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Notice

Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, Incorporated To Create a New Registration Fee and Annual Fee for Off-Floor Proprietary Securities Traders for CHX Member Firms for Which the CHX Acts as Designated Examining Authority

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Start Preamble July 26, 2000.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 Start Printed Page 47530(“Act”), [1] and Rule 19b-4 thereunder, [2] notice is hereby given that on July 17, 2000, the Chicago Stock Exchange, Incorporated (“CHX” or “Exchange”) filed with the Securities and Exchange Commission (“Commission” or “SEC”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Exchange has designated this proposal as one establishing or changing a due, fee, or other charge imposed by the CHX under Section 19(b)(3)(A)(ii) of the Act, [3] which renders the proposal effective upon filing with 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

The Exchange proposes to amend its membership dues and fees schedule (the “Schedule”) to reflect a new registration fee and annual fee for certain associated persons of member firms for which the CHX acts as the designated examining authority. The text of the proposed rule change is available upon request at the CHX or the Commission.

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 Exchange 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 Exchange 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 proposed rule change amends the Schedule to establish a $500 per person registration fee and a $500 per person annual fee for certain associated persons of member firms for which the CHX acts as the designated examining authority (“DEA”). Specifically, these fees would apply to those persons who are acting as off-floor proprietary securities traders for CHX member firms for which the CHX acts as the DEA.

These fees reflect the increased costs of administration and oversight involved in preparing and processing necessary Series 7 [4] registration sponsor forms for these off-floor traders; inputting and maintaining traders' employment, examination and disciplinary histories; tracking adherence to applicable Series 7 continuing education requirements; and conducting on-site examinations of firms that employ these off-floor traders. The new registration fee is designed to apply to all registration sponsor forms received on or after August 1, 2000. The new annual fee will be charged as of January 1, 2001.

2. Statutory Basis

The Exchange believes that the proposed rule change is consistent with Section 6(b)(4) of the Act [5] in that it provides for the equitable allocation of reasonable dues, fees and other charges among its members.

B. Self-Regulatory Organization's Statement on Burden on Competition

The Exchange does not believe that the proposed rule change will impose any inappropriate 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 solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

The proposed rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act [6] and subparagraph (f)(2) of Rule 19b-4 thereunder, [7] because it involves a due, fee, or other charge. 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 proposal is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. 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. Copies of such filing will also be available for inspection and copying at the principal office of the Exchange. All submissions should refer to file number SR-CHX-00-23, and should be submitted by August 23, 2000.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[8]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  U.S.C. 78s(b)(3)(A)(ii).

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4.  CHX Rules require persons acting as off-floor proprietary securities traders for CHX member firms for which the CHX acts as DEA to successfully complete the Uniform Registered Representative Exam, Series 7, and to meet certain continuing education requirements. See Article VI, Rule 3, Interpretation .02; Article VI, Rule 9. The Series 7 examination is designed to ensure that registered representatives, such as CHX off-floor proprietary securities traders, understand the legal requirements applicable to their activities. See July 20, 2000 letter from Ellen J. Neely, Vice President and General Counsel, CHX, to Nancy J. Sanow, Assistant director, Division of Market Regulation, SEC.

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6.  15 U.S.C. 78s(b)((3)(A)(ii).

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[FR Doc. 00-19502 Filed 8-1-00; 8:45 am]

BILLING CODE 8010-01-M