Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding the Obligations of Exchange-Registered Institutional Brokers, 44386-44387 [2011-18684]
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Federal Register / Vol. 76, No. 142 / Monday, July 25, 2011 / Notices
personal information which may
infringe on an individual’s privacy
rights from documents filed in this
proceeding.
Intervention. Those persons, other
than the Petitioner and respondent,
wishing to be heard in this matter are
directed to file a notice of intervention.
See 39 CFR 3001.111(b). Notices of
intervention in this case are to be filed
on or before August 15, 2011. A notice
of intervention shall be filed using the
Internet (Filing Online) at the
Commission’s Web site, https://
www.prc.gov, unless a waiver is
obtained for hardcopy filing. See 39 CFR
3001.9(a) and 3001.10(a).
Further procedures. By statute, the
Commission is required to issue its
decision within 120 days from the date
it receives the appeal. See 39 U.S.C.
404(d)(5). A procedural schedule has
been developed to accommodate this
statutory deadline. In the interest of
expedition, in light of the 120-day
decision schedule, the Commission may
request the Postal Service or other
participants to submit information or
memoranda of law on any appropriate
issue. As required by Commission rules,
if any motions are filed, responses are
due 7 days after any such motion is
filed. See 39 CFR 3001.21.
It is ordered:
1. The Postal Service shall file the
applicable administrative record
regarding this appeal no later than July
29, 2011.
2. Any responsive pleading by the
Postal Service to this Notice is due no
later than July 29, 2011.
3. The procedural schedule listed
below is hereby adopted.
4. Pursuant to 39 U.S.C. 505, Tracy N.
Ferguson is designated officer of the
Commission (Public Representative) to
represent the interests of the general
public.
5. The Secretary shall arrange for
publication of this notice and order and
procedural schedule in the Federal
Register.
PROCEDURAL SCHEDULE
July 14, 2011 ........................
July 29, 2011 ........................
July 29, 2011 ........................
August 15, 2011 ...................
August 18, 2011 ...................
September 7, 2011 ..............
September 22, 2011 ............
September 29, 2011 ............
November 4, 2011 ...............
Filing of Appeal.
Deadline for the Postal Service to file the administrative record in this appeal.
Deadline for the Postal Service to file an answer responding to the application for suspension.
Deadline for notices to intervene (see 39 CFR 3001.111(b)).
Deadline for Petitioner’s Form 61 or initial brief in support of petition (see 39 CFR 3001.115(a) and (b)).
Deadline for answering brief in support of the Postal Service (see 39 CFR 3001.115(c)).
Deadline for reply briefs in response to answering briefs (see 39 CFR 3001.115(d)).
Deadline for motions by any party requesting oral argument; the Commission will schedule oral argument only
when it is a necessary addition to the written filings (see 39 CFR 3001.116).
Expiration of the Commission’s 120-day decisional schedule (see 39 U.S.C. 404(d)(5)).
By the Commission.
Shoshana M. Grove,
Secretary.
Act Rule 19b–4(f)(6) 3 which is effective
upon filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
[FR Doc. 2011–18611 Filed 7–22–11; 8:45 am]
BILLING CODE 7710–FW–P
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64915; File No. SR–CHX–
2011–13]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change Regarding
the Obligations of ExchangeRegistered Institutional Brokers
jlentini on DSK4TPTVN1PROD with NOTICES
July 19, 2011.
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 July 12,
2011, the Chicago Stock Exchange, Inc.
(‘‘CHX’’ or the ‘‘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 prepared by the CHX. CHX has
filed this proposal pursuant to Exchange
1 15
2 17
CHX proposes to add Interpretation
and Policy .04 to Article 17, Rule 3
(Institutional Broker Responsibilities) to
include an explicit reference to the
obligation of Exchange-registered to
seek execution of orders which they
handle in a prompt and timely manner.
The text of this proposed rule change is
available on the Exchange’s Web site at
(https://www.chx.com) 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 changes and discussed
any comments it received regarding the
proposal. 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,
U.S.C.78s(b)(1).
CFR 240.19b–4.
VerDate Mar<15>2010
16:15 Jul 22, 2011
3 17
Jkt 223001
PO 00000
CFR 240.19b–4(f)(6).
