[Federal Register Volume 64, Number 150 (Thursday, August 5, 1999)]
[Notices]
[Pages 42746-42747]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20175]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41670; File No. SR-SCCP-99-02]


Self-Regulatory Organizations; Stock Clearing Corporation of 
Philadelphia; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to Fees

July 29, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on June 25, 1999, Stock 
Clearing Corporation of Philadelphia (``SCCP'') 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 primarily by SCCP. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested parties.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    Under the proposed rule change, SCCP will adopt fees for trade 
recording of transactions conducted through the Volume Weighted Average 
Price (``VWAP'') \2\ Trading System 
(``VTS''TM).\3\ SCCP is not proposing to adopt a transaction 
value charge on VTS transactions.
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    \2\ VWAP is a registered trademark of the Universal Trading 
Technologies Corporation (``UTTC'').
    \3\ The VTS trademark is the property of UTTC.
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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, SCCP 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. SCCP has prepared summaries, set forth in sections (A), 
(B) and (C) below, of the most significant aspects of these 
statements.\4\
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    \4\ The Commission has modified the text of the summaries 
prepared by SCCP.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The Commission approved VTS on March 24, 1999.\5\ VTS will provide 
a daily preopening matching session for the execution of large-sized 
stock orders at the VWAP. Philadelphia Stock Exchange (``Phlx'') Rule 
237 governs the operation of VTS. During the session, VTS will 
electronically match orders for execution at the VWAP according to the 
algorithm developed by UTTC. The matched and executed orders will be 
assigned a final VWAP after the close of regular trading. VTS will 
operate as a facility of the Phlx under Section 3(a)(2) of the Act.\6\ 
Specifically, the System will involve some Phlx equipment and 
personnel, allow floor trader participation, and rely upon SCCP to 
process system trades. Matches performed during the session will be 
regulated and reported as Phlx trades.\7\ SCCP will process VTS trades 
just like any other Phlx equity trade.
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    \5\ Securities Exchange Act Release No. 41210 (March 24, 1999), 
64 FR 15857 [SR-Phlx-96-14].
    \6\ 15 U.S.C. 78c(a)(2).
    \7\ Matches performed by VTS will be subject to fees established 
in Phlx's fee schedule. Securities Exchange Act Release No. 41646 
(July 23, 1999( [SR-Phlx-99-21].
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    SCCP proposes to charge $0.30 per side for trade confirmation 
services performed by SCCP. VTS trades are processed for clearing 
through SCCP just like a Phlx equity floor trade and will be recorded 
and confirmed like any other trade pursuant to SCCP Rule 6. Therefore, 
SCCP believes that it is reasonable to charge recording fee of $.30 per 
side for the confirmation and recording of trades conducted through 
VTS. This is the current trade recording fee applicable to Phlx 
Automated Communication and Execution System (``PACE'') trades.\8\
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    \8\ See Phlx Rule 229.
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    Second, SCCP proposes that it will not charge a transaction value 
charge (value fee) for trades conducted through VTS in order to 
encourage the use of VTS for large value transactions. This is also 
similar to SCCP's fees for PACE trades where no value fee is charged.
    For these reasons, SCCP believes that the proposal constitutes a 
equitable allocation of reasonable dues, fees and other charges, 
pursuant to Section 17A(b)(3)(D) of the Act.\9\
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    \9\ 15 U.S.C. 78q-1(b)(3)(D).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    SCCP 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)(ii) \10\ of the Act and Rule 19b-4(f)(2) \11\ promulgated 
thereunder because the proposal establishes or changes a due, fee, or 
other charge imposed by SCCP. At any time within sixty days of the 
filing of such proposed rule change, the Commission may summarily 
abrogate such rule change if it appears to the Commission that such 
action is necessary to appropriate in the public interest, for the 
protection of investors, or otherwise in furtherance of the purposes of 
the Act.
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    \10\ 15 U.S.c. 78s(b)(3)(A)(ii).
    \11\ 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

[[Page 42747]]

arguments concerning the foregoing, including whether the proposed rule 
change 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 20549-0609. 
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 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 
Commissions' Public Reference Section, 450 Fifth Street, NW, 
Washington, DC 20549. Copies of such filing also will be available for 
inspection and copying at the principal office of SCCP. All submissions 
should refer to File No. SR-SCCP-99-02 and should be submitted by 
August 26, 1999.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-20175 Filed 8-4-99; 8:45 am]
BILLING CODE 8010-01-M