[Federal Register Volume 64, Number 7 (Tuesday, January 12, 1999)]
[Notices]
[Pages 1836-1838]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-597]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40881; File No. SR-Amex-98-46]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange 
LLC Relating to Revised Equity Fee Schedule

Janaury 4, 1999.
    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 December 11, 1998, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by Amex. 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 240.196-4.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    Amex is proposing to revise its equity fee schedule to reflect the 
transaction charges that will be imposed on trades in Select Sector 
SPDRs and the Nasdaq 100 Index Trust, the new exchange-traded fund 
products that are scheduled to begin trading in December and January, 
respectively.\3\ The text of the proposed rule change is set forth 
below. Proposed new language is italicized.
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    \3\ In December 1998, the Commission approved trading of Select 
Sector SPDRs, see Securities Exchange Act Release No. 40749 
(December 4, 1998), 63 FR 68483 (December 11, 1998), and noticed the 
Exchange's intention to trade the Nasdaq 100 Index Trust, see 
Securities Exchange Act Release No. 40809 (December 18, 1998), 63 FR 
71524 (December 28, 1998).

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[[Page 1837]]

Amex Equity Fee Schedule

I.

Transaction charges

Share--Based Charge

------------------------------------------------------------------------
                                                             Rate, per
                   Total shares/month                          share
------------------------------------------------------------------------
Up to 16,500,000........................................         $.00225
16,500,00-25,000,000....................................          .00200
25,000,001-33,000,000...................................          .00175
Over 33,000,000.........................................          .00150
------------------------------------------------------------------------

Value--Based Charge

------------------------------------------------------------------------
                                                             Rate per
             Total gross dollar value/month                   $1,000
------------------------------------------------------------------------
Up to $200,000,000......................................         $0.7500
$200,000,001-300,000,000................................          .07000
$300,000,001-400,000,000................................          .06500
Over $400,000,000.......................................          .05000
------------------------------------------------------------------------

Notes:

    1. In calculating these charges, each order will be assessed on 
the first 25,000 shares only.
    2. Amex specialist/REMM trades are 100% deductible.
    3. Amex option specialist/ROT trades in paired securities are 
100% deductible.
    4. The value-based portion of the transaction charge (based on 
the value of shares traded) is subject to a maximum charge of $40 
per trade.
    5. Proprietary trades in Canadian securities are charged at 50% 
of the above rates.
    6. PER System orders for up to 1,099 shares will not be assessed 
a share or value charge. This provision does not apply to PER orders 
of a member of member organization trading as an agent for the 
account of a non-member competing market maker. A ``competing market 
maker'' is defined as a specialist or market maker registered as 
such on a registered stock exchange (other than the Amex), or a 
market maker bidding and offering over-the-counter, in an Amex-
traded security.
    7. In lieu of the above transaction charge, a separate fee will 
be imposed for executing trades in Standard & Poor's Depositary 
Receipts (``SPDRs''), Select Sector Standard & Poor's Depositary 
Receipts (``Select Sector SPDRs''), Standard and Poor's MidCap 
Depositary Receipts (``MidCap SPDRs''), DIAMONDS, and the Nasdaq 100 
Index Trust, which will vary depending on for whom the trade is 
executed. Specialists will be charged a transaction fee of $.006 per 
share (.60 per 100 shares), capped at $300 per trade (50,000 
shares). Registered Traders will be charged a transaction fee of 
$.007 per share ($.70 per 100 shares), capped at $350 per trade 
(50,000 shares). Off-floor orders (i.e., customer and broker-dealer) 
will be charged a transaction fee of $.006 per share ($.60 per 100 
shares), capped at $100 per trade (16.667 shares).
    8. PER System orders for up to 5,099 shares in SPDRs, Select 
Sector SPDRs, MidCap SPDRs, DIAMONDS, and the Nasdaq 100 Index Trust 
will not be assessed a transaction charge. This provision does not 
apply to PER orders of a member of member organization trading as an 
agent for the account of a non-member competing market maker.
II.

Regulatory Fee

.00005  x  Total Value

Notes:

    1. All trades executed on the Exchange in SPDRs, Select Sector 
SPDRs, MidCap SPDRs, DIAMONDS, and the Nasdaq 100 Index Trust will 
be exempt from the regulatory fee. This provision does not apply to 
PER orders of a member or member organization trading as agent for 
the account of a non-member competing market maker.
III. DIAMONDS Specialist Fee
    In addition to the $.006 per share transaction charge imposed on 
the specialist in DIAMONDS under Note 7 above, such specialist will 
be required to pay a separate fee of $90,000 per months, payable at 
the beginning of each month.

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

    In its filing with the Commission, Amex included statements 
concerning the purpose of, and basis for, the fee 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. 
Amex 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
    In 1997, the Amex approved certain changes in its equity fee 
schedule relative to trades in SPDRs, MidCap SPDRs, and DIAMONDS 
executed on the Amex. Under the fee schedule, specialists are charged a 
transaction fee of $.006 per share ($.60 per 100 shares), capped at 
$300 per trade (50,000 shares). Registered Traders are charged a 
transaction fee of $.007 per share ($.70 per 100 shares), capped at 
$350 per trade (50,000 shares). Off-floor orders (both customer and 
broker-dealer) are charged a transaction fee of $.006 per share ($.60 
per 100 shares), capped at $100 per trade (16,667 shares).
    In addition to the foregoing, orders up to 5,099 shares in SPDRs, 
MidCap SPDRs, and DIAMONDS routed to the Amex floor electronically 
through the Amex's Post Execution Reporting (PER) System are not 
assessed a transaction fee. However, the fee schedule operates on a 
principle consistent with that applied in the context of the Amex's 
current fee waiver in equities generally for PER orders up to 1,099 
shares, in that the various fee waivers in SPDRs, MidCap SPDRs, and 
DIAMONDS are not available to PER orders for the account of a nonmember 
competing market maker.
    In connection with the introduction of Select Sector SPDRs and the 
Nasdaq 100 Index Trust, the new exchange-traded fund products scheduled 
to begin trading in December and January, we are imposing on such 
products the same transaction fee schedule that we impose

[[Page 1838]]

on trading in SPDRs, MidCap SPDRs, and DIAMONDS. These fees are 
calculated to provide low costs to users of the products while making 
the cost of trading on the Exchange comparable to the economics of 
trading these and functionally similar products in other markets. The 
Exchange will notify member firms regarding the fee change, as well as 
the date of its effectiveness.
2. Statutory Basis
    The fee change is consistent with section 6(b) of the Act in 
general and furthers the objectives of section 6(b)(4) in particular in 
that it is intended to assure the equitable allocation of reasonable 
dues, fees, and other charges among members, issuers and other persons 
using the Exchange's facilities.

B. Self-Regulatory Organization's Statement on Burden on Competition

    Amex does not believe that the proposed rule change will result in 
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

    Amex 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, which establishes or changes a due, fee, 
or other charge applicable to members of the Exchange, 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, including whether the foregoing is 
consistent with the Act. Persons making written submissions should file 
six copies thereof with the Secretary, Securities and Exchange 
Commission, 450 Fifth Street, NW., Washington, DC 20549. Copies of the 
submission, all subsequent amendments, all written statements with 
respect to the rule change that are filed with the Commission, and all 
written communications relating to the 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. Copies of such filing will also be available for 
inspection and copying at the principal office of the Amex. All 
submissions should refer to File No. SR-Amex-98-46 and should be 
submitted by February 2, 1999.

    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. 99-597 Filed 1-11-99; 8:45 am]
BILLING CODE 8010-01-M