[Federal Register Volume 61, Number 213 (Friday, November 1, 1996)]
[Notices]
[Pages 56597-56598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28076]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37874; File No. SR-PSE-96-38]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Stock Exchange 
Relating to Transaction Fees

October 28, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on October 15, 1996, the 
Pacific Stock Exchange, Inc. (``PSE'' 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. 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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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The PSE hereby is proposing to adopt a new charge applicable to 
Lead Market Makers (``LMMs'') who participate in the Exchange's LMM 
Book Pilot Program.

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 PSE 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 PSE 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

    On March 29, 1996, the Exchange filed a proposal with the 
Commission to adopt a pilot program under which a limited number of 
LMMs would be able to assume operational responsibility for the options 
public limit order book (``Book'') in a limited number of issues 
(``Book Pilot Program'').\2\ The Commission approved the Book Pilot 
Program as a one year pilot program on October 11, 1996.\3\ Under the 
Book Pilot Program, the designated LMMs manage the Book function, take 
responsibility for trading disputes and errors, set rates for book 
execution, and pay the Exchange a fee for staffing and services. The 
Book Pilot Program has been implemented on a limited basis, and will 
involve no more than three LMMs and/or forty option symbols during the 
one year pilot phase. During the pilot phase, the Exchange is providing 
staffing to assist the LMM in the management of the Book function.
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    \2\ Securities Exchange Act Release No. 37335 (June 19, 1996), 
61 FR 33568.
    \3\ Securities Exchange Act Release No. 37810 (October 11, 
1996).
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    The Exchange is now proposing to amend its Schedule of Rates to 
establish a staffing charge to LMMs who participate in the Book Pilot 
Program. The proposed charge is $.50 per contract for each contract 
executed by the Book under the Book Pilot Program. LMMs would be 
subject to a minimum monthly charge of $200 and a maximum monthly 
charge of $16,000 for all issues in which the LMM is participating in 
the Book Pilot Program.
    The proposed charge is intended to cover the Exchange's cost of 
providing staff who will assist the LMM in operating the Book during 
the Book Pilot Program.
    The Exchange believes that the proposed rule change is consistent 
with Section 6 \4\ of the Act in general and with Section 6(b)(4) \5\ 
in particular in that it provides for the equitable allocation of 
reasonable charges among its members and persons using its facilities.
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is unnecessary or inappropriate 
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

    Written comments were neither solicited nor received with respect 
to the proposed rule change.

[[Page 56598]]

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.\6\ 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.
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    \6\ 15 U.S.C. 78s(b)(3)(A) and 17 CFR 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. 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-PSE-96-38 and should be 
submitted by November 22, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-28076 Filed 10-31-96; 8:45 am]
BILLING CODE 8010-01-M