Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Regarding the Definition of Qualified Contingent Trade, 26174-26176 [E8-10210]
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26174
Federal Register / Vol. 73, No. 90 / Thursday, May 8, 2008 / Notices
persons engaged in regulating, clearing,
settling, processing information with
respect to, and facilitating 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.
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.
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
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–2008–25 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–BSE–2008–25. This file
17:22 May 07, 2008
Jkt 214001
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been
substantially prepared by CHX. On May
1, 2008, CHX submitted Amendment
No. 1 to the proposed rule change. The
Exchange has filed the proposal as a
‘‘non-controversial’’ rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6) thereunder,4
which renders it effective upon filing
with the Commission. The Commission
is publishing this notice to solicit
comments on the proposed rule change,
as amended, from interested persons.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.51
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–10094 Filed 5–7–08; 8:45 am]
In its filing with the Commission,
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. CHX has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
BILLING CODE 8010–01–P
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:
VerDate Aug<31>2005
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 also will be
available for inspection and copying at
the principal office of the BSE. 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–BSE–2008–25 and should
be submitted on or before May 29, 2008.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57767; File No. SR–CHX–
2008–06]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change and
Amendment No. 1 Thereto Regarding
the Definition of Qualified Contingent
Trade
May 2, 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 April 29,
2008, the Chicago Stock Exchange, Inc.
(‘‘CHX’’ or ‘‘Exchange’’) filed with the
51 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Frm 00101
Fmt 4703
Sfmt 4703
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
rules to delete from the definition of
Qualified Contingent Trade the
requirement that such transactions be
for a minimum size of either 10,000
shares or $200,000 in transaction value.
The text of the proposed rule change is
available at CHX, the Commission’s
Public Reference Room, and https://
www.chx.com/rules/
proposed_rules.htm.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange’s rules currently define
the term ‘‘Qualified Contingent Trade’’
according to the definition included in
an exemptive order issued by the
Commission on August 31, 2006.5
Pursuant to the Exemptive Order,
Qualified Contingent Trades are exempt
from the trade-through restrictions of
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
5 See Securities Exchange Act Release No. 54389
(August 31, 2006), 71 FR 52829 (September 7, 2006)
(Order Granting an Exemption for Qualified
Contingent Trades from Rule 611(a) of Regulation
NMS) (‘‘Exemptive Order’’).
4 17
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Federal Register / Vol. 73, No. 90 / Thursday, May 8, 2008 / Notices
Regulation NMS.6 The Exchange has
incorporated an identical definition of
Qualified Contingent Trades in order
that such trades could also be exempted
from Exchange rules restricting
intermarket trade-throughs.
On April 4, 2008, the Commission
issued a revised exemptive order
eliminating one of the elements of the
original Qualified Contingent Trade
definition.7 Based upon a request from
the Chicago Board Options Exchange,
Incorporated, the Revised Exemptive
Order deleted the minimum size
restrictions of 10,000 shares or $200,000
in transaction value which were part of
the original definition. The Exchange
proposes to eliminate the size and value
restrictions from its own definition of
Qualified Contingent Trade in order to
operate its marketplace in a manner
consistent with Commission directives.
The Exchange proposes to change its
rules to eliminate any minimum size or
value restrictions in its definition of the
term Qualified Contingent Trade. The
Exchange also proposes to eliminate an
obsolete reference in the rule to the
prospective application of Regulation
NMS and to correct an erroneous
citation in Article 20, Rule 5 to the
Qualified Contingent Trade definition.
2. Statutory Basis
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) of the Act.8 The Exchange
believes that the proposed changes are
consistent with Section 6(b)(5) of the
Act,9 because they 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 allowing CHX to amend its
rules to reflect the Revised Exemptive
Order defining the term Qualified
Contingent Trade.
mstockstill on PROD1PC66 with 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 that is not
necessary or appropriate in furtherance
of the purposes of the Act.
6 17
CFR 242.600 et seq. See 17 CFR 242.611.
Securities Exchange Act Release No. 57620
(April 4, 2008), 73 FR 19271 (April 9, 2008) (Order
Modifying the Exemption for Qualified Contingent
Trades from Rule 611(a) of Regulation NMS)
(‘‘Revised Exemptive Order’’).
