1 \4\ and amending Regulation SHO.\5\ The
Commission's action prohibits any self-regulatory organization from
having a price test and removes the ``short exempt'' marking
requirement of Rule 200(g). The compliance date for these changes
(``Compliance Date'') was July 6, 2007.
---------------------------------------------------------------------------
\4\ 17 CFR 240.10a-1.
\5\ See Securities Exchange Act Release No. 34-55970 (June 28,
2007).
---------------------------------------------------------------------------
The Exchange's rules currently include several provisions that
should be eliminated to ensure that the Exchange's rules do not
improperly impose a price test or otherwise require handling of short
sale orders in a manner inconsistent with the Commission's latest
action. Among others, these provisions include a requirement that
participants effect short sales in compliance with Rule 10a-1; a
description of the Matching System's repricing of sell short orders,
when necessary to comply with Rule 10a-1; and a requirement that
participants mark orders as ``short exempt.'' \6\ Through this filing,
the Exchange would eliminate these provisions.
---------------------------------------------------------------------------
\6\ See Article 9, Rule 23(a); Article 20, Rule 8(e)(5); and
Article 11, Rules 3 and 4, respectively. Other provisions that must
be eliminated are ones that relate to the ``short exempt'' order
type and that refer to Rule 10a-1. See Article 1, Rule 2(hh) and
Article 20, Rule 4(b)(23) (the ``short exempt'' order type); and
Article 1, Rule 1(w) (referring to Rule 10a-1).
---------------------------------------------------------------------------
The Exchange filed Amendment No. 1 to the proposal to confirm that
it is not eliminating a section of its ``Short Sales'' rule that
imposes a requirement that a market maker notify the Exchange if it has
a position in a security that is greater than or equal to 5% of the
outstanding public float of that security, as determined by the
company's most recent report on Form 10-K.\7\ The Exchange's original
proposal had sought to remove this provision from its rules.\8\
---------------------------------------------------------------------------
\7\ See Article 9, Rule 23(b).
\8\ This provision is one that apparently was inadvertently
carried over from the Exchange's old trading model and is not
necessary in the Exchange's new trading model. A separate provision
of the Exchange's new trading model rules specifically requires that
market makers keep data about their positions and report that
information to the Exchange upon request. See Article 16, Rule 10.
The Exchange will file a separate proposal to eliminate this
provision, if it continues to believe that it is appropriate to do
so.
---------------------------------------------------------------------------
2. Statutory Basis
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).\9\ The Exchange believes that the proposed change is
consistent with Section 6(b)(5) of the Act,\10\ because it 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 modifying CHX's rules to comply with the Commission's
amendments to Rule 10a-1 and Regulation SHO.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement of Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments Regarding the
Proposed Rule Change Received From Members, Participants or Others
No written comments were solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public
interest;
(ii) Impose any significant burden on competition; and
(iii) Become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission
[[Page 73927]]
may designate, it has become effective upon filing pursuant to Section
19(b)(3)(A) of the Act\11\ and Rule 19b-4(f)(6) thereunder.\12\ At any
time within 60 days of the filing of the 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.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
The Exchange has requested that the Commission waive the 5-day pre-
filing notice requirement and the 30-day operative delay of the
proposal. The Commission believes that such waivers are consistent with
the protection of investors and the public interest because the
proposed rule change conforms CHX's rules to currently effective
Commission Rules.\13\ For this reason, the Commission designates the
proposal to be operative upon filing with the Commission.
---------------------------------------------------------------------------
\13\ For purposes only of waiving the 30 day pre-operative
period, the Commission has considered the impact of the proposed
rule change on efficiency, competition and capital formation. 15
U.S.C. 78c(f).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposal 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 No. SR-CHX-2007-17 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 Number SR-CHX-2007-17. 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, 100 F Street, NE., Washington, DC
20549 on official business days between the hours of 10 a.m. and 3 p.m.
Copies of such filing will also 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 No. SR-CHX-2007-17 and should be submitted on or
before January 18, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-25189 Filed 12-27-07; 8:45 am]
BILLING CODE 8011-01-P
