[Federal Register Volume 63, Number 195 (Thursday, October 8, 1998)]
[Notices]
[Pages 54175-54176]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-26999]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40496; File No. SR-PCX-98-42]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. 
Relating to Equity Rate Reduction and Simplification

September 29, 1998.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 8, 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 PCX. 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).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    PCX proposes to change its Schedule of Fees and Charges for 
Exchange Services for equity trade-related transaction charges. the 
text of the proposed rule change is contained in Exhibit A.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, PCX 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. PCX has prepared summaries, set forth in Sections A, B, 
and C below, of the most significant aspects of such statements.

A. Self-Regualtory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Currently, under the Schedule of Fees and Charges for Exchange 
Services, members are subject to equity trade-related charges based on 
cumulative billable trade value per month. The value charges are 
incremental and resulting charges are subject to discounts for 
automated trades. The Exchange proposes to reduce transaction charges 
and simplify the way volume based charges are calculated. Specifically, 
the Exchange proposes to eliminate listed comparison charges, reduce 
transaction fees and establish a share-based structure with four tiers 
(as opposed to the current value-based structure with seven tiers and 
twelve discount categories). The Exchange also proposes to cap block 
transactions at 20,000 shares, and to continue to waive transaction and 
off-board comparison charges in AMEX-listed issues.

[[Page 54176]]

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) \3\ of the Act, in general, and furthers the objectives of 
Section 6(b)(4) \4\ in particular, because it provides for the 
equitable allocation of reasonable dues, fees and other charges among 
its members and issuers and other persons using its facilities.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 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 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 
nor received.

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)(ii) \5\ and subparagraph 
(e)(2) of Rule 19b-4 thereunder.\6\ At any time within 60 days of the 
filing of 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.\7\
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    \5\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \6\ 17 CFR 240.19b-4(e)(2).
    \7\ In reviewing this proposal, the Commission has considered 
the proposal's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
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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 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 
PCX.
    All submissions should refer to File No. SR-PCX-98-42 and should be 
submitted by October 29, 1998.

    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).
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Margaret H. McFarland,
Deputy Secretary.

EXHIBIT A--Text of the Proposed Rule Change \9\

SCHEDULE OF FEES AND CHARGES FOR EXCHANGE SERVICES

* * * * *

PCX EQUITIES: TRADE-RELATED CHARGES

* * * * *

EXCHANGE TRANSACTIONS

Cumulative Billable Shares Per Month
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    \9\ New text is in italics. Deleted text is in brackets.
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    First 4 million shares: $0.31 per 100 shares
    Next 10 million shares: $0.17 per 100 shares
    Next 8 million shares: $0.09 per 100 shares
    Over 22 million shares: $0.05 per 100 shares

    All trades capped at 20,000 shares.

[EXCHANGE TRANSACTIONS

------------------------------------------------------------------------
                                                              Charge per
                                                              $1,000 of
         Cumulative billable trade value per month              trade
                                                                value*
------------------------------------------------------------------------
$0 to $50,000,000..........................................        $0.13
50,000,001 to..............................................         0.10
150,000,001 to.............................................         0.08
350,000,001 to.............................................         0.06
500,000,001 to.............................................         0.04
650,000,001 to.............................................         0.02
Over 800,000,000...........................................         0.01
------------------------------------------------------------------------
*Value charges are incremental; i.e., first $50,000,000 of monthly
  business is charged $0.13 rate, next $100,000,000 is charged $0.10
  rate, etc. Resulting charges are then subject to discounts shown below
  for any automated trades.

DISCOUNT AND CAPS

Automated Trade Discounts

    The following discounts from the above transaction charges apply 
to automated trades:

------------------------------------------------------------------------
                                                   $150 to
                                     Under $150     $350       $350 to
        Trade size (shares)          million of  million of      $500
                                        trade       trade     million of
                                        value       value    trade value
------------------------------------------------------------------------
100 to.............................         35%         30%         25%
401 to.............................        25          20          15
601 to.............................        20          15           5
801 to.............................        10           5         2.5
------------------------------------------------------------------------

Block Trades

    Transaction charges for block trades of 5,000 shares or more are 
subject to a minimum charge of $15 per trade side and a maximum 
charge of $75 per trade side.

Cap on Transaction Charges

    Aggregate monthly transaction charges are subject to a cap of 
$0.45 per 100 shares]

OFFBOARD TRADE RECORDING AND COMPARISON

    $0.05 per 100 shares for each side of individual stock, warrant, 
or rights for [listed or] offboard trades submitted for comparison 
(comparison charges are capped at 20,000 shares per trade side; 
minimum of $0.05, maximum of $10).
    $0.03 per $1,000 bond face value for each side of individual 
bond trade submitted for comparison (minimum of $0.03, maximum of 
$3).

AMEX-LISTED ISSUES

    Trades in AMEX-Listed equity issues are not subject to 
transaction or comparison charges.
* * * * *
[FR Doc. 98-26999 Filed 10-7-98; 8:45 am]
BILLING CODE 8010-01-M