[Federal Register Volume 63, Number 220 (Monday, November 16, 1998)]
[Notices]
[Pages 63766-63767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-30497]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40644; File No. SR-PCX-98-44]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 to the 
Proposed Rule Change by the Pacific Exchange, Inc. Relating to Fees for 
the Use of Exchange-Sponsored Hand Held Terminals for Options Floor 
Brokers

November 5, 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 11, 1998, the Pacific Exchange, Inc. (``PCX'' 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 
Exchange. On October 29, 1998, the Exchange filed Amendment No. 1 to 
the proposal.\3\ 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.
    \3\ See letter from Robert Pacileo, Staff Attorney, Regulatory 
Policy, PCX, to David Sieradzki, Attorney, Division of Market 
Regulation, SEC dated October 27, 1998 (``Amendment No. 1''). In 
Amendment No. 1. the Exchange clarifies the proposal to indicate 
that these fees are for exchange-sponsored hand held terminals only.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange is proposing to change its Schedule of Fees and 
Charges for Exchange Services by adding charges for the use of 
exchange-sponsored hand held terminals for options floor brokers.
    The text of the proposed rule change is available at the Office of 
the Secretary, PCX and at the Commission.

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 Exchange 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 PCX 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
    Background. With the use of hand held terminals, PCX Member Firms 
have the advantage of sending their orders electronically to either (1) 
a floor broker's exchange-sponsored terminal located in the trading 
crowd; \4\ (2) a Member Firm booth located on the trading floor; or (3) 
to POETS,\5\ where they will be automatically executed by Auto-Ex \6\ 
or maintained in Auto-Book.\7\
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    \4\ See Securities Exchange Act Release No. 39970 (May 7, 1998), 
63 FR 26662 (May 13, 1998) (Order approving File No. SR-PCX-97-28).
    \5\ The Pacific Option Exchange Trading System (``POETS'') is 
the Exchange's automated options trading system. See generally 
Securities Exchange Act Release No. 27633 (Jan. 18, 1990), 55 FR 
2466 (Jan. 24, 1990) (Order approving File No. SR-PSE-89-26).
    \6\ Orders executed by Auto-Ex may be automatically executed at 
the disseminated bid or offering price. Id.
    \7\ Auto-Book maintains non-marketable limit orders based on 
limit price and time of receipt. Id.
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    Proposal. The Exchange proposes to charge a monthly equipment fee 
of $200 for each exchange-sponsored hand held terminal to be billed to 
the Floor Broker registered to use it. In addition, the Exchange 
proposes to charge $0.03 per contract for orders of 10 contracts or 
less which are not directed to POETS through a Member Firm Interface 
(``MFT''),\8\ and are executed via the exchange-sponsored hand held 
terminal. This per contract charge will be billed to the order flow 
provider.
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    \8\ The MFI is an electronic order delivery and reporting system 
that allows member firms to route orders for execution by the 
automatic execution feature of POETS as well as to route limit 
orders to the Options Public Limit Order Book. Orders that do not 
reach those two destinations are defaulted to a member firm booth. 
MFI also provides member firms with instant confirmation of 
transactions to their systems.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) \9\ of the Act, in general, and furthers the objectives of 
Section 6(b)(4),\10\ 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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    \9\ 15 U.S.C. 78f(b).
    \10\ 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 and, therefore, has become effective pursuant to Section 
19(b)(3)(A) of the Act \11\ and subparagraph (e)(2) of Rule 19b-4 
thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(e)(2).
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    At any time within 60 days of the filing of the amended 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; including whether the proposed rule 
change and Amendment No. 1 are 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 Exchange.

[[Page 63767]]

    All submissions should refer to File No. SR-PCX-98-44 and should be 
submitted by December 1, 1998.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-30497 Filed 11-13-98; 8:45 am]
BILLING CODE 8010-01-M