8 15 U.S.C. 78(f)(b).
9 15 U.S.C. 78(f)(b)(5).
7 See
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17:22 May 07, 2008
Jkt 214001
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.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing rule change
does not: (1) Significantly affect the
protection of investors or the public
interest; (2) impose any significant
burden on competition; and (3) become
operative for 30 days after the date of
this filing, or such shorter time as the
Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 10 and Rule 19b–
4(f)(6) thereunder.11
A proposed rule change filed under
19b–4(f)(6) normally may not become
operative prior to 30 days after the date
of filing.12 However, Rule 19b–
4(f)(6)(iii) 13 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day operative
delay. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because such waiver would allow the
Exchange to implement the proposal
without needless delay. The
Commission notes that it recently
modified the definition of Qualified
Contingent Trade originally adopted in
the Exemptive Order.14 For this reason,
the Commission designates the
proposed rule change to be operative
upon filing with the Commission.15
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
necessary or appropriate in the public
10 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
12 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) requires that a self-regulatory
organization submit to the Commission written
notice of its intent to file the proposed rule change,
along with a brief description and text of the
proposed rule change, at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied the fiveday pre-filing notice requirement.
13 Id.
14 See Revised Exemptive Order, supra note 7.
15 For the purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
11 17
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26175
interest, for the protection of investors
or otherwise in furtherance of the
purposes of the Act.16
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–2008–06 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–2008–06. 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 the filing also will be available
for inspection and copying at the
principal office of 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
16 15 U.S.C. 78s(b)(3)(C). For purposes of
calculating the 60-day period within which the
Commission may summarily abrogate the proposal,
the Commission considers the period to commence
on May 1, 2008, the date on which the Exchange
submitted Amendment No. 1.
E:\FR\FM\08MYN1.SGM
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26176
Federal Register / Vol. 73, No. 90 / Thursday, May 8, 2008 / Notices
should refer to File Number SR–CHX–
2008–06 and should be submitted on or
before May 29, 2008.
SEC.4 There are no changes to the text
of NASD Rule 2821 in this proposed
rule change.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–10210 Filed 5–7–08; 8:45 am]
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.
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57769; File No. SR–FINRA–
2008–015]
Self-Regulatory Organizations:
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Delay the Effective
Date of Certain FINRA Rule Changes
Approved in SR–NASD–2004–183
May 2, 2008.
mstockstill on PROD1PC66 with NOTICES
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 April 17,
2008, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) (f/k/a
National Association of Securities
Dealers, Inc. (‘‘NASD’’)) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III below, which Items have been
substantially prepared by FINRA.
FINRA has designated the proposed rule
change as constituting a ‘‘noncontroversial’’ rule change under
paragraph (f)(6) of Rule 19b–4 under the
Act,3 which renders the proposal
effective upon receipt of this filing by
the Commission. 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 a rule change to
delay the effective date of paragraphs (c)
and (d) of Rule 2821, as approved in
SR–NASD–2004–183, until after the
Commission has approved or
disapproved a proposed substantive rule
change to Rule 2821 that FINRA intends
to file in the near future. That
substantive rule change is not included
in this proposed rule change, but will be
the subject of a separate filing with the
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
1 15
VerDate Aug<31>2005
17:22 May 07, 2008
Jkt 214001
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
On September 7, 2007, the
Commission noticed the filing of
Amendment Nos. 3 and 4 and granted
accelerated approval of SR–NASD–
2004–183, FINRA’s new NASD Rule
2821, regarding broker-dealers’
compliance and supervisory
responsibilities for transactions in
deferred variable annuities.5 On
November 6, 2007, FINRA published
Regulatory Notice 07–53, which
announced the Commission’s approval
of Rule 2821 and established May 5,
2008 as the rule’s effective date.
Following SEC approval of the rule and
publication of the Regulatory Notice,
several firms requested that the effective
date of the approved rule be delayed to
allow firms additional time to make
necessary systems changes. In addition,
some firms raised various concerns
regarding paragraph (c) of Rule 2821
(Principal Review and Approval), which
had been revised by Amendment No. 4.