Frm 00088
Fmt 4703
Sfmt 4703
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
Through this proposal, the Exchange
seeks to add Interpretations and Policies
.04 to Article 17, Rule 3
(Responsibilities of Institutional
Brokers) to make explicit the obligation
of Institutional Brokers registered with
the Exchange to handle orders in a
prompt and timely manner. The
obligation to handle orders in a prompt
and timely manner is part of the existing
responsibility of a broker dealer to seek
best execution when handling or
executing an order on behalf of a
customer.4 The Exchange’s Market
Regulation Department conducts routine
automated surveillance for compliance
by Institutional Brokers with the
requirement to handle and execute
orders in a timely manner. The explicit
4 See, e.g., NASD Rule 2320. (Best Execution and
Interpositioning), ‘‘In any transaction for or with a
customer or a customer of another broker-dealer, a
member and persons associated with a member
shall use reasonable diligence to ascertain the best
market for the subject security and buy or sell in
such market so that the resultant price to the
customer is as favorable as possible under
prevailing market conditions.’’
E:\FR\FM\25JYN1.SGM
25JYN1
Federal Register / Vol. 76, No. 142 / Monday, July 25, 2011 / Notices
reference in the Interpretations and
Policies to our rules to the requirement
of Institutional Brokers to handle orders
in a prompt and timely manner would
reinforce this duty to the Institutional
Brokers operating on the Exchange, and
clarify the nature and scope of this
obligation.
The requirement to handle orders in
a prompt and timely manner would be
subject to the existing provisions of that
rule relating to ‘‘not held’’ orders. Not
held orders involve price and time
discretion and an Institutional Broker is
permitted to delay the execution of a not
held order if it believes that such action
is in the best interests of the customer.
Thus, the requirement to handle orders
in a prompt and timely manner, while
still applicable to not held orders, must
allow for the legitimate application of
price and time discretion by the
Institutional Broker.5
jlentini on DSK4TPTVN1PROD with NOTICES
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act in general,6 and
furthers the objectives of Section 6(b)(5)
in particular,7 in that it is designed to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transaction in securities, to
remove impediments and perfect the
mechanisms of a free and open market,
and, in general, to protect investors and
the public interest by reinforcing the
duties of best execution and the
requirement to handle orders in a
prompt and timely manner to the
Institutional Brokers operating on the
Exchange, and clarify the nature and
scope of this obligation. In addition, the
Exchange believes that the proposed
rule change is consistent with Section
6(b) of the Act 8 in general, and furthers
the objectives of Section 6(b)(1) of the
Act 9 in particular, in that it allows the
Exchange to be organized and have the
capacity to be able to carry out the
purposes of the Act and to comply, and
(subject to any rule or order of the
Commission pursuant to section 17(d)
or 19(g)(2) of the Act) to enforce
compliance by its members and persons
associated with such members, with the
provisions of the Act, the rules and
regulations thereunder, and the rules of
the exchange. As noted above, the
5 If an Institutional Broker neglected to take any
action on a not held order for an improper purpose,
e.g., inattention to or forgetting about the order,
however, it could still be charged for failure to
comply with these provisions.
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
8 15 U.S.C. 78f.
9 15 U.S.C. 78f(b)(1).
VerDate Mar<15>2010
16:15 Jul 22, 2011
Jkt 223001
44387
Exchange believes that by adding an
Interpretation and Policy to make
explicit the obligation to handle orders
in a prompt and timely manner, this
proposal advances the purposes of the
Exchange Act by providing added
clarity about the nature and extent of
the duties owed by Exchange
Participants, and contributes to the
ability of the CHX to effectively enforce
compliance with those requirements.
Electronic Comments
B. Self-Regulatory Organization’s
Statement on Burden on Competition
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
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 Regarding 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
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days after the date of
the 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
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend 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
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
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 this
requirement.
PO 00000
10 15
11 17
Frm 00089
Fmt 4703
Sfmt 9990
• 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–2011–13 on the
subject line.
Paper Comments
All submissions should refer to File
Number SR–CHX–2011–13. 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 website viewing and
printing 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
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–
2011–13 and should be submitted on or
before August 15, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–18684 Filed 7–22–11; 8:45 am]
BILLING CODE 8011–01–P
12 17
E:\FR\FM\25JYN1.SGM
CFR 200.30–3(a)(12).
25JYN1
]]>Agencies
[Federal Register Volume 76, Number 142 (Monday, July 25, 2011)]
[Notices]
[Pages 44386-44387]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-18684]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64915; File No. SR-CHX-2011-13]
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Regarding the Obligations of Exchange-Registered Institutional Brokers
July 19, 2011.
