Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Make Administrative Changes to its Routing Rules, 13940-13941 [E8-5096]

Download as PDF 13940 Federal Register / Vol. 73, No. 51 / Friday, March 14, 2008 / Notices applicable to Market Makers. As previously stated, Make or Take is applicable to all three account types.5 This proposed rule change will specifically include this reference to Make or Take within the Public Customer and Broker Dealer portions of the BOX Fee Schedule. Again, this proposal will not modify the fees that are currently charged for the trading of options contracts on BOX, nor will it change to whom the fees are charged. 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act,6 in general, and Section 6(b)(5) of the Act,7 in particular, in that it clarifies existing rule text and it is designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, 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. 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 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 The Exchange has neither solicited nor received comments on the proposed rule change. rwilkins on PROD1PC63 with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(i) of the Act 8 and subparagraph (f)(1) of Rule 19b–4 thereunder.9 The proposed rule change is a stated policy, practice or interpretation with respect to the meaning, administration or enforcement of an existing rule of the Exchange. At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is 5 See Securities Exchange Act Release No. 56371 (September 7, 2007), 72 FR 52401 (September 13, 2007). 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). 8 15 U.S.C. 78s(b)(3)(A)(i). 9 17 CFR 240.19b–4(f)(1). VerDate Aug<31>2005 19:17 Mar 13, 2008 Jkt 214001 necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 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 rulecomments@sec.gov. Please include File Number SR–BSE–2008–13 on the subject line. Paper Comments For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–5098 Filed 3–13–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57454; File No. SR–CHX– 2007–18] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Make Administrative Changes to its Routing Rules March 7, 2008 I. Introduction On July 6, 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 All submissions should refer to File change to make administrative changes Number SR–BSE–2008–13. This file to its routing rules. On January 22, 2008, number should be included on the subject line if e-mail is used. To help the the Exchange filed Amendment No. 1 to the proposed rule change. The proposed Commission process and review your rule change, as modified by Amendment comments more efficiently, please use only one method. The Commission will No. 1, was published for comment in post all comments on the Commission’s the Federal Register on February 1, 2008.3 The Commission received no Internet Web site (https://www.sec.gov/ comments on the proposal. This order rules/sro.shtml). Copies of the approves the proposed rule change, as submission, all subsequent amended. amendments, all written statements with respect to the proposed rule II. Description of the Proposal change that are filed with the The Exchange’s rules provide that the Commission, and all written Exchange’s Matching System will not communications relating to the execute an order if its execution would proposed rule change between the Commission and any person, other than be improper under Rule 611 of Regulation NMS under the Act those that may be withheld from the (‘‘improper trade-through’’).4 In the case public in accordance with the of an execution that would cause an provisions of 5 U.S.C. 552, will be improper trade-through, the Exchange’s available for inspection and copying in rules provide that, if a participant the Commission’s Public Reference submitted a cross with satisfy or an Room, 100 F Street, NE., Washington, outbound ISO, the Matching System DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. will execute the order and simultaneously route orders necessary Copies of such filing also will be to satisfy the bids or offers of other available for inspection and copying at markets.5 For all other orders, the the principal office of BSE. All comments received will be posted 10 17 CFR 200.30–3(a)(12). without change; the Commission does 1 15 U.S.C. 78s(b)(1). not edit personal identifying 2 17 CFR 240.19b-4. information from submissions. You 3 See Securities Exchange Act Release No. 57203 (January 25, 2008), 73 FR 6232. should submit only information that 4 See CHX Article 20, Rule 5; and Rule 611 of you wish to make available publicly. All Regulation NMS, 17 CFR 242.611. submissions should refer to File 5 The Exchange’s systems determine when, how, Number SR–BSE–2008–13 and should and where these orders should be routed. See CHX be submitted on or before April 4, 2008. Article 20, Rule 5, Interpretation and Policy .03(a). • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. PO 00000 Frm 00114 Fmt 4703 Sfmt 4703 E:\FR\FM\14MRN1.SGM 14MRN1 Federal Register / Vol. 73, No. 51 / Friday, March 14, 2008 / Notices Exchange will either cancel the order back to the participant that submitted it or will route the order to the destination of the participant’s choice, all at the direction of the participant.6 The Exchange’s current routing rules also provide that the Exchange will provide routing services pursuant to the terms of three separate agreements, to the extent that they are applicable to a specific routing decision: (1) An agreement between the Exchange and each participant on whose behalf orders will be routed; (2) an agreement between each participant and a specified third-party broker-dealer that will use its routing