Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), and Rule 19b-4 thereunder, notice is hereby given that on March 4, 2002, The Cincinnati Stock Exchange, Incorporated (“CSE” or “Exchange”) filed with the Securities and ExchangeStart Printed Page 12070Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. 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 CSE proposes to activate the provisions of CSE Rules 11.3(a) and (c) to eliminate Rules 11.3(a) and (c) upon the completion of decimal conversion. The text of the proposed rule change is below. Proposed deletions are in brackets.
Rule 11.3Price Variations
[(a) Bids or offers in stocks traded on the Exchange at or above $1.00 per share shall not be made at a smaller variation than1/8of $1.00 per share; in stocks below $1.00 but at or above1/2of $1.00 per share, at a smaller variation than1/6of $1.00; in stocks below1/2of $1.00 per share, at a smaller variation than1/32of $1.00 per share; and in bonds at a smaller variation than1/8of 1% of the principal amount, except in the case of a dually or multiply-traded security where the principal exchange shall have a different rule or when the Board of Trustees of the Exchange shall provide otherwise. (Rule 11.3(a) will be eliminated upon completion of decimal conversion.)]
[(b)] Bids or offers in stocks traded on the Exchange shall not be made at a smaller variation than $.01 per share; and in bonds at a smaller variation than1/8of 1% of the principal amount.
[(c) Not withstanding (b) above, bids and offers in stocks not participating in the decimal pilot program and not converted to decimal pricing at or above $1.00 per share must be made in fractions at a minimum variation of1/16per share. The minimum variation of .01 described in (b) above is applicable to stocks that have been converted to decimal pricing. (Rule 11.3(c) will be eliminated upon completion of the decimal conversion.)]
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 self-regulatory organization 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 self-regulatory organization 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
The CSE proposes to eliminate references to fractional price variations in stocks traded on the Exchange. In implementing the conversion to decimal pricing, the Exchange added provisions to Rules 11.3(a) and (c) that called for the elimination of said rules upon completion of the decimal conversion process. With decimal pricing now fully implemented, the Exchange is now activating the previously approved clauses that eliminate 11.3(a) and (c). With regard to all equity securities, Rule 11.3 will reflect only decimal pricing upon approval of this proposed rule change.
2. Statutory Basis
The CSE believes that the proposed rule change is consistent with Section 6(b) of the Act in general and furthers the objectives of Section 6(b)(5) in particular. The CSE believes the proposed rule change is consistent with Section 6(b)(5) in that it is designed to promote just and equitable principles of trade and 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 CSE 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 comments were solicited or received in connection with 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
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. 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 at the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of the CSE. All submissions should refer to file No. SR-CSE-2002-02 and should be submitted by April 8, 2002.Start Signature
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Margaret H. McFarland,
3. See Securities Exchange Act Release No. 43408 (October 3, 2000), 65 FR 60708 (October 12, 2000)(order approving CSE Rules that accommodate the implementation of decimal pricing).Back to Citation
[FR Doc. 02-6455 Filed 3-15-02; 8:45 am]
BILLING CODE 8010-01-P