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Notice

Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change Relating to Participant Fees and Credits

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Information about this document as published in the Federal Register.

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Start Preamble August 3, 2005.

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 17, 2005, 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 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 CHX, pursuant under Rule 19b-4 of the Act, proposes to amend its Participant Fee Schedule (“Fee Schedule”) to eliminate, retroactive to January 1, 2005, the assignment fee for listed securities that are not assigned in competition.

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 Exchange proposes to modify its Fee Schedule to eliminate, retroactive to January 1, 2005, the assignment fee for listed securities that were not assigned in competition. Under the Fee Schedule that was in effect from January 1, 2005 through May 2, 2005, the Exchange charged a fee to a specialist that received the assignment of a listed security when other firms were not competing for the assignment.[3] To encourage firms to trade additional listed securities by reducing their costs of doing so, the Exchange eliminated the assignment fee for securities assigned without competition on an on-going basis, effective May 2, 2005.[4] The Exchange now seeks to confirm that the fee should be eliminated for all periods in 2005, thus consistently assessing assignment fees for listed securities assigned without competition throughout the year and avoiding any confusion, among the Exchange's participants, of the assignment fees that should have been charged.[5] The Exchange believes that this fee change is an appropriate and fair allocation of fees among its participants because of its ability to reduce confusion and enhance the consistency of the fees that participants are charged.

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 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 on 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

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 the 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. Comments may be submitted by any of the following methods:

Electronic Comments

Paper Comments

  • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303.

All submissions should refer to File Number SR-CHX-2005-20. 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 (http://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 inspection and copying in the Commission's Public Reference Room. Copies of the 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-2005-20 and should be submitted on or before August 30, 2005.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.7

Jill M. Peterson,

Assistant Secretary.

End Signature End Preamble

Footnotes

3.  The Exchange also has charged, and will continue to charge, specialist assignment fees with respect to securities that are assigned to a specialist firm in competition with other firms, reflecting the increased administrative costs associated with allocating stocks in competition.

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4.  See Securities Exchange Act Release No. 51763 (May 31, 2005), 70 FR 33230 (June 7, 2005). The Exchange previously had waived this fee on a temporary basis, through the end of 2004. See Securities Exchange Act Release No. 50657 (November 12, 2004), 69 FR 67615 (November 18, 2004).

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5.  This change is consistent with the Exchange's decision not to charge assignment fees charged with respect to Nasdaq/NM securities that are not assigned in competition. See Securities Exchange Act Release No. 50616 (November 1, 2004), 69 FR 64608 (November 5, 2004).

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[FR Doc. E5-4275 Filed 8-8-05; 8:45 am]

BILLING CODE 8010-01-P