Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by Chicago Stock Exchange, Inc. Relating to the Odd-Lot Transactions

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-35048; File No. SR-CHX-94-23]

Self-Regulatory Organizations; Notice of Filing of Proposed Rule

Change by Chicago Stock Exchange, Inc. Relating to the Odd-Lot

Transactions

December 2, 1994.

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

1934 (``Act''), 15 U.S.C. Sec. 78s(b)(1), notice is hereby given that

on November 10, 1994, 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. 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 CHX proposes to amend Rule 9 of Article XXXI of the Exchange's

Rules as follows, with italics representing language to be added:

Article XXXI

Rule 9 * * *

(d) Notwithstanding anything in this Rule to the contrary, if so

determined by the Committee on Floor Procedure, a differential may be

charged for (i) an odd-lot ``seller's option'' trade (as that is

defined in Article XX, Rule 9(c)), (ii) an odd-lot order for cash or

``next day'' delivery, (iii) an odd-lot order for additional settlement

periods, and (iv) an odd-lot order in an issue in which a differential

is charged in the primary market.

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 statement 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 give the Committee on

Floor Procedure (``FPC'') flexibility with respect to the Exchange's

odd-lot execution rules. Currently the rule provides that all odd-lots

shall be executed at the best bid or offer, similar to round lot

executions. The new rule will allow the FPC to allow differentials to

be charged for non-regular way trades. For example, the new rule

permits the Committee on Floor Procedure to allow differentials to be

charged for odd-lot seller's option trades, ``next day'' delivery

trades and orders in issues for which a differential is charged in the

primary market.

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 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, N.W., Washington, D.C. 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. Sec. 552, will be available for inspection and copying at

the Commission's Public Reference Section, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such filing will also be available

for inspection and copying at the principal office at the CHX. All

submissions should refer to File No. SR-CHX-94-23 and should be

submitted by December 30, 1994.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-30259 Filed 12-8-94; 8:45 am]

BILLING CODE 8010-01-M