Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Approving a Proposed Rule Change To Allow the Exchange To Open at 8:30 a.m. (Chicago Time) Without Regard to the Opening on the Primary Market, 3499-3500 [E8-860]

Download as PDF Federal Register / Vol. 73, No. 13 / Friday, January 18, 2008 / Notices B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition 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 No written comments were solicited or received by the Exchange with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 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 Exchange consents, the Commission will: A. By order approve the 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: rwilkins on PROD1PC63 with NOTICES 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 Number SR–CHX–2007–24 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–2007–24. 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 VerDate Aug<31>2005 16:37 Jan 17, 2008 Jkt 214001 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 am and 3 pm. Copies of such 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 Number SR–CHX–2007–24 and should be submitted on or before February 8, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–831 Filed 1–17–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57140; File No. SR–CHX– 2007–23] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Approving a Proposed Rule Change To Allow the Exchange To Open at 8:30 a.m. (Chicago Time) Without Regard to the Opening on the Primary Market January 14, 2008. I. Introduction On October 2, 2007, 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 allow the Exchange to open at 8:30 a.m. (Chicago time) without regard to the opening on the primary market. To accommodate its implementation schedule for this proposal, the Exchange extended the time for Commission 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00052 Fmt 4703 Sfmt 4703 3499 action to January 14, 2008. The Federal Register published the proposed rule change for comment on November 1, 2007.3 The Commission received no comments on the proposal. II. Description Under existing rules, the Exchange generally opens for trading in a security once the primary market has done so.4 If the primary market announces that it will not open, or if the primary market has delayed its opening for reasons other than a regulatory halt, the rules permit two senior CHX officials to open the market.5 The Exchange has proposed to amend its rules to permit trading to begin at 8:30 a.m. (Chicago time), except for trading in specified exchange-traded funds, which would begin at 7:20 a.m. (Chicago time).6 In conjunction with this change to the opening time of the Exchange’s market, the Exchange also proposes two other changes to its rules. First, the Exchange would eliminate the opening cross order type. According to the Exchange, these cross orders, which are designed to execute at the primary market opening price, likely could no longer be effectively executed on the Exchange, once the proposed change is made to the time of the Exchange’s opening.7 In addition, the Exchange would add a new rule that prevents immediate or cancel (‘‘IOC’’) market orders from being accepted until either (i) the primary market in a security has opened trading in that security or (ii) two senior officers of the Exchange have determined that it is appropriate for the Exchange to accept IOC market orders.8 The 3 Securities Exchange Act Release No. 56698 (October 24, 2007), 72 FR 61919. 4 See CHX Rules, Article 20, Rule 1(b). 5 See CHX Rules, Article 20, Interpretation and Policy .01. 6 See Proposed CHX Rules, Article 20, Rule 1(b). The Exchange represents that Exchange-traded funds that begin trading at 7:20 a.m. would be announced, from time to time, by the Exchange in a customer service notification or other type of update. The only exchange-traded fund currently trading at 7:20 a.m. is the streetTRACKS  Gold Trust. Telephone conversation between Ellen Neely, President and General Counsel, CHX, Richard Holley III, Senior Special Counsel, Division of Market Regulation (‘‘Division’’), Commission, and Sonia Trocchio, Special Counsel, Division, Commission (October 18, 2007). 7 If the Exchange’s systems allow its participants to begin trading before the primary market opens trading in a particular security, an opening cross order (which must execute at the primary market opening price) might violate the protected quotations of other markets. To avoid this potential result, the Exchange believes that it is appropriate to eliminate this order type. 8 See Proposed CHX Rules, Article 1, Rule 2(n) and Article 20, Rule 4(b)(13). For purposes of this rule, another exchange would be considered to have opened for trading in a security when the first trade Continued E:\FR\FM\18JAN1.SGM 18JAN1 3500 Federal Register / Vol. 73, No. 13 / Friday, January 18, 2008 / Notices Exchange states that this change is designed to prevent market orders from being executed at prices that are far away from the primary market opening price, when that market ultimately opens. rwilkins on PROD1PC63 with NOTICES III. Discussion After careful review, 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.9 In particular, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act,10 which requires, among other things, that a national securities exchange’s rules be designed to promote just and equitable principles of trade, to remove impediments to and to perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. Previously, the Exchange opened for trading in a security once the primary market had opened in that security. The Exchange now proposes to permit trading to begin at 8:30 a.m. Chicago time (9:30 a.m. Eastern time), without regard to the whether the primary market opened in that security. The Commission believes that this proposed change is consistent with the Act and does not raise any new regulatory issues. Further, the proposal is consistent with the definition of ‘‘regular trading hours’’ under Rule 600(b)(64) of the Act.11 In addition, the Exchange has proposed a related change to eliminate the opening cross order type, which executes at the primary market opening price. As the Exchange will no longer link its opening to the primary market, the Commission believes that eliminating the cross order type is consistent with the Act as it eliminates the potential for those order types to violate the protected quotations of other markets. Finally, the Exchange’s proposal to prevent IOC market orders from being accepted until the primary market opens in that security or two in that security occurs in that market on or after 8:30 a.m. The Exchange has stated that two senior officers of the Exchange might decide that it is appropriate to allow IOC market orders to be accepted if, for example, the primary market has announced that it will open later than expected, but other markets are open to provide additional liquidity. Telephone conversation between Ellen Neely, President and General Counsel, CHX, Richard Holley III, Senior Special Counsel, Division, Commission, and Sonia Trocchio, Special Counsel, Division, Commission (October 18, 2007). 9 In approving this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 10 15 U.S.C. 78f(b)(5). 11 17 CFR 242.600(b)(64). VerDate Aug<31>2005 16:37 Jan 17, 2008 Jkt 214001 senior officers of the Exchange otherwise determine that it is appropriate to accept such orders is likewise consistent with the Act and the protection of investors and the public interest and should allow IOC market orders entered on CHX to be executed at prices that are closely related to the primary market opening price. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,12 that the proposed rule change (SR–CHX–2007– 23) is approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–860 Filed 1–17–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57133; File No. SR–FINRA– 2007–038] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delay Implementation of Certain Rule Changes Approved in SR–NASD–2005–146 January 11, 2008. 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 December 21, 2007, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) (f/k/a National Association of Securities Dealers, Inc. (‘‘NASD’’)) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II and III below, which Items have been substantially prepared by FINRA. FINRA filed the proposal as a ‘‘noncontroversial’’ proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders it effective upon filing with the Commission.5 The Commission is publishing this notice to 12 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 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 5 FINRA has requested that the Commission waive the 5 day pre-filing notice and 30-day operative delay required by Rule 19b–4(f)(6)(iii), 17 CFR 240.19b–4(f)(6)(iii). See discussion infra Section III. 13 17 PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 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 FINRA is proposing to delay the final implementation date of the rule changes approved in SR–NASD–2005–146,6 which is currently scheduled for January 14, 2008, until 60 days after Commission approval of SR–NASD– 2007–041. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FINRA 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 those statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose On February 26, 2007, the Commission approved SR–NASD–2005– 146, which, among other things, amended IM–2110–2 7 to expand the scope to apply to OTC equity securities and modify the minimum priceimprovement standards for securities trading in decimals. The amendments relating to OTC equity securities and the minimum price-improvement provisions are scheduled to become effective on January 14, 2008.8 On June 27, 2007, FINRA filed a proposed rule change (SR–NASD–2007– 041) to amend the minimum priceimprovement standards in IM–2110–2 that were approved as part of SR– 6 See Securities Exchange Act Release No. 55351 (February 26, 2007), 72 FR 9810 (March 5, 2007) (order approving SR–NASD–2005–146). See also NASD Notice to Members 07–19 (April 2007) (announcing the effective date of the rule changes in SR–NASD–2005–146). 7 Currently, IM–2110–2 generally prohibits a member from trading for its own account in an exchange-listed security at a price that is equal to or better than an unexecuted customer limit order in that security, unless the member immediately thereafter executes the customer limit order at the price at which it traded for its own account or better. 8 See Securities Exchange Act Release No. 56822 (November 20, 2007), 72 FR 67326 (November 28, 2007) (notice of filing and immediate effectiveness of SR–FINRA–2007–023). E:\FR\FM\18JAN1.SGM 18JAN1

