[Federal Register Volume 64, Number 90 (Tuesday, May 11, 1999)]
[Notices]
[Pages 25388-25389]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11814]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41361; File No. SR-Phlx-99-08]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Philadelphia Stock
Exchange, Inc., Establishing a $200 Registration Fee and a $200 Annual
fee for Off-Floor Traders for which the Exchange is the Designated
Examining Authority
May 3, 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 April 22, 1999, the Philadelphia Stock Exchange, Inc. (``Phix'' 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. 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\ 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 its schedule of dues, fees, and
charges to require all current and future off-floor traders to pay an
initial $200 registration fee and an annual fee of $200 for all off-
floor traders registered as of April 1 of each year. The fees would
apply to all associated persons of member organizations for which the
Exchange is the designated examining authority (``DEA''), but who are
not themselves Exchange members, who engage in proprietary trading of
equities and options, including, but not limited to, persons who
execute such trades or make trading decisions with respect to such
trades. The proposed rule would apply to those persons who are not
Exchange members registered in a trading capacity on the floor of the
Exchange.
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
Currently, persons who are associated with member organizations for
which the Exchange is the DEA, but who are not themselves Exchange
members, who engage in proprietary trading of equities and options from
off the floor of the Exchange, are required under Rule 604 to register
with the Exchange by filing a Form U-4 and a fingerprint card.\3\
Separately, the Exchange has filed a proposed rule change to impose a
Series 7 testing requirement on such traders.\4\ At this time, the
Exchange proposes that such traders pay an initial registration fee of
$200. This initial registration fee applies to persons currently
trading from off the floor and to persons who register to trade from
off the floor in the future. The payment of the $200 initial
registration fee will be a prerequisite to engaging in trading from off
the floor of the Exchange. Secondly, all such persons who are
registered with the Exchange as of April 1 of each year will be
assessed an annual fee of $200.
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\3\ See Securities Exchange Act Release No. 36395 (October 20,
1995), 60 FR 54904 (October 26, 1995) (File No. SR-Phlx-95-58)
(order approving amendment of Phlx Rule 604).
\4\ See Securities Exchange Act Release No. 41306 (April 16,
1999), 64 FR 22665 (April 27, 1999) (File No. SR-Phlx-99-07).
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The fees are proposed in recognition of the increased costs of
administration that the Exchange has been and will be incurring.
Specifically, the Exchange anticipates increased administration costs
to be incurred in conducting background checks on the individuals to
whom the rule applies; processing of forms; fingerprint charges;
requests for disciplinary history of all current and future off-floor
traders to the Central Registration Depository; and conducting on-site
examinations of the main and branch offices of the various member firms
with which off-floor traders associate.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
section 6 of the Act,\5\ in general, and with section 6(b)(4),\6\ in
particular, in that it provides for the equitable allocation of
reasonable
[[Page 25389]]
dues, fees, and other charges among its members and other persons using
its facilities.
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\5\ 15 U.S.C. 78f.
\6\ 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
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \7\ and subparagraph (f) of Rule 19b-4
thereunder \8\ because it establishes or changes a due, fee, or other
charge. 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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\7\ 15 U.S.C. 78s(b)(3)(A),
\8\ 17 CFR 240.19b-4(f)(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 proposed rule
change is consistent with the Act.\9\ Persons making written
submissions should file six copies thereof with the Secretary,
Securities and Exchange Commission, 450 Fifth Street, NW, Washington,
DC 20540-0609. 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
filings also will be available for inspection and copying at the
principal office of the the Exchange. All submissions should refer to
File No. SR-Phlx-99-08 and should be submitted by June 1, 1999.
\9\ In reviewing the proposed rule change, the Commission
considered its potential impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
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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. 99-11814 Filed 5-10-99; 8:45 am]
BILLING CODE 8010-01-M