Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change To Amend its Bylaws Relating to the Definition of a Public Director, 14286-14287 [E8-5220]
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Federal Register / Vol. 73, No. 52 / Monday, March 17, 2008 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57464; File No. SR–CHX–
2008–02]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing of Proposed Rule Change To
Amend its Bylaws Relating to the
Definition of a Public Director
March 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 February
26, 2008, the Chicago Stock Exchange,
Inc. (‘‘CHX’’ or ‘‘Exchange’’) 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 the
CHX. 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
The CHX proposes to amend the
definition of ‘‘public director,’’ as set
forth in the CHX’s bylaws. The text of
this proposed rule change is available at
the CHX, 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 on 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.
pwalker on PROD1PC71 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
VerDate Aug<31>2005
16:19 Mar 14, 2008
Jkt 214001
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).6 The proposed rule change
is consistent with Section 6(b)(5) of the
Act 7 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 the definition of a
public director in a manner that
continues to ensure the independence of
a public director, while allowing a
public director to have business
relationships with non-U.S. entities.
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.
1. Purpose
The Exchange’s bylaws currently
define a public director as, among other
things, a director (i) who is not a broker
or dealer or an officer or employee of a
broker or dealer; and (ii) who does not
1 15
have any other material business
relationship with a broker or dealer.3
Through this proposal, the Exchange
seeks to amend the definition of ‘‘public
director’’ to clarify its scope.4
Specifically, the Exchange proposes to
amend the definition of a public
director to only exclude persons who
have the specified relationships with a
broker or dealer that is registered under
the Act. The Exchange believes that this
change is appropriate because it would
ensure that a public director is not
affiliated with a U.S. broker or dealer
(which must register under the Act),
while allowing a public director to have
a business relationship with a non-U.S.
broker or dealer (which typically is not
required to register under the Act). The
Exchange believes that this change is
consistent with the director
independence qualifications used by at
least one other self-regulatory
organization.5
3 See Article II, Section 2(b) of the Exchange’s
Bylaws.
4 In this proposal, the Exchange also seeks to
insert the word ‘‘a’’ in the rule text to correct an
apparent typographical error.
5 See Section 1(c) of the Independence
Qualifications section of the Independence Policy
of the NYSE Euronext Board of Directors.
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
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Fmt 4703
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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 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 rulecomments@sec.gov. Please include File
Number SR–CHX–2008–02 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–2008–02. 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.
E:\FR\FM\17MRN1.SGM
17MRN1
Federal Register / Vol. 73, No. 52 / Monday, March 17, 2008 / Notices
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
Number SR–CHX–2008–02 and should
be submitted on or before April 7, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–5220 Filed 3–14–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57458; File No. SR–CHX–
2007–24]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing of Amendment No. 2 and
Order Granting Accelerated Approval
of a Proposed Rule Change, as
Modified by Amendment Nos. 1 and 2
Thereto, Relating to the Handling of
Clearly Erroneous Transactions
pwalker on PROD1PC71 with NOTICES
March 10, 2008.
I. Introduction
On October 4, 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 amend Exchange Rules 10 and
11 of Article 20 regarding the handling
of ‘‘clearly erroneous’’ and other
transactions and to make corresponding
changes to Article 2, Rule 5. On January
7, 2008, the Exchange submitted
Amendment No. 1 to the proposed rule
change. The proposed rule change, as
amended by Amendment No. 1, was
published for comment in the Federal
Register on January 18, 2008.3 The
Commission received no comment
letters on the proposal, as amended by
Amendment No. 1. On February 29,
2008, the Exchange submitted
Amendment No. 2 to the proposed rule
change. This order provides notice of
Amendment No. 2 and approves the
8 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Securities Exchange Act Release No. 57137
(January 14, 2008), 73 FR 3497.
1 15
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16:19 Mar 14, 2008
Jkt 214001
proposed rule change, as modified by
Amendments No. 1 and 2, on an
accelerated basis.
II. Discussion
Currently, CHX Article 20, Rules 10
and 11 allow the Exchange to cancel a
trade, or modify the terms of a trade,
when its terms are determined to be
‘‘clearly erroneous’’ or when other
circumstances (including a CHX
systems problem) require that that
action be taken for the maintenance of
a fair and orderly market or the
protection of investors and the public
interest.4 As a result of the experience
gained through the operation of these
rules, the Exchange now proposes
several changes to the rules’ provisions.
First, the Exchange seeks to amend
Article 20, Rule 10 by extending, from
15 to 30 minutes, the time for filing an
initial written request for review of a
potentially ‘‘clearly erroneous’’ trade.
As part of this change, the Exchange
would eliminate the requirement that a
participant notify the Exchange by
telephone of its intent to seek review
but would retain the requirement that
the request must be in writing.
Second, the Exchange would establish
in Article 20, Rule 10 specific
thresholds for determining whether a
transaction is eligible for review under
this rule. Under this proposal, a trade
would be found to be eligible for review
if: (i) For a trade where the price per
share is less than $1.00, the execution
price is 20% or more away from the
midpoint of the national best bid and
offer (‘‘NBBO’’); or (ii) for a trade where
the price per share is equal to or greater
than $1.00, the execution price is 10%
or more away from the midpoint of the
NBBO.
