[Federal Register Volume 59, Number 82 (Friday, April 29, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10205]


[[Page Unknown]]

[Federal Register: April 29, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33954; File No. SR-Phlx-94-19]

 

Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. Amending its Schedule of Fees and Charges Relating to 
Charges on Stock Execution Machines.

April 21, 1994.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), 15 U.S.C. 78s(b)(1), notices hereby given that on March 29, 
1994, the Philadelphia Stock Exchange, Inc. (``Phlx'' 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. On April 21, 1994, the Phlx submitted to the Commission 
Amendment No. 1 to the proposal.\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 William W. Uchimoto, Vice President and 
General Counsel, Phlx, to Louis A. Randazzo, Attorney, SEC, dated 
April 21, 1994. Amendment No. 1 deleted text requiring member firms 
to clear trades through the Stock Clearing Corporation of 
Philadelphia in order to receive the discount.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Phlx is proposing to amend its Schedule of Fees and Charges 
respecting the charges of non-exchange sponsored stock execution 
equipment\2\ operated by Phlx members on the Phix floor. The proposed 
amendment would provide a 50 percent credit on the fees charged on each 
stock execution machine operated by any member firm for each 2,500 
trades such member executes on the PHlx in a non-specialist account.
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    \2\The Exchange stated that stock execution machines are 
terminals that route order flow to other market places. Currently, 
the only stock execution machines at the Phlx are Designated Order 
Turnaround machines (``DOT'') that route orders to the New York 
Stock Exchange (``NYSE'').
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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 if 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
    Since 1990, the Exchange has imposed a proprietary stock execution 
machine charge of $250.\3\ Effective for the Exchange's April 1994 
billing cycle, the Phix shall provide a monthly credit of 50 percent of 
the fees charged for each stock execution machine operated by a member 
per each 2,500 trades executed by such member of the Phlx. The credit 
shall not exceed 50 percent of the total stock execution machine 
billing charges per member operating such machine.
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    \3\See Securities Exchange Act Release No. 28212 (July 17, 
1990), 55 FR 30065 (July 24, 1990).
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    Accordingly, a member firm with three stock execution machines, 
executing 7,500 trades in a non-specialist account, would be entitled 
to a credit of $375.00. In this example, the charges for the stock 
execution machines would be $750 ($250 fee multiplied by the 3 
machines) minus the credit of $375 (\1/2\ [$250 fee] multiplied by 3 
machines. If, however, in the above example the member firm had 
operated only two stock execution machines, the credit given would be 
$250 because the credit per member would be capped at 50 percent of the 
member's total stock execution machine billing charges. Thus, in the 
latter case, the total charges would be $250, which equals the total 
fees ($500) minus the credit per each machine (2 multiplied by $125).
    The purpose of the proposed rule change is to amend the Phlx's 
current schedule of fees and charges and to also enhance the Exchange's 
equity floor as a highly attractive floor of execution for a member 
firm's business.
2. Statutory Basis
    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 other persons using 
its facilities.

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

    The Exchange does not believe that the proposed rule change will 
impose any inappropriate 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 either solicited or 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 
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 Room. Copies of the filing will also be 
available for inspection and copying at the principal office of the 
Phlx. All submissions should refer to File No. SR-Phlx-94-19 and should 
be submitted by May 20, 1994.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-10205 Filed 4-28-94; 8:45 am]
BILLING CODE 8010-01-M