Self-Regulatory Organizations; Proposed Rule Changes: Chicago Stock Exchange, Inc.
Federal Register: September 8, 2009 (Volume 74, Number 172)
Notices
Page 46277-46278
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DOCID:fr08se09-144
SECURITIES AND EXCHANGE COMMISSION
Release No. 34-60605; File No. SR-CHX-2009-13
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Adding Additional Trading Sessions
September 1, 2009.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that, on August 28, 2009, Chicago Stock Exchange, Inc. (``CHX'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the CHX. The
Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
CHX proposes to amend its rules to create an early trading session beginning at 6 a.m. CT on days the Exchange is open for trading and to create a second Late Trading Session from 3 p.m. to 3:15 p.m. CT. The text of this proposed rule change is available on the Exchange's Web site at (http://www.chx.com) and in the Commission's Public Reference
Room.
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Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the CHX 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 those statements may be examined at the places specified in
Item IV below. The CHX has prepared summaries, set forth in sections A,
B, and C below, of the most significant parts of such statements.
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Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change 1. Purpose
The Exchange is proposing to create an early trading session beginning at 6 a.m. CT on days the Exchange is open for trading and to create a second Late Trading Session from 3 p.m. to 3:15 p.m. CT. We believe that CHX Participants may be interested in posting bids and offers on the CHX in an early trading session, as well as in a late session immediately after the close of the Regular Session. In order to facilitate additional trading activity, the Exchange proposes to create an early trading session and a second late trading session, both of which would operate under the same basic operational and regulatory framework as the Regular Trading Session. CHX Participants could enter orders to buy and sell eligible securities and those orders would either be executed or displayed (or entered without being displayed in the case of a reserve or undisplayed order) depending on the status of our book and the national market system. The rules applicable to the
Regular Trading Session would govern the Early and Late Trading
Sessions, with the exception that the Regulation NMS prohibitions regarding intermarket trade-throughs and locked and crossed markets would not be in force. The current Late Trading Session (which would be renamed the ``Late Crossing Session'') would be available from 3:15 p.m. to 4 p.m. CT and would be available only to Participants seeking to execute cross orders.
In furtherance of this initiative, the Exchange proposes to add or amend the a [sic] number of applicable CHX rules. Definitions setting the times of the respective trading sessions would be added to Article 1. Due to the risk of illiquidity, the Exchange does not believe that it is appropriate to execute IOC Market Orders during any of the
Extended Hours trading sessions and we propose to restrict use of that order type to the Regular Trading Session. We propose to add a new rule to the Article 8 business conduct rules mandating that Participants which allow customers to trade in extended hours trading sessions to make certain specific risk disclosures relating to such activity. These risk disclosures are modeled on the rules of the BATS Exchange, Inc. regarding extended hours trading.\3\ The provisions of Article 20, Rule 1 setting the time of the various trading sessions would be amended to make reference to the Early, Late Trading and Late Crossing sessions and define how trading operates during those sessions. The language in
Rule 1 referring to the hours of trading for specified exchange-traded funds would be deleted since those securities would be eligible for trading during the Early and Late Trading session, rendering the current text unnecessary. Finally, we would amend Article 20, Rule 8 to reflect the manner in which the various sessions are opened and closed.
\3\ BATS Exchange Rule 3.21, Customer Disclosures.
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Statutory Basis
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act in general,\4\ and furthers the objectives of Section 6(b)(5) in particular,\5\ in that it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transaction in securities, to remove impediments and perfect the mechanisms of a free and open market, and, in general, to protect investors and the public interest. In this case, the expansion of trading hours through the creation of an Early Trading Session and an additional Late Trading
Session would provide participants with
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additional options in seeking trade executions on our trading facilities.
\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
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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.
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Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
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.
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Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change: (i) Does not significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; and (iii) by its terms, does not become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, it has become effective pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-4(f)(6) thereunder.\7\
\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires the self-regulatory organization to submit to the
Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the
Commission. The Exchange has satisfied this requirement.
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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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
Use the Commission's Internet comment form (http:// www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-CHX-2009-13 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-CHX-2009-13. 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 on official business days between the hours of 10 a.m. and 3 p.m. Copies of such 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- 2009-13 and should be submitted on or before September 29, 2009.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\8\
\8\ 17 CFR 200.30-3(a)(12).
Florence E. Harmon,
Deputy Secretary.
FR Doc. E9-21639 Filed 9-4-09; 8:45 am
BILLING CODE 8010-01-P
