[Federal Register Volume 62, Number 180 (Wednesday, September 17, 1997)]
[Notices]
[Pages 48914-48916]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-24590]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39044; File No. SR-Phlx-97-41]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. Relating to Registration Fees for Registered 
Representatives

September 10, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\, notice is hereby given that on August 25, 1997, 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 Phlx. 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. Sec. 78s(b)(1) (1994).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Phlx seeks to amend its fee schedule pertaining to registration 
for Registered Representatives (``RR''). Below is the text of the 
proposed rule change. Additions are italicized; deletions are in 
brackets.
* * * * *

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                                                                        Phlx fee structure                      
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Membership Dues or Foreign Currency User Fees*..  $1000.00 semi-annually.                                       
Application Fee.................................  200.00.                                                       
Initiation Fee--Members, Participants and         1500.00.                                                      
 Approved Lessors.                                                                                              
Transfer Fee....................................  500.00.                                                       
Trading Post/Booth..............................  375.00 quarterly.                                             
Floor Facility Fees.............................  187.50 quarterly.                                             
Direct Wire to Floor............................  60.00 quarterly.                                              
Telephone System Line Extensions................  22.50 monthly/per extension.                                  
Execution Services/Communication Charge.........  200.00 monthly.                                               
Stock Execution Machine Registration Fee (Equity  300.00 per unit.                                              
 Floor).                                                                                                        
Equity, Option or FCO Transmission Charge.......  750.00 monthly.                                               
FCO pricing tape................................  600.00.                                                       
Option Report Service:                                                                                          
    New York....................................  600.00.                                                       
    Chicago.....................................  800.00.                                                       
Examinations Fee**..............................  1000.00 monthly.                                              
Technology Fee..................................  100.00 monthly.                                               
Registered Representative Registration:                                                                         
    Initial.....................................  12.00 [$10.00].                                               
    Maintenance.................................  12.00 annual [$10.00 annual].                                 
    Transfer....................................  12.00 [$10.00].                                               
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*An exemption from foreign currency user fees is extended to PHLX members also holding title to a foreign       
  currency options participation.                                                                               

[[Page 48915]]

                                                                                                                
**This fee is applicable to member/participant organizations for which the PHLX is the DEA. The following       
  organizations are exempt: (1) inactive organizations; (2) organizations operating from the PHLX trading floor 
  which have demonstrated that at least 25% of their income as reflected on the most recently submitted FOCUS   
  Report was derived from floor activities; (3) organizations for any month where they incur transaction or     
  clearance fee charges directly by the Exchange or by its registered subsidiary, provided that the fees exceed 
  the examinations fee for that month; and (4) organizations affiliated with an organization exempt from this   
  fee due to the second or third category. Affiliation includes an organization that is a wholly owned          
  subsidiary of, or by under common control with, an ``exempt'' member or participant organization. An inactive 
  organization is one which had no securities transaction revenue, as determined by semi-annual FOCUS reports,  
  as long as the organization continues to have no such revenue each month.                                     

