Self-Regulatory Organizations; Filing of Proposed Rule Change by the Chicago Stock Exchange, Inc. (``CHX'') Relating to the Filing of Form U-5

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-33499; File No. SR-CHX-93-33]

Self-Regulatory Organizations; Filing of Proposed Rule Change by

the Chicago Stock Exchange, Inc. (``CHX'') Relating to the Filing of

Form U-5

January 21, 1994.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on December

23, 1993, 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 self-regulatory organization. On

January 21, 1994, the Exchange submitted to the Commission Amendment

No. 1 to the proposed rule change.\1\ The Commission is publishing this

notice to solicit comments on the proposed rule change from interested

persons.

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\1\See letter from David T. Rusoff, Attorney, Foley & Lardner,

to Louis A. Randazzo, Attorney, Branch of Exchange Regulation,

Commission, dated January 21, 1994. Amendment No. 1 made certain

clarifying amendments to the proposal.

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I. Self-Regulatory Organization's Statement of the Terms of Substance

of the Proposed Rule Change

The Exchange proposes to add interpretation and policy .03 to Rule

3, Article VI of the Exchange's rules and relates to the filing of a

Uniform Termination Notice for Securities Industry Registration (``Form

U-5'').\2\

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\2\The Form U-5 is employed in connection with the National

Association of Securities Dealers, Inc. (``NASD'') Central

Registration Depository (``CRD'') system and is used by the various

securities self-regulatory organizations (``SROs'') as part of their

registration and oversight of member organization personnel. Form U-

5 contains information relating to the circumstances surrounding the

termination of an applicant's prior employment.

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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

The purpose of the proposed rule change is to require certain

members of the Exchange to file Form U-5 termination notices with the

Exchange.\3\ The Form U-5 is used by a broker-dealer to give official

notice that it has terminated a registered employee. Requiring the

filing of the Form U-5 with the Exchange is consistent with the rules

of other SROs and will allow the Exchange to more precisely monitor the

authority of registered persons to act on behalf of member firms and

monitor the reasons for termination.\4\

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\3\Proposed Interpretation and Policy .03 to Rule 3 of Article

VI would apply to member organizations for which the Exchange is the

Designated Examining Authority (``DEA'') and to registered persons

of any other member organization (for whom the CHX is not the DEA)

that are active on the CHX trading floor.

\4\Proposed Interpretation and Policy .03 to Rule 3 of Article

VI states that following the termination of a person associated with

a member in a registered capacity, such member shall promptly, but

in no event later than thirty (30) calendar days after such

termination, give written notice of such termination to the Exchange

on Form U-5, and concurrently provide a copy of such notice to the

person whose association has been terminated. This requirement shall

only apply to member organizations for which the Exchange is the DEA

and to registered persons of other member organizations active on

the CHX trading floor.

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2. Statutory Basis

The proposed rule change is consistent with 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.

B. Self-Regulatory Organization's Statement on Burden on Competition

The Exchange does not believe that the proposed rule will impose

any 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

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 published its reasons for so finding or (ii) as to

which the self-regulatory organization 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. Persons making written submissions

should file six copies thereof with the Secretary, Securities and

Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.

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 at the

Commission's Public Reference Room, 450 Fifth Street, NW., Washington,

DC 20549. Copies of the 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-93-33 and should be submitted by February 18,

1994.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-1811 Filed 1-27-94; 8:45 am]

BILLING CODE 8010-01-M