Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by Chicago Stock Exchange, Inc. Relating to Changes in the Chicago Basket

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-34462; File No. SR-CHX-94-18]

Self-Regulatory Organizations; Notice of Filing of Proposed Rule

Change by Chicago Stock Exchange, Inc. Relating to Changes in the

Chicago Basket

July 28, 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 July 22,

1994, the Chicago Stock Exchange, Inc. (``CHX'' or ``Exchange'') filed

with the Securities and Exchange Commission (``Commission'' or ``SEC'')

the proposed rule change as described in Items I, II and III below,

which Items have been prepared by the self-regulatory organization. The

Commission is publishing this notice to solicit comments on the

proposed rule change from interested persons.

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

of the Proposed Rule Change

The Exchange submits the following proposed rule change to amend

the first paragraph of Interpretation and Policy .01 of Rule 3 of

Article XXXVI. The remainder of Interpretation and Policy .01 would

remain unchanged. Specifically, the changed language is as follows:

Additions are italicized; deletions [bracketed]

.01 The Chicago Basket (CXM)

The Exchange will trade a basket of stocks based upon the Chicago

Mercantile Exchange's stock index XMI futures contract (the ``Merc

Futures Contract''). The CXM will consist of the stocks included in the

Merc Futures Contract in a fixed quantity of [25] 5 shares of each of

the stocks included in the futures contract.

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 change is to reduce the size of the

Chicago Basket (``CXM'') from 25 shares of each component stock to 5

shares of each component stock, in order to permit more entities and

persons to be able to trade the CXM basket. The rules that permit the

CXM basket to be traded on the Exchange were submitted for Commission

approval and were approved on October 15, 1993.\1\

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\1\See Securities Exchange Act Release No. 33053 (October 15,

1993), 58 FR 54610 (October 22, 1993) (File No. SR-CHX-93-18).

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The CXM basket would not be comprised of a new fixed quantity of

shares (5 instead of 25) of each of the stocks included in a futures

contract traded on the Chicago Mercantile Exchange. This XMI futures

contract is based on the American Stock Exchange's Major Market Index

(``MMI''). The MMI is a broad-based, price-weighted index currently

based on 20 stocks listed on the New York Stock Exchange.

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 to 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 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 written comments were solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for

Commission Action

Within 35 days of the publication of this notice in the Federal

Register or within such other 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 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 Section, 450 Fifth Street, NW.,

Washington, DC 20549. 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-94-18 and should be

submitted by August 25, 1994.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-18961 Filed 8-3-94; 8:45 am]

BILLING CODE 8010-01-M