* * * * *

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 Phlx 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 Phlx 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 Phlx proposes to increase its fees for the initial, maintenance 
and transfer of RR registration with the Exchange from $10.00 to 
$12.00. These fees, which were adopted in 1993,\2\ and subsequently 
adjusted in 1995,\3\ were intended to offset Exchange regulatory costs 
based on the number of registrations maintained by member 
organizations. The registration fees are payable by member 
organizations that apply for, maintain and transfer RR registrations. 
Specifically, the Exchange will increase the $10.00 fee for all initial 
RR registrants to $12.00. The $10.00 annual maintenance fee also will 
increase to $12.00 for each RR. Lastly, the $10.00 fee for transfers of 
RR registrations will increase to $12.00. This increase will become 
effective upon the November 1997 billing for the January 1998 fee, 
which is conducted and collected for the Exchange by the National 
Association of Securities Dealers, Inc. (``NASD''). The $12.00 fees 
apply to 1998 registrations. Any initial registration in 1997 would 
continue to be subject to the $10.00 initial registration fee. Any 
maintenance and transfer fees incurred for calendar year 1997 would 
continue to be subject to the $10.00 maintenance or transfer fee.
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    \2\ Securities Exchange Act Release No. 32833 (September 14, 
1993), 58 FR 48922 (September 20, 1993) [File No. SR-Phlx-93-24].
    \3\ Securities Exchange Act Release No. 36348 (October 6, 1995), 
60 FR 53450 (October 13, 1995) [File No. SR-Phlx-95-59].
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    The purpose of the proposed rule change is to address the increased 
costs associated with maintaining a fair and orderly market in Exchange 
products due to growing trading volume which drives the need for 
enhanced automated surveillance in an increasingly sophisticated 
trading environment. The proposed fee increase also addresses an 
increase in the number of listed products traded by the Exchange as 
``primary issues,'' the number of trading vehicles with new features, 
and the number of surveillance investigations conducted, including the 
resultant disciplinary actions.
    The Exchange continues to believe that a strong regulatory program 
is essential to an exchange's ability to maintain a fair and orderly 
market for the investment community. Since the adoption of the RR fees, 
the Exchange has listed additional issues and new products, triggering 
additional regulatory costs. Most notably, the general costs associated 
with the Exchange's regulatory program have continued to rise. 
Inflationary increases have also affected the cost of staffing, 
equipment, technology and other continuing expenses, which have risen 
since the last increase in 1995.
2. Statutory Basis
    The proposed registration fee increase is consistent with Section 
6(b)(4) of the Act \4\ in that it provides for the equitable allocation 
of reasonable dues, fees or charges among the Exchange's members and 
issuers and other persons using its facilities. The Exchange notes that 
the implementation of such a fee is similar to other exchanges, 
including the American Stock Exchange, Chicago Board Options Exchange, 
New York Stock Exchange, NASD and Pacific Exchange. \5\ The Exchange 
believes that the fee increase from $10.00 to $12.00 is reasonable in 
light of increasing regulatory costs and the anticipated 1998 budgetary 
costs since the fee was last adjusted in 1995.
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    \4\ 15 U.S.C. Sec. 78f(b)(4) (1994).
    \5\ See e.g., Securities Exchange Act Release No. 36733 (January 
17, 1996), 61 FR 1954 (January 24, 1996) [File No. SR-AMEX-95-55]; 
Securities Exchange Act Release No. 36119 (August 18, 1995), 60 FR 
44372 (August 25, 1995) [File No. SR-CBOE-95-31]; Securities 
Exchange Act Release No. 35796 (June 1, 1995), 60 FR 30625 (June 9, 
1995) [File No. SR-NYSE-95-20]; Securities Exchange Act Release No. 
38112 (January 3, 1997), 62 FR 1350 (January 9, 1997) [File No. SR-
NASD-96-53]; Securities Exchange Act Release No. 29954 (November 18, 
1991), 56 FR 59315 (November 25, 1991) [File No. SR-PSE-91-37]; and 
Securities Exchange Act Release No. 31425 (November 9, 1992); 57 FR 
54371 (November 17, 1997) [File No. SR-PSE-92-31].
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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 with respect 
to the proposed rule change.

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 on August 25, 1997, pursuant to Section 19(b)(3)(A) of the 
Act \6\ and subparagraph (e) of Rule 19b-4 thereunder.\7\
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    \6\ 15 U.S.C. Sec. 78s(b)(3)(A)(1994).
    \7\ 17 CFR 240.19b-4(e)(1997).
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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

[[Page 48916]]

Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. Sec. 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 Phlx. All submissions should refer to File No. 
SR-Phlx-97-41 and should be submitted by October 8, 1997.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12) (1997).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-24590 Filed 9-16-97; 8:45 am]
BILLING CODE 8010-01-M