Rule 2821(c), in part, requires
principal review and approval ‘‘[p]rior
4 In the separate filing, FINRA plans to propose
changing the event that triggers the beginning of the
period within which the principal must review and
determine whether to approve or reject the
application. FINRA also intends to propose limiting
application of the rule to recommended
transactions. Finally, FINRA plans to propose to
clarify various other issues, including whether (and,
if so, under what circumstances) a broker-dealer can
forward funds to an affiliated insurance company
prior to the principal’s approval of the transactions.
5 See SEC Order Approving FINRA’s NASD Rule
2821 Regarding Members’ Responsibilities for
Deferred Variable Annuities, Securities Exchange
Act Release No. 56375 (Sept. 7, 2007), 72 FR 52403
(Sept. 13, 2007) (SR–NASD–2004–183); SEC
Corrective Order, Securities Exchange Act Release
No. 56375A (Sept. 14, 2007), 72 FR 53612 (Sept. 19,
2007) (SR–NASD–2004–183) (correcting the rule’s
effective date).
PO 00000
Frm 00103
Fmt 4703
Sfmt 4703
to transmitting a customer’s application
for a deferred variable annuity to the
issuing insurance company for
processing, but no later than seven
business days after the customer signs
the application.’’ A number of firms
asserted that seven business days
beginning at the time when the
customer signs the application may not
allow for a thorough principal review in
all cases. These firms asked that a
different timing mechanism be used.
Rule 2821(c) also states that a
principal must treat ‘‘all transactions as
if they have been recommended for
purposes of this principal review’’ and
may only approve the transaction if he
or she determines ‘‘that there is a
reasonable basis to believe that the
transaction would be suitable based on
the factors delineated in paragraph (b) of
this Rule.’’ A principal who determines
that the transaction is unsuitable
nonetheless may authorize the
processing of the transaction if the
principal determines that the
transaction was not recommended and
that the customer, after being informed
of the reason why the principal found
it to be unsuitable, affirms that he or she
wants to proceed with the purchase or
exchange of the deferred variable
annuity. Some firms questioned
whether broker-dealers that do not make
any recommendations to customers (and
generally do not employ principals to
perform suitability reviews) should be
subject to this provision.
Finally, in Regulatory Notice 07–53,
FINRA stated that Rule 2821(c) does not
permit the depositing of a customer’s
funds in an account at the insurance
company prior to completion of
principal review. In response to the
Regulatory Notice, a number of firms
explained that insurers’ financial
controls regarding the receipt of money
from customers often include holding
such funds in a general ‘‘suspense’’
account at the insurer. According to
these firms, insurers use an identifier to
track money held in the suspense
account and, if a contract is not issued,
the funds are promptly returned to the
customer. The firms further stated that
this process has been used for many
years without complications, makes
processing much more efficient and
effective, and receives significant
scrutiny by examiners from the SEC and
state insurance departments.
Accordingly, these firms asked that
insurers be allowed to deposit customer
funds in suspense accounts under
certain circumstances.
In light of those concerns, among
others, FINRA staff believed it was
prudent to give further consideration to
paragraph (c) of Rule 2821 and the
E:\FR\FM\08MYN1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 90 (Thursday, May 8, 2008)]
[Notices]
[Pages 26174-26176]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-10210]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57767; File No. SR-CHX-2008-06]
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
and Amendment No. 1 Thereto Regarding the Definition of Qualified
Contingent Trade
May 2, 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 April 29, 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 and
II below, which Items have been substantially prepared by CHX. On May
1, 2008, CHX submitted Amendment No. 1 to the proposed rule change. The
Exchange has filed the proposal as a ``non-controversial'' rule change
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6)
thereunder,\4\ which renders it effective upon filing with the
Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change, as amended, from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its rules to delete from the
definition of Qualified Contingent Trade the requirement that such
transactions be for a minimum size of either 10,000 shares or $200,000
in transaction value. The text of the proposed rule change is available
at CHX, the Commission's Public Reference Room, and https://www.chx.com/
rules/proposed_rules.htm.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, 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. 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 rules currently define the term ``Qualified
Contingent Trade'' according to the definition included in an exemptive
order issued by the Commission on August 31, 2006.\5\ Pursuant to the
Exemptive Order, Qualified Contingent Trades are exempt from the trade-
through restrictions of
[[Page 26175]]
Regulation NMS.\6\ The Exchange has incorporated an identical
definition of Qualified Contingent Trades in order that such trades
could also be exempted from Exchange rules restricting intermarket
trade-throughs.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 54389 (August 31,
2006), 71 FR 52829 (September 7, 2006) (Order Granting an Exemption
for Qualified Contingent Trades from Rule 611(a) of Regulation NMS)
(``Exemptive Order'').