connectivity to other markets and serve as a ‘‘give-up’’ in those markets; and (3) an agreement between the Exchange and the specified third-party broker-dealer pursuant to which the third-party broker-dealer agrees to provide routing connectivity to other markets and serve as a ‘‘give-up’’ for the Exchange’s participants in other markets.7 The Exchange proposes to make three changes to its routing rules. First, the Exchange proposes to provide that, if requested by a participant and its routing destination, the Exchange will flip any executions into the participant’s account and report that second leg of the away-market transaction to clearing. The Exchange states that this service would provide the order-sending participant the option of consolidating its clearing reports in specific locations. Second, the Exchange proposes to amend the requirement relating to the agreements that are necessary for the Exchange to provide routing services. For cross with satisfy and outbound ISOs, the Exchange will continue to provide routing services pursuant to the terms of three separate agreements to the extent that they are applicable to a specific routing decision.8 For other orders, the Exchange proposes to allow the CHX and/or a third-party brokerdealer providing connectivity to other markets to determine which agreements are needed to implement the routing functionality. The Exchange states that it believes that most routing destinations will require that ordersenders sign additional agreements for any services that the destinations might provide, but the Exchange would like to provide flexibility for destinations to make choices appropriate to their business models. Third, the Exchange proposes to provide that, with respect to a cross with satisfy or an outbound ISO, the agreement between a participant and the third-party broker-dealer routing its order by access agreement with the Exchange need not provide that the third-party broker-dealer will serve as a give-up if this is not necessary—i.e., where the participant has a good giveup in the market to which the order is routed and prefers that its own give-up be used.9 III. Discussion After careful review, the Commission finds that the proposed rule change, as amended, 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,10 which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, 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.11 The Commission believes that the proposed changes to the Exchange’s routing rules should provide the Exchange, its participants, and thirdparty routers with more flexibility in establishing routing arrangements. Accordingly, the Commission finds that the proposed rule change, as amended, is consistent with the Act. IV. Conclusion rwilkins on PROD1PC63 with NOTICES 6 The participant is responsible for ensuring that it has a relationship with its chosen destination to permit the requested access. The Exchange is not involved in the execution of the order and states that any execution of the order is the responsibility of the destination to which the order was sent. The Exchange, however, reports any execution or cancellation of the order by the other destination to the participant that submitted the order and notifies the other venue of any cancellations or changes to the order submitted by the order-sending participant. See Article 20, Rule 5, Interpretation and Policy .03(b). 7 See Article 20, Rule 5, Proposed Interpretation and Policy .03(c)(1). 8 See Article 20, Rule 5, Proposed Interpretation and Policy .03(c). VerDate Aug<31>2005 19:17 Mar 13, 2008 Jkt 214001 It is therefore ordered, pursuant to Section 19(b)(2) of the Act,12 that the proposed rule change (SR–CHX–2007– 18), as modified by Amendment No. 1, be, and hereby is, approved. 9 See Article 20, Rule 5, Proposed Interpretation and Policy .03(c). 10 15 U.S.C. 78f(b)(5). 11 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). 12 15 U.S.C. 78s(b)(2). PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 13941 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–5096 Filed 3–13–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57455; File No. SR–NYSE– 2008–03] Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving a Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Rescind NYSE Rule 97 (Limitation on Member’s Trading Because of Block Positioning) March 7, 2008 I. Introduction On January 11, 2008, the New York Stock Exchange LLC (‘‘NYSE’’ 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 rescind NYSE Rule 97 (Limitation on Member’s Trading Because of Block Positioning). The proposed rule change was published for comment in the Federal Register on February 6, 2008.3 On February 20, 2008, NYSE filed Amendment No. 1 to the proposed rule change.4 The Commission received one comment on the proposed rule change.5 This order approves the proposed rule change, as modified. II. Description of the Proposed Rule Change NYSE Rule 97 governs block facilitation transactions by NYSE member organizations on behalf of customers. The rule states that if, as a result of facilitating one or more customer sell orders in a stock during the trading day, a member organization ends up holding a long position in the stock in a proprietary account, then 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 57236 (January 30, 2008), 73 FR 7022. 4 In Amendment No. 1, the Exchange made conforming amendments to NYSE Rules 123C and 800 to remove references to NYSE Rule 97, and corrected typographical errors in NYSE Rule 800. Because Amendment No. 1 is technical in nature, it is not subject to notice and comment. 5 See letter from Ann L. Vlcek, Securities Industry and Financial Markets Association (‘‘SIFMA’’), dated February 27, 2008 (‘‘SIFMA Letter’’). 1 15 E:\FR\FM\14MRN1.SGM 14MRN1

