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Notice

Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by the Chicago Stock Exchange, Inc. To Amend Its Membership Dues and Fees Schedule To Confirm the Amount of Consolidated Tape Association Credits Available to Its Members

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Start Preamble April 15, 2003.

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 March 31, 2003, 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, II, and III below, which Items have been prepared by the Exchange. The Exchange filed the proposal pursuant to Section 19(b)(3)(A) of the Act,[3] and Rule 19b-4(f)(2) thereunder,[4] which renders the proposal effective upon filing with the Commission. The Exchange amended the proposal on April 14, 2003.[5] The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, 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 (“Schedule”) to confirm the amount of Consolidated Tape Association (“CTA”) credits available to members. The text of the proposed rule change is available upon request from the Office of the Secretary, the Commission, and the Exchange.

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 purpose of the proposed change to the Schedule is to clarify the amount of CTA credits available to CHX member firms. The Exchange, like other national Start Printed Page 19875securities exchanges, receives CTA revenue from transactions in listed securities under the terms of the CTA Plan (“Plan”). In past years, the Securities Industry Automation Corporation (“SIAC”), which administers the collection and distribution of market data under the Plan, and the Plan Administrators, which administer, among other things, the accompanying revenue distribution to Plan participants, worked together so that all of the Plan costs were deducted from the total tape revenue pool, with each Plan participant then receiving the remaining portion of the revenues allocable to that participant. These methods are now changing and, beginning in 2003, the Plan Administrators will divide up the total revenue pool according to the Plan's terms and distribute the allocable revenues to each participant (less the Administrators' costs), and SIAC will then bill each participant for its portion of the SIAC costs.

The Exchange proposes to amend to its Schedule to ensure that the change in Plan billing methods does not have an inadvertent impact on the current method for providing tape-based credits to the Exchange's specialists, floor brokers and lead market makers. The Exchange's Schedule currently provides, for example, that the credits available to specialists are based on the “applicable percentage of CHX tape revenue from the Consolidated Tape Association generated by a particular stock.” The Exchange proposes to amend this text—and the text describing the Exchange's other tape credit programs—that confirms that the revenues shared with Exchange members are those calculated after the deduction of Plan costs.

2. Statutory Basis

The Exchange believes that 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

The Exchange has not solicited or received any written comments on this proposal.

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

The foregoing rule change establishes or changes a due, fee, or charge imposed by the Exchange and, therefore, has become effective upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act [7] and Rule 19b-4(f)(2) thereunder.[8] 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 purpose 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, as amended, 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 Exchange. All submissions should refer to File No. SR-CHX-2003-10 and should be submitted by May 13, 2003.

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

5.  See letter from Ellen J. Neely, Senior Vice President and General Counsel, CHX, to Joseph P. Morra, Special Counsel, Division of Market Regulation, Commission, dated April 10, 2003 (“Amendment No. 1”). In Amendment No. 1, the Exchange submitted a revised Exhibit A, which replaced in its entirety, the Exhibit A submitted with the initial filing. Specifically, in the revised Exhibit A, the Exchange made technical corrections to the proposed rule text contained in the Exhibit A submitted with the initial filing. For purposes of calculating the 60-day abrogation period, the Commission considers the period to have commenced on April 14, 2003, the date the Exchange filed Amendment No. 1. 15 U.S.C. 78s(b)(3)(C).

Back to Citation

7.  15 U.S.C. 78s(b)(3)(A)(ii).

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[FR Doc. 03-9884 Filed 4-21-03; 8:45 am]

BILLING CODE 8010-01-P