[Federal Register Volume 62, Number 206 (Friday, October 24, 1997)]
[Notices]
[Pages 55445-55447]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-28180]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39257; File No. SR-CHX-97-27]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange,
Inc. Relating to the Execution of Stopped Orders Under the Enhanced
SuperMAX Program
October 17, 1997.
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 October 15, 1997, the Chicago Stock Exchange, Incorporated (``CHX''
or ``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the self-
regulatory organization. The
[[Page 55446]]
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its Rule 37(e) of Article XX
relating to the execution of stopped orders under the CHX's Enhanced
SuperMAX program. The text of the proposed rule change is available at
the Office of the Secretary, the CHX, and at 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 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
1. Purpose
On May 22, 1995, the Commission approved a proposed rule change
that allows specialists on the Exchange, through the Exchange's MAX
system, to provide order execution guarantees that are more favorable
than those required under CHX Rule 37(a), Article XX.\3\ That approval
order contemplated that the CHX would file with the Commission specific
modifications to the parameters of MAX that are required to implement
various options available under the rule.\4\
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\3\ See Securities Exchange Act Release No. 35753 (May 22,
1995), 60 FR 28007 (May 26, 1995) (order approving File No. SR-CHX-
95-08).
\4\ Id.
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On September 16, 1997, the CHX proposed changes to the Enhanced
SuperMAX program.\5\ For technological reasons, the CHX has decided not
to implement those changes at this time. Instead, the CHX will continue
to operate the Enhanced SuperMAX program, as that program existed prior
to the September 1997 proposed changes.
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\5\ See Securities Exchange Act Release No. 39162 (September 30,
1997), 62 FR 52367 (October 7, 1997) (File No. SR-CHX-97-23).
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As a result, as is currently the case, under the Enhanced SuperMAX
program, certain orders will be ``stopped'' at the ITS BBO (as that
term is defined in Article XX, Rule 37 of the CHX rules) and will be
executed with reference to the next primary market sale. The Enhanced
SuperMAX program will continue to include a time-out feature whereby if
there are no executions in the primary market after the order has been
stopped for a designated time period, the order will be executed at the
stopped price at the end of such period. Such period, known as a time-
out period, will continue to: (1) Be pre-selected by a specialist on a
stock-by-stock basis based on the size of the order; (2) be able to be
changed by a specialist no more frequently than once a month; and (3)
last no less than 30 seconds.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b)(5) of the Act \6\ in that it is designed to promote just
and equitable principles of trade, to remove impediments and to perfect
the mechanism of a free and open market and a national market system,
and, in general, to protect investors and the public interest.
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\6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose a 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.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Commission finds that the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \7\ and Rule 19b-
4(e)(6) \8\ thereunder because it: (1) Does not significantly affect
the protection of investors or the public interest; (2) does not impose
any significant burden on competition; and (3) was provided by the
Exchange to the Commission with written notice of its intent to file
the proposed rule change at least five days prior to the filing date. A
proposed rule change filed under Rule 19b-4(e) does not become
operative prior to thirty days after the date of filing or such shorter
time as the Commission may designate if such action is consistent with
the protection of investors and the public interest. 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.
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\7\ 15 U.S.C. 78s(b)(30)(A).
\8\ 17 CFR 240.19b-4(e)(6).
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The Commission finds good cause to accelerate the thirty day period
for the proposed rule change to become operative prior to the thirtieth
day after the date of the filing, October 15, 1997. The Commission
notes that due to technological obstacles, the Exchange currently is
unable to implement the changes to its Enhanced SuperMAX program
envisioned in its September filing, which became effective upon filing.
The Commission further notes that acceleration will allow the Exchange
to continue to enforce its rules relating to the treatment of stopped
orders under the Enhanced SuperMAX program, as such rules existed prior
to the September filing. For the foregoing reasons, the proposed rule
change will become operative immediately.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing. Persons making written submission
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington DC 20549. Copies
of the submissions, 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 U.S.C. 552, will be available for inspection and copying in the
Commission's Public Reference Room, 450 Fifth Street, NW., Washington,
DC 20549. Copies of such filing also will be available for inspection
and copying at the principal office of the CHX. All submissions should
refer to file number SR-CHX-97-27 and should be submitted by November
14, 1997.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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[[Page 55447]]
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-28180 Filed 10-23-97; 8:45 am]
BILLING CODE 8010-10-M