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Notice

Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, Incorporated Relating to Membership Dues and Fees

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Start Preamble February 5, 2001.

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 January 30, 2001, the Chicago Stock Exchange, Incorporated (“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 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 Start Printed Page 9735comments 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”), retroactive to January 1, 2001, to reinstate a monthly cap on transaction fees of $.40 per 100 average monthly gross round lot shares. The text of the proposed rule change is below. Proposed new language is in italics.

Membership Dues and Fees

* * * * *

F. Transaction and Order Processing Fees

4. Transaction Fees

a.-g. No change to text.

h. Effective January 1, 2001, monthly maximums for fees:

(1) Maximum monthly transaction fees for orders sent via MAX: $7,000;

(2) Maximum monthly transaction fee for transactions in NASDAQ/NMS Securities: $110,000;

(3) Maximum monthly transaction fee for transactions in Dual Trading System Securities: $110,000;

(4) Maximum monthly transaction fees shall not exceed the lesser of that specified in (1), (2) or (3) above, or $.40 per 100 average monthly gross round lot shares.

* * * * *

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 Organizations's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

1. Purpose

On December 18, 2000, the Exchange filed a proposed rule change to amend the Schedule in several ways.[4] Among other things, the proposal made changes to the CHX's transaction fee structure by: (a) Setting a flat per share fee, instead of a graduated fee based on the number of shares traded, for agency transactions in certain securities that are executed through a floor broker; (b) raising the current caps on transaction fees paid by member firms; and (c) reorganizing the Schedule to include all of its transaction fees in the same place.

In the course of making these changes, the Exchange inadvertently omitted one of the monthly caps on transaction fees. The Exchange has instituted several fee caps, including dollar-valued caps on transactions sent through the CHX's MAX system and on transactions in both Nasdaq/NMS and Dual Trading System securities.[5] The cap to be reinstated through this proposal provides an additional ceiling on those fees by ensuring that a member's maximum monthly transaction fees will not exceed $.40 per 100 average monthly gross round lot shares, if this calculation results in a lower fee payment.

2. Statutory Basis

The Exchange believes the proposed rule change is consistent with Section 6(b)(4) of the Act [6] 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 [7] and subparagraph (f)(2) of Rule 19b-4 thereunder,[8] 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 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-01-04, and should be submitted by March 2, 2001.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[9]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  15 U.S.C. 78s(b)(3)(A)(ii).

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4.  See Securities Exchange Act Release No. 43778 (December 28, 2000), 66 FR 1164 (January 5, 2001) (SR-CHX-00-38).

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5.  Dual Trading System securities are listed on the New York Stock Exchange or the American Stock Exchange and traded on the CHX.

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7.  15 U.S.C. 78s(b)(3)(A)(ii).

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[FR Doc. 01-3363 Filed 2-8-01; 8:45 am]

BILLING CODE 8010-01-M