Agencies

[Federal Register Volume 73, Number 13 (Friday, January 18, 2008)]
[Notices]
[Pages 3499-3500]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-860]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57140; File No. SR-CHX-2007-23]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Order Approving a Proposed Rule Change To Allow the Exchange To Open at 
8:30 a.m. (Chicago Time) Without Regard to the Opening on the Primary 
Market

January 14, 2008.

I. Introduction

    On October 2, 2007, 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 allow the Exchange to open at 8:30 a.m. 
(Chicago time) without regard to the opening on the primary market. To 
accommodate its implementation schedule for this proposal, the Exchange 
extended the time for Commission action to January 14, 2008. The 
Federal Register published the proposed rule change for comment on 
November 1, 2007.\3\ The Commission received no comments on the 
proposal.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 56698 (October 24, 
2007), 72 FR 61919.
---------------------------------------------------------------------------

II. Description

    Under existing rules, the Exchange generally opens for trading in a 
security once the primary market has done so.\4\ If the primary market 
announces that it will not open, or if the primary market has delayed 
its opening for reasons other than a regulatory halt, the rules permit 
two senior CHX officials to open the market.\5\ The Exchange has 
proposed to amend its rules to permit trading to begin at 8:30 a.m. 
(Chicago time), except for trading in specified exchange-traded funds, 
which would begin at 7:20 a.m. (Chicago time).\6\
---------------------------------------------------------------------------

