Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Granting Approval of Proposed Rule Change To Amend Rules Relating to Fingerprint-Based Record Checks, 22185-22186 [E8-8875]

Download as PDF Federal Register / Vol. 73, No. 80 / Thursday, April 24, 2008 / Notices (‘‘DPMs’’) that meet the Liquidity Provider Guidelines (‘‘LPGs’’) provided for in the CBSX Fees Schedule is pegged to the taker fee amount on each trade. When CBOE raised the fee for ISO and IOC order executions to $0.0030 per share, it did not intend to increase the DPM rebate for those orders to $0.0030 per share. This filing establishes that the rebate for DPMs that meet the LPGs is $0.0029 per share. The proposed changes take effect on Friday, April 18, 2008. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act 6 in general, and furthers the objectives of Section 6(b)(4) of the Act 7 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among Exchange members and other persons using its facilities. 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 No written comments were solicited or received with respect to the proposed rule change. sroberts on PROD1PC70 with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective upon filing pursuant to Section 19(b)(3)(A) of the Act 8 and Rule 19b–4(f)(2) thereunder.9 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. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule 6 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 8 15 U.S.C. 78s(b)(3)(A). 9 17 CFR 19b–4(f)(2). 16:15 Apr 23, 2008 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 No. SR–CBOE–2008–47 on the subject line. [Release No. 34–57684; File No. SR–CHX– 2008–03] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Granting Approval of Proposed Rule Change To Amend Rules Relating to Fingerprint-Based Record Checks April 18, 2008. I. Introduction On February 26, 2008, the Chicago Stock Exchange, Inc. (‘‘CHX’’ or • Send paper comments in triplicate ‘‘Exchange’’), filed with the Securities to Nancy M. Morris, Secretary, and Exchange Commission Securities and Exchange Commission, (‘‘Commission’’) pursuant to Section 100 F Street, NE., Washington, DC 19(b)(1) of the Securities Exchange Act 20549–1090. of 1934 (‘‘Act’’) 1 and Rule 19b–4 All submissions should refer to File thereunder,2 a proposed rule change to Number SR–CBOE–2008–47. This file amend rules relating to fingerprintnumber should be included on the based criminal record checks of subject line if e-mail is used. To help the Exchange staff and other persons. The Commission process and review your proposed rule change was published for comments more efficiently, please use comment in the Federal Register on only one method. The Commission will March 18, 2008.3 The Commission post all comments on the Commission’s received no comments on the proposal. Internet Web site (http://www.sec.gov/ This order approves the proposed rule rules/sro.shtml). Copies of the change. submission, all subsequent II. Description of the Proposal amendments, all written statements As part of its trading model rule set, with respect to the proposed rule the Exchange included a fingerprint rule change that are filed with the that requires the Exchange to conduct Commission, and all written fingerprint-based criminal record checks communications relating to the of Exchange staff, certain independent proposed rule change between the Commission and any person, other than contractors and other persons that have regular access to the Exchange’s those that may be withheld from the facilities and premises.4 The Exchange public in accordance with the proposes to amend this rule to remove provisions of 5 U.S.C. 552, will be the requirement that the Exchange available for inspection and copying in conduct these fingerprint-based the Commission’s Public Reference background checks. The Exchange Room, 100 F Street, NE., Washington, believes that those criminal record DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. background checks of staff and consultants may be obtained through Copies of such filing also will be more efficient means. This proposal has available for inspection and copying at the principal office of the Exchange. All no impact on the fingerprinting obligations that apply to Exchange comments received will be posted participants and participant firm without change; the Commission does personnel. The Exchange will continue not edit personal identifying to require its participants to adhere to information from submissions. You applicable fingerprinting obligations.5 should submit only information that you wish to make available publicly. All III. Discussion and Commission submissions should refer to File Findings Number SR–CBOE–2008–47 and should The Commission has carefully be submitted on or before May 15, 2008. reviewed the proposed rule change and For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–8926 Filed 4–23–08; 8:45 am] 10 17 Jkt 214001 SECURITIES AND EXCHANGE COMMISSION Paper Comments BILLING CODE 8010–01–P 7 15 VerDate Aug<31>2005 change is consistent with the Act. Comments may be submitted by any of the following methods: 22185 PO 00000 CFR 200.30–3(a)(12). Frm 00061 Fmt 4703 Sfmt 4703 1 15 U.S.C. 78s(b)(l). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 57479 (March 12, 2008), 73 FR 14516 (March 18, 2008). 4 See Article 6, Rule 10(b) of the Exchange’s Rules. 