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 July 12, 2011, the Chicago Stock Exchange, Inc. (``CHX'' or
the ``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 prepared by the CHX. CHX has filed this
proposal pursuant to Exchange Act Rule 19b-4(f)(6) \3\ which is
effective upon filing with the Commission. 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.
\3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
CHX proposes to add Interpretation and Policy .04 to Article 17,
Rule 3 (Institutional Broker Responsibilities) to include an explicit
reference to the obligation of Exchange-registered to seek execution of
orders which they handle in a prompt and timely manner. The text of
this proposed rule change is available on the Exchange's Web site at
(https://www.chx.com) 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 changes and
discussed any comments it received regarding the proposal. 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
Through this proposal, the Exchange seeks to add Interpretations
and Policies .04 to Article 17, Rule 3 (Responsibilities of
Institutional Brokers) to make explicit the obligation of Institutional
Brokers registered with the Exchange to handle orders in a prompt and
timely manner. The obligation to handle orders in a prompt and timely
manner is part of the existing responsibility of a broker dealer to
seek best execution when handling or executing an order on behalf of a
customer.\4\ The Exchange's Market Regulation Department conducts
routine automated surveillance for compliance by Institutional Brokers
with the requirement to handle and execute orders in a timely manner.
The explicit
[[Page 44387]]
reference in the Interpretations and Policies to our rules to the
requirement of Institutional Brokers to handle orders in a prompt and
timely manner would reinforce this duty to the Institutional Brokers
operating on the Exchange, and clarify the nature and scope of this
obligation.
---------------------------------------------------------------------------
\4\ See, e.g., NASD Rule 2320. (Best Execution and
Interpositioning), ``In any transaction for or with a customer or a
customer of another broker-dealer, a member and persons associated
with a member shall use reasonable diligence to ascertain the best
market for the subject security and buy or sell in such market so
that the resultant price to the customer is as favorable as possible
under prevailing market conditions.''
---------------------------------------------------------------------------
The requirement to handle orders in a prompt and timely manner
would be subject to the existing provisions of that rule relating to
``not held'' orders. Not held orders involve price and time discretion
and an Institutional Broker is permitted to delay the execution of a
not held order if it believes that such action is in the best interests
of the customer. Thus, the requirement to handle orders in a prompt and
timely manner, while still applicable to not held orders, must allow
for the legitimate application of price and time discretion by the
Institutional Broker.\5\
---------------------------------------------------------------------------
\5\ If an Institutional Broker neglected to take any action on a
not held order for an improper purpose, e.g., inattention to or
forgetting about the order, however, it could still be charged for
failure to comply with these provisions.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act in general,\6\ and furthers the objectives
of Section 6(b)(5) in particular,\7\ in that it is designed to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transaction in
securities, to remove impediments and perfect the mechanisms of a free
and open market, and, in general, to protect investors and the public
interest by reinforcing the duties of best execution and the
requirement to handle orders in a prompt and timely manner to the
Institutional Brokers operating on the Exchange, and clarify the nature
and scope of this obligation. In addition, the Exchange believes that
the proposed rule change is consistent with Section 6(b) of the Act \8\
in general, and furthers the objectives of Section 6(b)(1) of the Act
\9\ in particular, in that it allows the Exchange to be organized and
have the capacity to be able to carry out the purposes of the Act and
to comply, and (subject to any rule or order of the Commission pursuant
to section 17(d) or 19(g)(2) of the Act) to enforce compliance by its
members and persons associated with such members, with the provisions
of the Act, the rules and regulations thereunder, and the rules of the
exchange. As noted above, the Exchange believes that by adding an
Interpretation and Policy to make explicit the obligation to handle
orders in a prompt and timely manner, this proposal advances the
purposes of the Exchange Act by providing added clarity about the
nature and extent of the duties owed by Exchange Participants, and
contributes to the ability of the CHX to effectively enforce compliance
with those requirements.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------
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 Regarding 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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the 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). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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 this requirement.
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend 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
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-2011-13 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-CHX-2011-13. 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 website viewing and
printing 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 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-2011-13 and should be
submitted on or before August 15, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------
\12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-18684 Filed 7-22-11; 8:45 am]
BILLING CODE 8011-01-P
