[Federal Register Volume 64, Number 79 (Monday, April 26, 1999)]
[Notices]
[Pages 20349-20350]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10422]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41307; File No. SR-PCX-99-09]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. 
Relating to Customer Transaction Charges and On-Line Comparison Charges

April 16, 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 March 31, 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 the Exchange. 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

    The Exchange proposes to change its Schedule of Fees and Charges 
for Exchange Services by eliminating customer transaction charges \3\ 
for Pacific Options Exchange Trading System (``POETS'') \4\ automated 
executions and modifying its on-line comparison charges. The text of 
the proposed rule change is available at the Office of the Secretary, 
PCX, and at the Commission.
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    \3\ The Exchange represents that customer transaction charges 
are fees charged to members. As a result, the Commission notes that, 
as this filing relates exclusively to member fees this proposed rule 
change is properly filed under Section 19(b)(3)(A)(ii) of the Act. 
15 U.S.C. 78s(b)(3)(A)(ii). Telephone conversation between Robert P. 
Pacileo, Staff Attorney, Regulatory Policy, PCX, and Joseph P. 
Morra, Attorney, Division of Market Regulation, Commission, on April 
8, 1999.
    \4\ POETS is the Exchange's automated options trading systems. 
See generally Securities Exchange Act Release No. 27633 (January 18, 
1990), 55 FR 2466 (January 24, 1990) (Order approving File No. SR-
PSE-89-26).
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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 Exchange has prepared summaries, set forth in 
Section 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. Currently, the Exchange charges a customer transaction 
fee of $0.12 per contract for trade-related transactions, including 
POETS automated executions (i.e., market and marketable limit orders 
transacted through POETS). The Exchange also charges an on-line 
comparison charge of $0.25 per trade plus $0.025 per contract for all 
trades.
    Proposal. With regard to customer transaction charges, the Exchange 
proposes to eliminate the transaction charge of $0.12 per contract on 
all customer POETS automated executions until such time that Exchange 
technology can modify the billing system to allow for transaction 
charges to be applied based on order size (i.e., $0.00 for orders of 30 
contracts or less). The Exchange proposes this change to remain 
competitive in the market place.
    With regard to on-line comparison charges, the Exchange proposes to 
change its on-line comparison charges to $0.05 per contract and to 
eliminate the per trade charge of $0.25. The Exchange proposes these 
changes in an effort to simplify the fee schedule and remain 
competitive.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act,\5\ in general, and furthers the objectives of 
Section 6(b)(4) of the Act,\6\ 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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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organizations' 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 were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Because the foregoing rule change establishes or changes a due, 
fee, or other charge imposed by the Exchange, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act \7\ and subparagraph (f) of 
Rule 19b-4 thereunder.\8\ 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.\9\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f).
    \9\ In approving this proposal, the Commission has considered 
its 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 proposal 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. 20549-0609. 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

[[Page 20350]]

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 number SR-PCX-99-09, and should be 
submitted by May 17, 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. 99-10422 Filed 4-23-99; 8:45 am]
BILLING CODE 8010-01-M