[Federal Register Volume 67, Number 62 (Monday, April 1, 2002)]
[Notices]
[Pages 15436-15438]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-7782]
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SECURITIES AND EXCHANGE COMMISSION
[Release No.34-45642; File No. SR-CSE-2002-03]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Cincinnati Stock Exchange,
Inc. Relating to Changes in Transaction Fees and Establishing a Pilot
Revenue Sharing Program for Trading in Nasdaq National Market
Securities
March 26, 2002.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on March 25, 2002, the
Cincinnati Stock Exchange, Incorporated (``CSE'' or ``Exchange'') filed
with the Securities and Exchange Commission
[[Page 15437]]
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the CSE. The
Commission is publishing this notice to solicit comment on the proposed
rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Exchange hereby proposes to amend the Exchange's schedule of
transaction fees and to establish a pilot revenue sharing program to
reflect recent developments in competitive business strategy. The text
of the proposed rule change is below. Additions are in italics, and
deletions are in brackets.
The Cincinnati Stock Exchange, Incorporated
* * * * *
Chapter XI
Trading Rules
Rule 11.10 National Securities Trading System Fees
A. Trading Fees (No Change to Text)
(e) (1) (No Change to Text)
(2) Tape ``C'' Transactions. Tape ``C'' Transactions are defined as
transactions conducted in Nasdaq securities pursuant to unlisted
trading privileges (``UTP''). Members will be charged a per share fee
for Nasdaq securities based upon the following schedule:
------------------------------------------------------------------------
Fee per
Number of shares traded (In a single day) share
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0-5 million................................................ $0.001
5 million one+............................................. 0.000025
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(1) [Tape ``C'' Transactions. Tape ``C'' Transactions are defined
as transactions conducted in Nasdaq securities pursuant to unlisted
trading privileges (``UTP''). Members will be charged $.001 per share
per side ($1.00/1000 shares), with a maximum charge of $37.50 per firm
per side, for Tape C Transactions.]
Tape ``C'' Transaction Credit. Members will receive a 75 percent
pro rata credit on revenue generated by transactions in Tape ``C''
securities.
[(l)] (m) (No Change in Text)
[(m)] (n) (No Change in Text)
[(n)] (o) (No change in Text)
[(o)] (p) (No change to text)
[(p)] (q) (No change to text)
* * * * *
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 CSE 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 CSE has prepared summaries, set forth in sections A,
B, and C below, of the most significant parts 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 is proposing two amendments to its Rules governing
transaction fees and market data revenue credits in keeping with recent
trends in the securities industry. The first amendment adds subsection
(2) to Rule 11.10(A)(e), (``Crosses and Meets''). Subsection (2)
establishes a fee schedule for transactions in The Nasdaq Stock Market,
Inc. (``Nasdaq'') National Market (``NNM'') securities.
The second change filed by the Exchange creates a pilot program as
an incentive to Members to trade NNM securities on the Exchange and
will be codified as Rule 11.10(A)(l) (Tape ``C'' Transaction Credit).
The Exchange believes the credit is a logical next step in its efforts
to provide competitive exchange services to members trading NNM
securities. Under the program,\2\ member firms will receive a 75
percent (75%) pro rata transaction credit on all Nasdaq Tape C market
data revenue generated by member trading activity. The pilot program
runs for 90 days and is set to expire June 28, 2002, if not renewed.
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\2\ Nasdaq securities will be traded on CSE pursuant to Section
12(f) of the Act, 15 U.S.C. 78l(f), as well as the Joint Self-
Regulatory Organization Plan Governing the Collection,
Consolidation, and Dissemination of Quotation and Transaction
Information for Nasdaq-Listed Securities Traded on Exchanges on an
Unlisted Trading Privilege Basis (``Nasdaq-UTP Plan'').
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2. Statutory Basis
The proposed rule change is generally consistent with section 6(b)
\3\ of the Act. The proposed rule change also furthers the objectives
of Section 6(b)(5),\4\ particularly, in that the proposed rule change
is designed to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, 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.
The proposal also is consistent with section 6(b)(4) \5\ in that it is
designed to provide for the equitable allocation of reasonable dues,
fees, and other charges among Exchange members by crediting members on
a pro rata basis.
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\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(5).
\5\ 15 U.S.C. 78f(b)(4).
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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 written 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
The foregoing rule change has become effective pursuant to section
19(b)(3)(A) \6\ of the Act and paragraph (e) of Rule 19b-4 \7\
thereunder. At any time within sixty days of the filing of such
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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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(e).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposal 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
[[Page 15438]]
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-CSE-2002-03 and should be
submitted by April 22, 2002.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-7782 Filed 3-29-02; 8:45 am]
BILLING CODE 8010-01-P