Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Chicago Stock Exchange, Incorporated Relating to the Posting of Sales and Transfers of Memberships

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-36911; File No. SR-CHX-96-07]

Self-Regulatory Organizations; Notice of Filing and Immediate

Effectiveness of Proposed Rule Change by the Chicago Stock Exchange,

Incorporated Relating to the Posting of Sales and Transfers of

Memberships

February 29, 1996.

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

(``Act''),\1\ notice is hereby given that on February 7, 1996, the

Chicago Stock Exchange, Incorporated (``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).

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[[Page 9216]]

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

of the Proposed Rule Change

The Exchange proposes to amend Rule 5(c), Rule 12, Rule 13 and

interpretation and policy .01 of Rule 10 of Article I of the Exchange's

Rules, all of which relate, directly or indirectly, to the time period

of posting proposed sales or transfers of memberships. The Exchange

also proposes to amend Rule 6 of Article I. Among other matters, Rule 6

provides a period during which an applicant for membership may file a

written response to an objection to such applicant's election to

membership.

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

Currently, before an application for membership on the Exchange is

approved, Rule 5(c) of Article I of the Exchange's Rules requires that

the name of the applicant, the name of the member or member

organization from which the membership is to be transferred and the

sponsor's names must be posted on the bulletin board on the Floor of

the Exchange for fifteen days and notice of posting mailed to all

members. This fifteen day notice period, however, sometimes expires on

a Saturday or Sunday. The purpose of the proposed rule change is to

change this posting requirement to ten business days to ensure that the

notice period expires on a day when the Exchange is open for business.

Conforming changes are also being made to interpretation and policy .01

of Rule 10, and Rules 12 and 13.\2\

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\2\ Interpretation and policy .01 of Rule 10 provides that all

contracts for the sale of a membership must remain in force during

the fifteen day posting period. Rule 12 generally prohibits a

transferring member or member organization from entering into any

contract on the Exchange for settlement after the fifteen day

posting period. Rule 13 generally requires all open Exchange

contracts of a transferring member or member organization to mature

on the full business day preceding the expiration of the fifteen day

posting period. The proposed rule change would change the operative

period in each of the above rules from fifteen days to ten business

days.

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Similarly, Rule 6 of Article I currently provides that during the

posting period any member may file an objection to the election of the

applicant to membership, that the applicant shall be sent a statement

of reasons for such objection, and may file a written response within

fifteen days of the receipt thereof. The proposed rule change would

change the response period to ten business days.

2. Statutory Basis

The proposed rule change is consistent with Section 6(b) of the Act

\3\ in general and furthers the objectives of Section 6(b)(5) \4\ 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.

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\3\ 15 U.S.C. 78f(b).

\4\ 15 U.S.C. 78f(b)(5).

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

The proposed rule change does not impose any burden on competition

that is not necessary or appropriate in furtherance of the purposes of

the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed

Rule Change Received From Members, Participants, or Others

The Exchange has neither solicited nor received written comments on

the proposed rule change.

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

Commission Action

Because the foregoing proposed rule change: (1) does not

significantly affect the protection of investors or the public

interest; (2) does not impose any significant burden on competition;

(3) does not become operative for 30 days from February 7, 1996, the

date on which it was filed, and the Exchange provided the Commission

with written notice of its intent to file the proposed rule change at

least five business days prior to the filing date, it has become

effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-

4(e)(6) thereunder.\5\

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\5\ 17 CFR 240.19b-4(e)(6) (1994).

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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.

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 also will be available for

inspection and copying at the principal office of The Chicago Stock

Exchange, Incorporated. All submissions should refer to File No. SR-

CHX-96-07 and should be submitted by March 28, 1996.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.\6\

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\6\ 17 CFR 200.30-3(a)(12).

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Jonathan G. Katz,

Secretary.

[FR Doc. 96-5303 Filed 3-6-96; 8:45 am]

BILLING CODE 8010-01-M