[Federal Register Volume 61, Number 11 (Wednesday, January 17, 1996)]
[Notices]
[Pages 1200-1201]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-424]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36682; File No. SR-Phlx-95-89]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. Amending the PHLX's Schedule of Fees and Charges

January 4, 1996.
    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 December 
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 December 21, 1995, the Phlx submitted to the 
Commission Amendment No. 1 to the proposal,\1\ and on January 4, 1996 
the Phlx submitted Amendment No. 2 to the proposal.\2\ The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.

    \1\ See Letter from William W. Ochimoto, Vice President and 
General Counsel, Phlx, to Jon E. Kroeper, Attorney, SEC, dated 
December 21, 1995. Amendment No. 1 deleted text requiring member 
firms to clear trades through the Stock Clearing Corporation of 
Philadelphia in order to receive the credit provided by the proposed 
rule change.
    \2\ See Letter from Murray L. Ross, Vice President and 
Secretary, Phlx, to Jon E. Kroeper, Attorney, Sec, dated January 4, 
1996. Amendment No. 2 added a note describing the stock execution 
machine charge credit to the Phlx's Schedule of Fees and Charges.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange, pursuant to Rule 19b-4 under the Act, is proposing to 
amend the PHLX's Schedule of Fees and Charges respecting the charges 
for non-exchange sponsored stock execution machines \3\ operated by 
PHLX members on the PHLX equity floor. The proposed amendment would 
provide a $125 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 equity floor in a non-specialist account.

    \3\ Stock execution machines are terminals that route order flow 
to other marketplaces. Currently, the only stock execution machines 
at the Phlx are Designated Order Terminals that route orders to the 
New York Stock Exchange.
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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
    Since 1990, the Exchange has imposed a monthly proprietary stock 
execution machine charge of $250.00.\4\ Since April 1994, the PHLX has 
provided a monthly credit of 50% of the fees charged for each stock 
execution machine operated by a member per each 2,500 trades executed 
by such member on the PHLX.\5\ This credit has not been authorized to 
exceed 50% of the total stock execution machine billing charges per 
member operating such machine.

    \4\ See Securities Exchange Act Release No. 28212 (July 17, 
1990), 55 FR 30065 (July 24, 1990).
    \5\ See Securities Exchange Act Release No. 33954 (April 21, 
1994), 59 FR 22191 (April 29, 1994).
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    Effective for the January 1996 billing cycle, the proposed 
amendment would provide a $125 credit on the fees charged on each stock 
execution machine operated by any member firm for each 2,500 trades 
such member executed on the PHLX equity floor in a non-specialist 
account. The one material change to the existing credit is that credits 
may now be utilized by the member firm on an unrestricted basis to 
potentially offset its entire monthly equity floor stock execution 
machine charges.\6\

    \6\ The Exchange stated that the monthly credit provided to any 
member shall never exceed 100% of the total monthly stock execution 
machine charges imposed upon such member. Telephone conversation 
between Lydia Gavalis, Asst. General Counsel, Phlx, and Jon E. 
Kroeper, Attorney, SEC, on December 22, 1995.
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    The purpose of the proposed rule change is to amend the PHLX's 
current schedule of fees and charges and to further underscore 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 \7\ in that it provides for equitable allocation of reasonable 
dues, fees and other charges among its members and other persons using 
the facilities.

    \7\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The PHLX 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 by the Exchange and therefore has become effective 
pursuant to Section 19(b)(3)(A) of the Act \8\ and subparagraph (e) of 
Rule 19b-4 thereunder.\9\ 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.

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(e).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing. 

[[Page 1201]]
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 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 Exchange. All submissions should refer to File 
No. SR-Phlx-95-89 and should be submitted by February 7, 1996.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-424 Filed 1-16-96; 8:45 am]
BILLING CODE 8010-01-M