Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, Inc., Regarding the Re-extension of the Waiver of Certain Exchange Transaction Fees for Transactions in Certain Tape B Eligible Issues

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-33637; File No. SR-CHX-94-4]

Self-Regulatory Organizations; Notice of Filing and Immediate

Effectiveness of Proposed Rule Change by the Chicago Stock Exchange,

Inc., Regarding the Re-extension of the Waiver of Certain Exchange

Transaction Fees for Transactions in Certain Tape B Eligible Issues

February 17, 1994.

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

(``Act''),\1\ notice is hereby given that on February 2, 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.

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\1\15 U.S.C. 78s(b)(1) (1988).

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

of the Proposed Rule Change

The CHX proposes to re-extend the waiver of certain transaction

fees, and not re-extend the waiver of certain other transaction fees,

as set out in Section (c) (Transaction Fee Schedule), of its Membership

Dues and Fees for transactions in Tape B eligible issues.\2\ The

Exchange proposes to extend the waiver of certain transaction fees for

Tape B eligible issues executed through the Midwest Automated Execution

System (``MAX''), but not extend the waiver for otherwise eligible

issues not executed through MAX. The Exchange had waived these fees

through December 31, 1993, on both MAX and non-MAX executed trades\3\

and now proposes to extend the waiver on MAX executed trades through

December 31, 1994.

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\2\The Consolidated Tape, operated by the Consolidated Tape

Association (``CTA''), compiles current last sale reports in certain

listed securities from all exchanges and market makers trading such

securities and disseminates these reports to vendors on a

consolidated basis. The CTA is comprised of the New York, American,

Boston, Cincinnati, Chicago, Pacific, and Philadelphia Stock

Exchanges, as well as the Chicago Board Options Exchange and the

National Association of Securities Dealers, Inc. Transactions in

American Stock Exchange listed stocks and qualifying regional listed

stocks are reported on CTA Tape B. Securities Exchange Act Release

No. 21583 (December 18, 1984), 50 FR 730 (January 7, 1985).

\3\See Securities Exchange Act Release No. 31636 (December 22,

1992), 57 FR 62406 (December 30, 1992) (approving File No. SR-MSE-

92-15). Previously, the Exchange waived these fees for the time

period of February 7, 1991 through December 31, 1991 in Securities

Exchange Act Release No. 28916 (February 25, 1991), 56 FR 9028

(March 4, 1991) (approving File No. SR-MSE-91-7). The Exchange also

waived these fees for the time period of August 31 through December

31, 1990. See Securities Exchange Act Release No. 28402 (August 31,

1990), 55 FR 37389 (September 11, 1990) (approving File No. SR-MSE-

90-14). The Commission did not receive any comments in connection

with these filings.

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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 Section (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

The purpose of the proposed rule change is to continue the

Exchange's efforts to attract additional order flow in Tape B eligible

securities in order to enhance the Exchange's competitive position in

these issues. Limiting the waiver of fees to MAX trades recognizes the

economies of scale and cost savings achieved through electronic order

routing versus manually processed trades.

The proposed rule change is consistent with section 6(b)(4) of the

Act in that it provides for the equitable allocation of reasonable

dues, fees, and other charges among its members and issuers and the

persons using its facilities.

(B) Self-Regulatory Organization's Statement on Burden on Competition

The Exchange believes that no burden will be placed on competition

as a result of the proposed rule change.

(C) Self-Regulatory Organization's Statement on Comments on the

Proposed Rule Change Received From Members, Participants or Others

Comments were neither solicited nor received.

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

Commission Action

The foregoing rule change establishes or changes a due, fee, or

other charge imposed by the Exchange and therefore has become effective

pursuant to section 19(b)(3)(A) of the Act and subparagraph (e) of Rule

19b-4 thereunder. At any time within 60 days of the filing of such 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.

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 submissions, 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 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-94-4 and should be

submitted by March 18, 1994.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-4336 Filed 2-24-94; 8:45 am]

BILLING CODE 8010-01-M