[Federal Register Volume 64, Number 22 (Wednesday, February 3, 1999)]
[Notices]
[Pages 5336-5337]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2535]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40959; File No. SR-PCX-98-65]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. 
Relating to Rescission of Fee Assessment for New Facilities

January 22, 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 January 15, 1999, the Pacific Exchange, Inc. (``PCX'' 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 PCX.\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\ The filing was submitted January 4, 1999, however, the PCX 
amended the filing after it was submitted. Therefore the effective 
date of the filing is January 15, 1999. See letter from Robert P. 
Pacileo, Staff Attorney, PCX, to Mike Walinskas, Deputy Associate 
Director, SEC, dated January 14, 1999.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    PCX is proposing to rescind the special assessment that was 
approved in January 1998. The assessment, which applied to each of the 
552 PCX memberships, was intended to provide an equity base to fund new 
facilities to house the Exchange's new trading floor, technology 
facilities, associated office space and equipment.

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 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. 
PCX has prepared summaries, set forth in sections A, B, and C below, of 
the most significant aspects of such statements.

[[Page 5337]]

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

1. Purpose
    Background: The Exchange received approval by the Commission to 
assess the 552 PCX memberships $36,000, to be paid by each membership 
in monthly installments of $1,000 per month.\4\ In the original 
proposal, the Exchange stated that ``the purpose of the assessment is 
to provide an equity base to finance land and facilities to house the 
Exchange's new trading floors, technology facilities, associated office 
space and equipment.'' In addition, the Exchange proposed that the 
amount raised would serve as an equity base to aid in the process of 
obtaining additional financing.
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    \4\ See Securities Exchange Act Release No. 39945 (May 1, 1998), 
63 FR 25891 (May 11, 1998).
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    Proposed Fees: The Exchange proposes to rescind its $36,000 special 
assessment of each of its 552 memberships. The Exchange proposes this 
rescission for several reasons including: significant and rapid changes 
in the industry, the entry of new, well-capitalized competitors, the 
introduction of electronic trading, and other technological 
enhancements. The Exchange believes that it must use its technological, 
staff, and financial resources to aggressively respond to competitive 
pressures, but it has been able to alter its facility requirements. 
Although the Exchange still needs to expand and renovate its trading 
facilities, technological enhancements will allow it to do so in a less 
costly manner than the facilities proposed in the original filing.\5\ 
In conjunction with rescinding the assessment, the Exchange intends to 
refund all payments collected as part of the assessment from the owners 
of its 552 memberships.
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    \5\ Id.
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2. Statutory Basis
    The fee change is consistent with Section 6(b) \6\ of the Act in 
general and furthers the objectives of Section 6(b)(4) \7\ in 
particular because it provides for the equitable allocation of 
reasonable dues, fees, and other charges among its members.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    PCX 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

    PCX 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,\8\ and 
subparagraph (e)(2) of Rule 19b-4 thereunder.\9\ 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.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(e)(2).
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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 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 PCX. All 
submissions should refer to File No. SR-PCX-98-65 and should be 
submitted by February 24, 1999.

    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. 99-2535 Filed 2-2-99; 8:45 am]
BILLING CODE 8010-01-M