\6\ 17 CFR 242.600 et seq. See 17 CFR 242.611.
---------------------------------------------------------------------------
On April 4, 2008, the Commission issued a revised exemptive order
eliminating one of the elements of the original Qualified Contingent
Trade definition.\7\ Based upon a request from the Chicago Board
Options Exchange, Incorporated, the Revised Exemptive Order deleted the
minimum size restrictions of 10,000 shares or $200,000 in transaction
value which were part of the original definition. The Exchange proposes
to eliminate the size and value restrictions from its own definition of
Qualified Contingent Trade in order to operate its marketplace in a
manner consistent with Commission directives. The Exchange proposes to
change its rules to eliminate any minimum size or value restrictions in
its definition of the term Qualified Contingent Trade. The Exchange
also proposes to eliminate an obsolete reference in the rule to the
prospective application of Regulation NMS and to correct an erroneous
citation in Article 20, Rule 5 to the Qualified Contingent Trade
definition.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 57620 (April 4,
2008), 73 FR 19271 (April 9, 2008) (Order Modifying the Exemption
for Qualified Contingent Trades from Rule 611(a) of Regulation NMS)
(``Revised Exemptive Order'').
---------------------------------------------------------------------------
2. Statutory Basis
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) of the Act.\8\ The Exchange believes that
the proposed changes are consistent with Section 6(b)(5) of the Act,\9\
because they 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 allowing CHX to amend its rules to reflect
the Revised Exemptive Order defining the term Qualified Contingent
Trade.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78(f)(b).
\9\ 15 U.S.C. 78(f)(b)(5).
---------------------------------------------------------------------------
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.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing rule change does not: (1) Significantly
affect the protection of investors or the public interest; (2) impose
any significant burden on competition; and (3) become operative for 30
days after the date of this filing, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
A proposed rule change filed under 19b-4(f)(6) normally may not
become operative prior to 30 days after the date of filing.\12\
However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay. The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest because such waiver
would allow the Exchange to implement the proposal without needless
delay. The Commission notes that it recently modified the definition of
Qualified Contingent Trade originally adopted in the Exemptive
Order.\14\ For this reason, the Commission designates the proposed rule
change to be operative upon filing with the Commission.\15\
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\12\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to
the Commission written notice of its intent to file the proposed
rule change, along with a brief description and text of the proposed
rule change, at least five business days prior to the date of filing
of the proposed rule change, or such shorter time as designated by
the Commission. The Exchange has satisfied the five-day pre-filing
notice requirement.
\13\ Id.
\14\ See Revised Exemptive Order, supra note 7.
\15\ For the purposes only of waiving the 30-day operative
delay, 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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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 necessary or appropriate
in the public interest, for the protection of investors or otherwise in
furtherance of the purposes of the Act.\16\
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\16\ 15 U.S.C. 78s(b)(3)(C). For purposes of calculating the 60-
day period within which the Commission may summarily abrogate the
proposal, the Commission considers the period to commence on May 1,
2008, the date on which the Exchange submitted Amendment No. 1.
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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-2008-06 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-2008-06. 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 the filing also will be available for
inspection and copying at the principal office of 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
[[Page 26176]]
should refer to File Number SR-CHX-2008-06 and should be submitted on
or before May 29, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-10210 Filed 5-7-08; 8:45 am]
BILLING CODE 8010-01-P