5 See Article 6, Rule 10(a) of the Exchange’s Rules; see also Section 17(f)(2) of the Act (15 U.S.C. 78q(f)(2)) and Rule 17f–2 thereunder (17 CFR 240.17f–2). 2 17 E:\FR\FM\24APN1.SGM 24APN1 22186 Federal Register / Vol. 73, No. 80 / Thursday, April 24, 2008 / Notices finds that it is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.6 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,7 which, among other things, requires that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating transactions in securities, 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. The Commission believes that the Exchange’s proposal to permit it the flexibility to determine whether it conducts fingerprint-based criminal record checks of Exchange staff and other persons, or whether it obtains those background checks in another manner, is reasonable and consistent with the Act. The Commission notes that the proposed rule change has no effect on the current fingerprinting obligations of Exchange participants and participant firm personnel under the rules of the Exchange or of the Act and the rules thereunder. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,8 that the proposed rule change (SR–CHX–2008– 03), be, and hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Nancy M. Morris, Secretary. [FR Doc. E8–8875 Filed 4–23–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57681; File No. SR–FINRA– 2008–011] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of Proposed Rule Change To Amend the Trade Reporting Structure and Require Submission of Non-Tape Reports To Identify Other Members for Agency and Riskless Principal Transactions April 17, 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 March 28, 2008, the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) (f/k/a the 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 the FINRA. 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 FINRA is proposing to amend its trade reporting rules applicable to over-thecounter (‘‘OTC’’) equity transactions 3 to: (1) Replace the current market maker-based trade reporting framework with an ‘‘executing party’’ framework; and (2) require that any member with the trade reporting obligation under FINRA rules that is acting in a riskless principal or agency capacity on behalf of one or more other members submit non-tape report(s) to FINRA, as necessary, to identify such other member(s) as a party to the trade. The text of the proposed rule change is available at FINRA, the Commission’s Public Reference Room, and http:// www.finra.org. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Specifically, OTC equity transactions are: (1) Transactions in NMS stocks, as defined in Rule 600(b) of Regulation NMS under the Act, effected otherwise than on an exchange, which are reported through the Alternative Display Facility (‘‘ADF’’) or a Trade Reporting Facility (‘‘TRF’’); and (2) transactions in ‘‘OTC Equity Securities,’’ as defined in NASD Rule 6610 (e.g., OTC Bulletin Board and Pink Sheets securities), Direct Participation Program (‘‘DPP’’) securities and PORTAL equity securities, which are reported through the OTC Reporting Facility (‘‘ORF’’). The ADF, TRFs and ORF are collectively referred to herein as the ‘‘FINRA Facilities.’’ sroberts on PROD1PC70 with NOTICES 2 17 6 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 7 15 U.S.C. 78f(b)(5). 8 15 U.S.C. 78s(b)(2). 9 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 16:49 Apr 23, 2008 Jkt 214001 PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 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 these 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 aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Trade Reporting Structure Currently, the following structure is in place for purposes of reporting most OTC equity transactions to FINRA: (1) In transactions between two market makers, the sell-side reports; (2) in transactions between a market maker and a non-market maker, the market maker reports; (3) in transactions between two non-market makers, the sell-side reports; and (4) in transactions between a member and either a nonmember or customer, the member reports.4 This reporting structure can result in confusion, delays and doublereporting, as the parties to a trade attempt to determine which party has the trade reporting obligation. Today, a firm’s status as a market maker may not always be apparent to the contra-party to a trade and, increasingly, firms’ proprietary desks (other than their market making desks) are handling and executing transactions in equity securities. In addition, members are required to report whether any applicable exception or exemption to Rule 611 of Regulation NMS (the Order Protection Rule) applies to a transaction, which is information that may not be readily known to the party with the reporting obligation if it is not the executing broker to the transaction, e.g., whether the executing broker has routed 4 See NASD Rules 4632(b) and 6130(c) relating to the NASD/Nasdaq TRF; 4632A(b) relating to the ADF; 4632C(b) and 6130C(c) relating to the NASD/ NSX TRF; 4632E(b) and 6130E(c) relating to the NASD/NYSE TRF; and 6130(c) and 6620(b) relating to the ORF. For purposes of reporting transactions in DPP securities to FINRA, NASD Rule 6920(b) requires that in a transaction between two members, the member representing the sell-side report and in a transaction between a member and customer, the member report. E:\FR\FM\24APN1.SGM 24APN1