Third, the Exchange proposes to
amend Article 20, Rule 10 to eliminate
one of the two levels of appeal that can
be taken from an initial Exchange
determination that the terms of a trade
should be modified or that the trade
should be cancelled. Under the current
Article 20, Rule 10, the Exchange’s
initial decision may be appealed to a
subcommittee of the Committee on
Exchange Procedure and the
subcommittee’s decision may be
appealed, in turn, to the full Committee
on Exchange Procedure.5 The Exchange
4 See CHX Rules, Article 20, Rule 10 (‘‘Handling
of Clearly Erroneous Transactions’’) and Rule 11
(‘‘Systems Disruptions and Malfunctions’’).
5 A subcommittee of the Committee on Exchange
Procedure is composed of members of the full
Committee on Exchange Procedure. The Exchange
also proposed to made corresponding changes to
Article 2, Rule 5, relating to appellate rights arising
from subcommittee decisions, to confirm that the
decision of the subcommittee is final and that the
Exchange’s initial decision is not stayed pending
PO 00000
Frm 00087
Fmt 4703
Sfmt 4703
14287
proposes to eliminate the appeal to the
full Committee. Thus, the decision of
this subcommittee will be the final
Exchange action on the matter. The
Exchange also proposes to permit an
appeal of an eligibility review under
Article 20, Rule 10(b).6
Finally, the proposed change would
amend Article 20, Rule 11 to give the
Exchange the discretion, in situations
where it is acting on its own initiative
to respond to systems disruptions or
extraordinary market conditions or
other circumstances, to determine that
the number of affected transactions is
such that immediate finality is
necessary to maintain a fair and orderly
market and to protect investors and the
public interest. The Exchange noted that
this determination is intended to
provide certainty to participants whose
transactions were affected by decisions
in these unusual situations.7
III. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning Amendment No.
2, including whether Amendment
No. 2 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–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 (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
any appeal to the subcommittee. The Exchange also
proposed changes to Article 2, Rule 5, to ensure that
this rule language is consistent with the changes
proposed in Article 20, Rule 10 and made other
minor adjustments to the rule text.
6 See Amendment No. 2.
7 The Exchange noted that other markets have
included a similar provision in their rules. See
Nasdaq Rule 11890(c)(1); NYSE Arca Rule
7.10(c)(2).
E:\FR\FM\17MRN1.SGM
17MRN1
]]>Agencies
[Federal Register Volume 73, Number 52 (Monday, March 17, 2008)]
[Notices]
[Pages 14286-14287]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-5220]
[[Page 14286]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57464; File No. SR-CHX-2008-02]
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Notice of Filing of Proposed Rule Change To Amend its Bylaws Relating
to the Definition of a Public Director
March 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 February 26, 2008, the Chicago Stock Exchange, Inc. (``CHX'' or
``Exchange'') 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 the CHX.
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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The CHX proposes to amend the definition of ``public director,'' as
set forth in the CHX's bylaws. The text of this proposed rule change is
available at the CHX, 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 on 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
The Exchange's bylaws currently define a public director as, among
other things, a director (i) who is not a broker or dealer or an
officer or employee of a broker or dealer; and (ii) who does not have
any other material business relationship with a broker or dealer.\3\
---------------------------------------------------------------------------
\3\ See Article II, Section 2(b) of the Exchange's Bylaws.
---------------------------------------------------------------------------
Through this proposal, the Exchange seeks to amend the definition
of ``public director'' to clarify its scope.\4\ Specifically, the
Exchange proposes to amend the definition of a public director to only
exclude persons who have the specified relationships with a broker or
dealer that is registered under the Act. The Exchange believes that
this change is appropriate because it would ensure that a public
director is not affiliated with a U.S. broker or dealer (which must
register under the Act), while allowing a public director to have a
business relationship with a non-U.S. broker or dealer (which typically
is not required to register under the Act). The Exchange believes that
this change is consistent with the director independence qualifications
used by at least one other self-regulatory organization.\5\
---------------------------------------------------------------------------
\4\ In this proposal, the Exchange also seeks to insert the word
``a'' in the rule text to correct an apparent typographical error.
\5\ See Section 1(c) of the Independence Qualifications section
of the Independence Policy of the NYSE Euronext Board of Directors.
---------------------------------------------------------------------------
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).\6\ The proposed rule change is consistent
with Section 6(b)(5) of the Act \7\ 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 the
definition of a public director in a manner that continues to ensure
the independence of a public director, while allowing a public director
to have business relationships with non-U.S. entities.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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.
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 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-2008-02 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-2008-02. 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.
[[Page 14287]]
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 Number SR-CHX-2008-02 and should be submitted on
or before April 7, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------
\8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-5220 Filed 3-14-08; 8:45 am]
BILLING CODE 8011-01-P