Agencies

[Federal Register Volume 73, Number 51 (Friday, March 14, 2008)]
[Notices]
[Pages 13940-13941]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-5096]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57454; File No. SR-CHX-2007-18]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Order Approving Proposed Rule Change, as Modified by Amendment No. 1 
Thereto, To Make Administrative Changes to its Routing Rules

 March 7, 2008

I. Introduction

    On July 6, 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 make administrative changes to its routing 
rules. On January 22, 2008, 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 
February 1, 2008.\3\ The Commission received no comments on the 
proposal. This order approves the proposed rule change, as amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 57203 (January 25, 
2008), 73 FR 6232.
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II. Description of the Proposal

    The Exchange's rules provide that the Exchange's Matching System 
will not execute an order if its execution would be improper under Rule 
611 of Regulation NMS under the Act (``improper trade-through'').\4\ In 
the case of an execution that would cause an improper trade-through, 
the Exchange's rules provide that, if a participant submitted a cross 
with satisfy or an outbound ISO, the Matching System will execute the 
order and simultaneously route orders necessary to satisfy the bids or 
offers of other markets.\5\ For all other orders, the

[[Page 13941]]

Exchange will either cancel the order back to the participant that 
submitted it or will route the order to the destination of the 
participant's choice, all at the direction of the participant.\6\
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    \4\ See CHX Article 20, Rule 5; and Rule 611 of Regulation NMS, 
17 CFR 242.611.
    \5\ The Exchange's systems determine when, how, and where these 
orders should be routed. See CHX Article 20, Rule 5, Interpretation 
and Policy .03(a).
    \6\ The participant is responsible for ensuring that it has a 
relationship with its chosen destination to permit the requested 
access. The Exchange is not involved in the execution of the order 
and states that any execution of the order is the responsibility of 
the destination to which the order was sent. The Exchange, however, 
reports any execution or cancellation of the order by the other 
destination to the participant that submitted the order and notifies 
the other venue of any cancellations or changes to the order 
submitted by the order-sending participant. See Article 20, Rule 5, 
Interpretation and Policy .03(b).
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    The Exchange's current routing rules also provide that the Exchange 
will provide routing services pursuant to the terms of three separate 
agreements, to the extent that they are applicable to a specific 
routing decision: (1) An agreement between the Exchange and each 
participant on whose behalf orders will be routed; (2) an agreement 
between each participant and a specified third-party broker-dealer that 
will use its routing connectivity to other markets and serve as a 
``give-up'' in those markets; and (3) an agreement between the Exchange 
and the specified third-party broker-dealer pursuant to which the 
third-party broker-dealer agrees to provide routing connectivity to 
other markets and serve as a ``give-up'' for the Exchange's 
participants in other markets.\7\
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    \7\ See Article 20, Rule 5, Proposed Interpretation and Policy 
.03(c)(1).
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    The Exchange proposes to make three changes to its routing rules. 
First, the Exchange proposes to provide that, if requested by a 
participant and its routing destination, the Exchange will flip any 
executions into the participant's account and report that second leg of 
the away-market transaction to clearing. The Exchange states that this 
service would provide the order-sending participant the option of 
consolidating its clearing reports in specific locations.
    Second, the Exchange proposes to amend the requirement relating to 
the agreements that are necessary for the Exchange to provide routing 
services. For cross with satisfy and outbound ISOs, the Exchange will 
continue to provide routing services pursuant to the terms of three 
separate agreements to the extent that they are applicable to a 
specific routing decision.\8\ For other orders, the Exchange proposes 
to allow the CHX and/or a third-party broker-dealer providing 
connectivity to other markets to determine which agreements are needed 
to implement the routing functionality. The Exchange states that it 
believes that most routing destinations will require that order-senders 
sign additional agreements for any services that the destinations might 
provide, but the Exchange would like to provide flexibility for 
destinations to make choices appropriate to their business models.
---------------------------------------------------------------------------

    \8\ See Article 20, Rule 5, Proposed Interpretation and Policy 
.03(c).
---------------------------------------------------------------------------

    Third, the Exchange proposes to provide that, with respect to a 
cross with satisfy or an outbound ISO, the agreement between a 
participant and the third-party broker-dealer routing its order by 
access agreement with the Exchange need not provide that the third-
party broker-dealer will serve as a give-up if this is not necessary--
i.e., where the participant has a good give-up in the market to which 
the order is routed and prefers that its own give-up be used.\9\
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    \9\ See Article 20, Rule 5, Proposed Interpretation and Policy 
.03(c).
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III. Discussion

    After careful review, the Commission finds that the proposed rule 
change, as amended, 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,\10\ which requires, among other things, that the rules of a 
national securities exchange be designed to prevent fraudulent and 
manipulative acts and practices, 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.\11\
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    \10\ 15 U.S.C. 78f(b)(5).
    \11\ 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).
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    The Commission believes that the proposed changes to the Exchange's 
routing rules should provide the Exchange, its participants, and third-
party routers with more flexibility in establishing routing 
arrangements. Accordingly, the Commission finds that the proposed rule 
change, as amended, is consistent with the Act.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\12\ that the proposed rule change (SR-CHX-2007-18), as modified by 
Amendment No. 1, be, and hereby is, approved.
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    \12\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-5096 Filed 3-13-08; 8:45 am]
BILLING CODE 8011-01-P