Agencies

[Federal Register Volume 73, Number 80 (Thursday, April 24, 2008)]
[Notices]
[Pages 22185-22186]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-8875]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57684; File No. SR-CHX-2008-03]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Order Granting Approval of Proposed Rule Change To Amend Rules Relating 
to Fingerprint-Based Record Checks

April 18, 2008.

I. Introduction

    On February 26, 2008, 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 rules relating to fingerprint-based 
criminal record checks of Exchange staff and other persons. The 
proposed rule change was published for comment in the Federal Register 
on March 18, 2008.\3\ The Commission received no comments on the 
proposal. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(l).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 57479 (March 12, 
2008), 73 FR 14516 (March 18, 2008).
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II. Description of the Proposal

    As part of its trading model rule set, the Exchange included a 
fingerprint rule that requires the Exchange to conduct fingerprint-
based criminal record checks of Exchange staff, certain independent 
contractors and other persons that have regular access to the 
Exchange's facilities and premises.\4\ The Exchange proposes to amend 
this rule to remove the requirement that the Exchange conduct these 
fingerprint-based background checks. The Exchange believes that those 
criminal record background checks of staff and consultants may be 
obtained through more efficient means. This proposal has no impact on 
the fingerprinting obligations that apply to Exchange participants and 
participant firm personnel. The Exchange will continue to require its 
participants to adhere to applicable fingerprinting obligations.\5\
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    \4\ See Article 6, Rule 10(b) of the Exchange's Rules.
    \5\ See Article 6, Rule 10(a) of the Exchange's Rules; see also 
Section 17(f)(2) of the Act (15 U.S.C. 78q(f)(2)) and Rule 17f-2 
thereunder (17 CFR 240.17f-2).
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III. Discussion and Commission Findings

    The Commission has carefully reviewed the proposed rule change and

[[Page 22186]]

finds that it is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange.\6\ In particular, the Commission finds that the proposed rule 
change is consistent with Section 6(b)(5) of the Act,\7\ which, among 
other things, requires that the rules of a national securities exchange 
be designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in regulating 
transactions in securities, 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.
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    \6\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the Exchange's proposal to permit it 
the flexibility to determine whether it conducts fingerprint-based 
criminal record checks of Exchange staff and other persons, or whether 
it obtains those background checks in another manner, is reasonable and 
consistent with the Act. The Commission notes that the proposed rule 
change has no effect on the current fingerprinting obligations of 
Exchange participants and participant firm personnel under the rules of 
the Exchange or of the Act and the rules thereunder.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-CHX-2008-03), be, and hereby 
is, approved.
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    \8\ 15 U.S.C. 78s(b)(2).
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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E8-8875 Filed 4-23-08; 8:45 am]
BILLING CODE 8010-01-P