[Federal Register Volume 63, Number 176 (Friday, September 11, 1998)]
[Notices]
[Pages 48774-48775]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-24372]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40395; File No. SR-PCX-98-32]


Self-Regulatory Organizations; Pacific Exchange, Inc.; Order 
Granting Approval to Proposed Rule Change Relating to Listing and 
Maintenance Fees for Nasdaq Listings

September 3, 1998.

I. Introduction

    On July 14, 1998,\1\ the Pacific Exchange, Inc. (``PCX'' or 
``Exchange'') submitted to the Securities and Exchange Commission 
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \2\ and Rule 19b-4 
thereunder,\3\ a proposed rule change to modify its listing and 
maintenance fees for certain issues dually listed on the PCX and the 
Nasdaq Stock Market, Inc. (``Nasdaq'').
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    \1\ The proposed rule change was originally filed on June 19, 
1998 pursuant to Section 19(b)(3)(A)(ii) of the Act. Amendment No. 1 
converted the proposed rule change to a filing pursuant to Section 
19(b)(2) of the Act because the proposal changed fees that apply to 
issuers. Letter from Robert Pacileo, Staff Attorney, Regulatory 
Policy, PCX to Kelly McCormick, Attorney, Office of Market 
Supervision, Division of Market Regulation, Commission, dated July 
10, 1998.
    \2\ 15 U.S.C. 78s(b)(1).
    \3\ 17 CFR 240.19b-4.
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    The proposed rule change was published for comment in the Federal 
Register on July 29, 1998, as amended.\4\ No comments were received on 
the proposal. This order approves the proposal.
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    \4\ Securities Exchange Act Release No. 40249 (July 22, 1998), 
63 FR 40577.
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II. Description of the Proposal

    Currently, common stock that is listed on both the PCX and either 
the New York Stock Exchange (``NYSE'') or American Stock Exchange 
(``AMEX'') is considered dually listed for the purposes of determining 
the amount of original listing fees and maintenance fees. In the 
proposed rule change, the Exchange proposed to add Nasdaq National 
Market (``NNM'') issues to the list of dually listed issues, thereby 
reducing the original listing fee for NNM issues to $10,000.00 from 
$20,000.00. Annual maintenance fees for any one NNM issue were also 
proposed to be reduced from $2000.00 to $1000.00. Fees for Nasdaq Small 
Cap Market issues remain the same.
    In addition to modifying original listing fees and maintenance 
fees, the Exchange proposed to reduce the frequency of listing 
maintenance

[[Page 48775]]

reviews for NNM issues; the reviews will be done on an annual basis 
along with other dually listed issues and rather than a quarterly basis 
as required for exclusive issues.\5\
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    \5\ The PCX Policy and Procedures Manual Section 903.01 provides 
for annual listing maintenance reviews for dually listed issues.
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III. Discussion

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange.\6\ 
In particular, the Commission believes the proposal is consistent with 
the requirements of Section 6(b)(4) of the Act \7\ because it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among members, issuers and other persons using 
its facilities. The proposal fairly allocates fees among issuers, NYSE, 
AMEX and NNM. The proposal provides issuers that list on both the PCX 
and NNM with the lower fees and lighter maintenance schedule as are 
currently provided to NYSE and AMEX issues. The Commission believes 
such reduced fees are appropriate and reasonable because the costs 
incident to maintaining exclusive issues are greater than costs 
incident to maintaining dually listed issues. The Exchange's costs 
incident to dually listed issues are lower because it requires only one 
maintenance review annually, rather than the quarterly reviews required 
for exclusive issues.
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    \6\ In reviewing this proposal, the Commission has considered 
its impact on efficiency, competition, and capital formation. 15 
U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b)(4).
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    In addition, the Commission finds that the proposed rule change is 
consistent with the requirements of Section 6(b)(5) of the Act.\8\ The 
Commission believes the proposal fosters cooperation and coordination 
between persons engaged with regulating securities transactions. The 
PCX reduced its own review process on NNM issues based in part on the 
review process of Nasdaq. According to the PCX, Nasdaq is a primary 
listing association and bears the primary obligation to ensure that its 
issuers meet appropriate listing standards. The Commission also 
believes that the proposal is not designed to permit unfair 
discrimination between issuers because the Exchange listing maintenance 
reviews for dually listed NYSE, AMEX and NNM issues are all on an 
annual basis.
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    \8\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-PCX-98-32) is approved.
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    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-24372 Filed 9-10-98; 8:45 am]
BILLING CODE 8010-01-M