[Federal Register Volume 63, Number 60 (Monday, March 30, 1998)]
[Notices]
[Pages 15246-15247]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8202]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39778; File No. SR-PCX-98-05]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. 
Relating to Book Execution Charges for Options Transactions

March 20, 1998.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'' or ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on February 24, 1998, the Pacific Exchange, Inc. 
(``PCX'' 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) (1982).
    \2\ 17 CFR 240.19b-4 (1991).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The PCX is proposing to amend its Schedule of Fees and Charges by 
modifying its Book Execution Charges for options transactions.

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

    Under the Exchange's Schedule of Fees and Charges, the Exchange 
currently charges its member firms for book execution \3\ based on a 
tiered structure. Accordingly, the amount of the book execution charge 
for a given option transaction currently depends upon the amount of the 
option premium \4\ and the number of the option contracts executed.
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    \3\ The term book execution refers to transactions executed by 
the Options Public Limit Order Book. See generally, PCX Rules 6.51-
6.59.
    \4\ The premium is the price of the option contract that the 
buyer of the option pays to the option writer for the rights 
conveyed by the option contract.
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    The Exchange is now proposing to eliminate its current tiered 
billing structure for options book executions and to replace it with a 
flat fee of $0.45 per contract. The only exception to the flat fee is 
that the Exchange will continue to charge $0.10 for accommodation/
liquidation transactions.
    The Exchange believes that the change to a $0.45 flat fee will 
result in an overall reduction in rates charged to Exchange member 
firms for book executions. Accordingly, the purpose of the proposed 
rule change is to make the Exchange more competitive by reducing costs 
incurred by its customers in executing transaction on the Exchange, 
thus making the Exchange a more cost-effective market center to which 
to send order flow. The Exchange also believes that the change will 
make it easier for members and member firms to calculate their book 
execution charges.
    This proposal is consistent with Section 6(b) of the Act, in 
general, and Section 6(b)(4), in particular, in that it is designed to 
provide for the equitable allocation of reasonable dues, fees and other 
charges among its members.

[[Page 15247]]

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 not necessary or appropriate 
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 on the proposed rule change were neither solicited 
or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Exchange Act and subparagraph (e) of Exchange Act 
Rule 19b-4 because it constitutes or changes a due, fee, or other 
charge imposed by the Exchange. 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 Exchange Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. 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 in the 
Commission's Public Reference Room, 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 PCX. All submissions should 
refer to File No. SR-PCX-98-05 and should be submitted by April 20, 
1998.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Security.
[FR Doc. 98-8202 Filed 3-27-98; 8:45 am]
BILLING CODE 8010-01-M