[Federal Register Volume 64, Number 82 (Thursday, April 29, 1999)]
[Notices]
[Pages 23144-23145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10762]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41317; File No. SR-Phlx-99-09]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. To Modify Fees for Option Transactions

April 21, 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 30, 1999, the Philadelphia Stock Exchange, Inc. (``Phlx'' 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 amend certain fees charged to customers 
\3\ for operations transactions. In addition, the Exchange will raise 
certain transaction fees charged to the membership, the floor 
facilities fee, and charges for trading post/booth space and shelf 
space. The text of the proposed rule change is available at the 
Exchange and at the Commission.
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    \3\ The Exchange represents that the equity option transaction 
charge is paid by member organizations for execution on behalf of 
their customers. Telephone conversation between Nadita Yagnik, 
Counsel, Exchange, and Joseph P. Morra, Attorney, Division of Market 
Regulation, Commission, on April 12, 1999. Thus, the Exchange filed 
this proposal under Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(2) thereunder. 15 U.S.C. 78s(b)(3)(A), 17 CFR 420.19b-4(f)(2).
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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 
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
    The Exchange proposes to reduce certain transaction fees for 
options, to attract customer order flow to the Phlx options market, and 
to remain competitive. Specifically, equity option customer execution 
fees for contracts with a market value less than $1.00 are being 
reduced from $.15 per contract to $.10 per contract. Equity option 
customer execution fees for contracts with a market value greater than 
or equal to $1.00 are being reduced from $.30 to $.10 per contract. 
Fees for equity options transactions automatically executed by AUTO-
X,\4\ currently charged at $.15 per contract where the market value of 
the contract is less than $1.00, and at $.30 per contract for execution 
where the market value of the contract is greater than equal to $1.00, 
are being waived for equity options. The contra-side to such orders 
(specialists or Registered Options Traders (``ROTs'')) will continue to 
be charged the application transaction charge as discussed below.
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    \4\ AUTO-X is the automatic execution feature of AUTOM, the 
Phlix Automated Options Market System.
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    In turn, the Exchange will increase fees to options specialists and 
ROTs from $.07 per contract to $.14 per contract for transactions in 
equity and index options.\5\ Fees for transactions in Value Line 
options will be increased from $.09 to $.14 per contract. Foreign 
currency options charges imposed on ROTs and specialists will be raised 
from $.07 per contract to $.14 per contract. In addition, the Exchange 
proposes to raise the trading post/booth/controller fee from $375 per 
quarter to $750 per quarter, the floor facility fee from $187.50 per 
quarter to $375 per quarter, and the fee charged for shelf space on all 
three trading floors--equity, option, and foreign currency option, from 
$187.50 per quarter to $375 per quarter. The Exchange proposes these 
changes to counterbalance revenues lost from the customer execution 
transaction charges.
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    \5\ For clarity, the Exchange is renaming the index option 
transaction charge to emphasize that it applies to all index options 
except the Value Line index options.
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    The proposed fees will be effective April 1, 1999.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b)(4) of the 
Act \6\ in that it provides for the equitable allocation of reasonable 
dues, fees and other charges among Exchange members and persons using 
the Exchange facilities.
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    \6\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange represents that the proposed rule change should not 
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

    No written comments were either solicited or received by the 
Exchange with respect to the proposed rule change.

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

    The proposed rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \7\ and subparagraph (f)(2) of Rule 19b-4 under 
the Act because it involves a due, fee, or other charge.\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)(2).
    \9\ In viewing 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 of 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 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

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the principal office of the Exchange. All submissions should refer to 
file number SR-Phlx-99-09, and should be submitted by May 20, 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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Jonathan G. Katz,
Secretary.
[FR Doc. 99-10762 Filed 4-28-99; 8:45 am]
BILLING CODE 8010-01-M