[Federal Register Volume 62, Number 225 (Friday, November 21, 1997)]
[Notices]
[Pages 62395-62396]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30624]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39325; File No. SR-PHLX-97-58]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc., Relating to a Revision to the Exchange's Equity Floor 
Brokerage Assessment Fee

November 13, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on November 5, 1997, the 
Philadelphia Stock Exchange, Inc. (``Phlx'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``SEC'' or ``Commission'') 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 Phlx, pursuant to Rule 19b-4 under the Act, proposes to amend 
the Exchange's Equity Floor Brokerage Assessment schedule which 
currently determines the rate of the assessment on a member's monthly 
equity floor brokerage based upon whether the member is a specialist 
with funds on deposit at the Stock Clearing Corporation of Philadelphia 
(SCCP) or not. The Exchange hereby proposes to change the fee to a flat 
rate of 1.25% of the amount that any member bills out in floor 
brokerage on the Phlx Equity floor each month. The schedule will be 
amended as follows (brackets indicate deletions, italics indicates 
additions):

Summary of Equity Charges

EQUITY FLOOR BROKERAGE ASSESSMENT
    [5%] 1.25% of net floor brokerage income [with specialist credits]

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
    Currently, the Exchange assesses a monthly fee on the amount of 
money a floor broker bills to its customers each month for floor 
brokerage services with respect to equity securities. The rate used to 
calculate the fee is either 5% if the member only conducts business as 
a floor broker, or is discounted to 1.25% if the member also conducts 
business as an equity specialist with funds on deposit at SCCP. When 
this fee was originally adopted in 1974, the Exchange intended to 
encourage members who conducted business on the equity floor as floor 
brokers to also become specialists and open an account at SCCP. In 
recent years, the Exchange has observed that almost all floor brokers 
on the Equity floor were also specialists, thereby taking advantage of 
the lower rate. The Exchange has now decided that the fee should be 
determined solely by the amount of business a floor broker conducts. 
Accordingly, the Exchange is proposing to redesignate the fee as 1.25% 
of a member's floor brokerage on the Exchange Equity floor.
2. Statutory Basis
    The Exchange represents that the proposed rule change is consistent 
with Section 6(b) of the Act,\2\ in general, and furthers the 
objectives of Section 6(b)(4) \3\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees, and other 
charges among the Exchange's members and other persons using its 
facilities.
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    \2\ 15 U.S.C. 78f(b).
    \3\ 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 inappropriate burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received written comments on 
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 pursuant to Section 19(b)(3)(A) of the Act \4\ and 
subparagraph (e)(2) of Rule 19b-4 thereunder.\5\
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    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(e)(2).
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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

[[Page 62396]]

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 Room. Copies of such filing also will be available for 
inspection and copying at the principal office of the Phlx. All 
submissions should refer to File No. SR-PHLX-97-58 and should be 
submitted by December 12, 1997.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-30624 Filed 11-20-97; 8:45 am]
BILLING CODE 8010-01-M