    \4\ See CHX Rules, Article 20, Rule 1(b).
    \5\ See CHX Rules, Article 20, Interpretation and Policy .01.
    \6\ See Proposed CHX Rules, Article 20, Rule 1(b). The Exchange 
represents that Exchange-traded funds that begin trading at 7:20 
a.m. would be announced, from time to time, by the Exchange in a 
customer service notification or other type of update. The only 
exchange-traded fund currently trading at 7:20 a.m. is the 
streetTRACKS [reg] Gold Trust. Telephone conversation 
between Ellen Neely, President and General Counsel, CHX, Richard 
Holley III, Senior Special Counsel, Division of Market Regulation 
(``Division''), Commission, and Sonia Trocchio, Special Counsel, 
Division, Commission (October 18, 2007).
---------------------------------------------------------------------------

    In conjunction with this change to the opening time of the 
Exchange's market, the Exchange also proposes two other changes to its 
rules. First, the Exchange would eliminate the opening cross order 
type. According to the Exchange, these cross orders, which are designed 
to execute at the primary market opening price, likely could no longer 
be effectively executed on the Exchange, once the proposed change is 
made to the time of the Exchange's opening.\7\ In addition, the 
Exchange would add a new rule that prevents immediate or cancel 
(``IOC'') market orders from being accepted until either (i) the 
primary market in a security has opened trading in that security or 
(ii) two senior officers of the Exchange have determined that it is 
appropriate for the Exchange to accept IOC market orders.\8\ The

[[Page 3500]]

Exchange states that this change is designed to prevent market orders 
from being executed at prices that are far away from the primary market 
opening price, when that market ultimately opens.
---------------------------------------------------------------------------

    \7\ If the Exchange's systems allow its participants to begin 
trading before the primary market opens trading in a particular 
security, an opening cross order (which must execute at the primary 
market opening price) might violate the protected quotations of 
other markets. To avoid this potential result, the Exchange believes 
that it is appropriate to eliminate this order type.
    \8\ See Proposed CHX Rules, Article 1, Rule 2(n) and Article 20, 
Rule 4(b)(13). For purposes of this rule, another exchange would be 
considered to have opened for trading in a security when the first 
trade in that security occurs in that market on or after 8:30 a.m. 
The Exchange has stated that two senior officers of the Exchange 
might decide that it is appropriate to allow IOC market orders to be 
accepted if, for example, the primary market has announced that it 
will open later than expected, but other markets are open to provide 
additional liquidity. Telephone conversation between Ellen Neely, 
President and General Counsel, CHX, Richard Holley III, Senior 
Special Counsel, Division, Commission, and Sonia Trocchio, Special 
Counsel, Division, Commission (October 18, 2007).
---------------------------------------------------------------------------

III. Discussion

    After careful review, 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.\9\ 
In particular, the Commission finds that the proposal is consistent 
with Section 6(b)(5) of the Act,\10\ which requires, among other 
things, that a national securities exchange's rules be designed to 
promote just and equitable principles of trade, to remove impediments 
to and to perfect the mechanism of a free and open market and a 
national market system, and, in general, to protect investors and the 
public interest. Previously, the Exchange opened for trading in a 
security once the primary market had opened in that security. The 
Exchange now proposes to permit trading to begin at 8:30 a.m. Chicago 
time (9:30 a.m. Eastern time), without regard to the whether the 
primary market opened in that security. The Commission believes that 
this proposed change is consistent with the Act and does not raise any 
new regulatory issues. Further, the proposal is consistent with the 
definition of ``regular trading hours'' under Rule 600(b)(64) of the 
Act.\11\ In addition, the Exchange has proposed a related change to 
eliminate the opening cross order type, which executes at the primary 
market opening price. As the Exchange will no longer link its opening 
to the primary market, the Commission believes that eliminating the 
cross order type is consistent with the Act as it eliminates the 
potential for those order types to violate the protected quotations of 
other markets. Finally, the Exchange's proposal to prevent IOC market 
orders from being accepted until the primary market opens in that 
security or two senior officers of the Exchange otherwise determine 
that it is appropriate to accept such orders is likewise consistent 
with the Act and the protection of investors and the public interest 
and should allow IOC market orders entered on CHX to be executed at 
prices that are closely related to the primary market opening price.
---------------------------------------------------------------------------

    \9\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ 17 CFR 242.600(b)(64).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\12\ that the proposed rule change (SR-CHX-2007-23) is approved.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-860 Filed 1-17-08; 8:45 am]
BILLING CODE 8011-01-P