[Federal Register Volume 60, Number 25 (Tuesday, February 7, 1995)]
[Notices]
[Pages 7254-7255]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2905]



[[Page 7254]]

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-35302; File No. SR-Phlx-94-77]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by Philadelphia Stock Exchange, Inc. Relating to the Imposition 
of an Approved Lessor's Initiation Fee and a Requirement That Approved 
Lessors Pledge to Abide by the By-Laws and Rules

January 31, 1995.
    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 January 
11, 1995, the Philadelphia Stock Exchange, Inc. (``Phlx'' 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. On January 26, 1995, the Exchange submitted to the 
Commission Amendment No. 1 to the proposed rule change, which is also 
described below.\1\ The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.

    \1\See letter from Murray L. Ross, Secretary, Phlx, to Sharon 
Lawson, Assistant Director, SEC, dated January 26, 1995. Amendment 
No. 1 proposes to amend the Schedule of Fees and Charges to reflect 
the imposition of an approved lessor's initiation fee.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its By-Laws, Article XII, Section 
12-8 by adding a new paragraph (e), which would impose an approved 
lessor's initiation fee of $1,500.00 and a requirement that approved 
lessors pledge to abide by the Phlx By-Laws and Rules. The text of the 
proposed rule change is as follows [new text is italicized; deleted 
text is bracketed]:

By-Laws Article XII, Section 12-8(e)

    An initiation fee of one thousand five hundred dollars shall be 
paid to the Corporation by a person or entity upon registration as an 
approved lessor. Additionally, no registration as an approved lessor 
shall become effective or entitle such person or entity to the 
privileges thereof, until such person or a designated representative of 
such entity has pledged to abide by the By-Laws as they have or shall 
from time to time amended, and by all rules and regulations adopted 
pursuant to the By-Laws.
    The Exchange also submits a proposed rule change amending the 
Schedule of Fees and Charges to conform to the change in the By-Laws 
with respect to the initiation fee. The text of the proposed rule 
change is as follows [new text is italicized; deleted text is 
bracketed]:
    Initiation Fee:
    The Phlx requires an initiation fee of $1,500 to be paid by a new 
member, [or] participant or an approved lessor. A lapse in membership 
or participation for six months or more will necessitate the payment of 
the initiation fee subsequent to reapplication.\2\

    \2\Appendix A of the Schedule of Fees and Charges has also been 
amended to indicate that the initiation fee will be imposed on 
``Members, Participants and Approved Lessors.''
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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 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 proposed amendment to Article XII, Section 12-8 of the 
Exchange's By-Laws would add a new paragraph (e) imposing an approved 
lessor's\3\ initiation fee of $1,500.00 and a requirement that approved 
lessors pledge to abide by the By-Laws and Rules of the Exchange. The 
Exchange is also amending the Schedule of Fees and Charges to conform 
to the change in the By-Laws with respect to the initiation fee. The 
Exchange will require that an approved lessor pay the initiation fee 
upon registration.

    \3\The term ``approved lessor'' means a lessor approved by the 
Exchange under its By-Laws and Rules. See Philadelphia Stock 
Exchange Guide, By-Laws, Article I, Section 1-1(h), (CCH) 1001. A 
``lessor'' is a holder of equitable title to a membership in the 
Exchange, including a former member of the Exchange, who has leased 
legal title to his membership to a lessee and has retained equitable 
title to such membership, See Philadelphia Stock Exchange Guide, By-
Laws, Article I, Section 1-1(f), (CCH) 1001.
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    The Board of Governors undertook the amendment to the By-Laws to 
codify the practice of having approved lessors pledge to abide by the 
By-Laws and Rules of the Exchange.\4\ The proposed fee amendments to 
the By-Laws and the Schedule of Fees and Charges are intended to 
equalize the treatment of new purchasers of equitable title to Phlx 
memberships and foreign currency options participations.\5\

    \4\The By-Laws already impose this requirement on members. See 
Philadelphia Stock Exchange Guide, By-Laws, Article XII, Section 12-
9, (CCH) 1284.
    \5\The Exchange does not require members who lease their 
memberships to a lessee to register as ``approved lessors.'' 
Accordingly, the proposed rule change would not impose an additional 
initiation fee on such members. Conversation with Murray L. Ross, 
Secretary, Phlx, and Jennifer Choi, Attorney, SEC, dated January 19, 
1995.
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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 amongst 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

    With respect to the proposed By-Laws change, the Exchange solicited 
comments from its memberships by Circular 94-109, dated July 21, 1994. 
After receiving no written comments on this matter, the Exchange's 
Board of Governors approved the amendment to the By-Laws for submission 
to the Commission.
    No written comments were solicited or received with respect to the 
fee change in the Schedule of Fees and Charges.

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. [[Page 7255]] 

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. 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 of the Exchange. All 
submissions should refer to File No. SR-Phlx-94-77 and should be 
submitted by February 28, 1995.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-2905 Filed 2-6-95; 8:45 am]
BILLING CODE 8010-01-M