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 July 2, 2001, 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.
17 CFR 240.19b-4.
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange proposes to delete CHX Article XXA, which governed an after-hours trading session (the “E-Session”) conducted by the Exchange, and to eliminate other rule references to the E-Session. The Exchange intends to cease conducting the E-Session following the Commission's approval of this proposed rule change. The text of the proposed rule change is available at the Commission and at the CHX.
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
On February 7, 2000, the Commission approved the CHX's proposed rule change granting access to and governing the E-Session. Following continuous operation for the E-Session for the past year, the E-Session has not sustained the increases in order flow that the CHX anticipated. Consequently, in light of the costs attendant to operation of an after-hours trading session by a self-regulatory organization, the Exchange has determined that it is not feasible at this time to continue conducting the E-Session. The Exchange has discussed its intention to eliminate the E-Session with its principal E-Session order-sending firms, and is confident that each of these order-sending firms has sufficient alternative liquidity sources in the after-hours market. Accordingly, upon the Commission's approval of this proposed rule change, which proposal would delete from the CHX rules all references to the E-Session, the CHX intends to cease conducting the E-Session.
See Securities Exchange Act Release No. 42403 (February 7, 2000), 65 FR 7581 (February 15, 2000)(SR-CX-99-08). See also Securities Exchange Act Release No. 42004 (October 13, 1999), 64 FR 56548 (October 20, 1999) (SR-CHX-99-16).
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange. In particular, the Exchange believe the proposed rule change is consistent with sections 6(b) of the Act. In particular, the CHX believes the proposal is consistent with the section 6(b)(5) of the Act, 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.
15 U.S.C. 78f(b)(5).
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 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 CHX 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 disproved.
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 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 CHX. All submissions should refer to File No. SR-CHX-2001-14 and should be submitted by August 6, 2001.
For the Commission, by the division of Market Regulation, pursuant to delegated authority.6
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-17711 Filed 7-13-01; 8:45 am]
BILLING CODE 8010-01-M