[Federal Register Volume 64, Number 169 (Wednesday, September 1, 1999)]
[Notices]
[Pages 47887-47888]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-22695]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41780; File No. SR-Phlx-99-20]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of a Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc., Relating to Amendments to Schedule of Dues, Fees, and 
Charges

August 23, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 hereunder,\2\ notice is hereby given that 
on June 23, 1999, the Philadelphia Stock Exchange, Inc. (``Phlx'' 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. On June 28, June 30, and July 22, 1999, the Exchange 
submitted Amendment Nos. 1,\3\ 2 \4\ and 3,\5\ respectively, to the 
proposed rule change.\6\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange clarified that the proposed 
new foreign currency options ``participation fee'' would be 
effective as of July 1, 1999, but that only those foreign options 
participants holding legal title as of July 30, 1999 would be 
responsible for paying the fee. See Letter and attached amendment 
from Murray Ross, Vice President and Secretary, Phlx, to Michael 
Walinskas, Associate Director, Division of Market Regulation 
(``Division''), Commission, dated June 25, 1999 (``Amendment No. 
1'').
    \4\ In Amendment No. 2, the Exchange replaced the text of the 
original proposed rule change. The amendment: (a) purported to 
create a technology fee exemption for foreign currency options 
participants who do not hold Phlx membership; (b) incorporated the 
change from Amendment No. 1 regarding the effective date of the 
participation fee; and (c) made typographical changes to the 
proposed fee schedule. See Letter and attached amendment from Murray 
Ross, Phlx, to Michael Walinskas, Division, Commission, dated June 
29, 1999 (``Amendment No. 2'').
    \5\ In Amendment No. 3, the Exchange stated that the technology 
fee exemption was for foreign currency options participants who also 
hold Phlx memberships. The Exchange also stated that the foreign 
currency options participation fee was intended to address costs 
associated with the foreign currency options program including 
occupancy, Securities Industry Automation Corporation night 
processing, market data feeds, staffing and communications. Phlx 
also clarified that the proposed fee would not address Year 2000-
related events. See Letter and attached amendment from Nandita 
Yagnick, Attorney, Phlx, to Michael Walinskas, Division, Commission, 
dated July 21, 1999 (``Amendment No. 3'').
    \6\ Because of the substantive nature of the amendments, the 
Commission deems the proposal to be filed on July 22, 1999, the date 
the last amendment was filed.
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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 foreign currency options participants, as 
defined by Phlx By-Law Article I, Section (i), to pay a new annual 
participation fee of $2,000, billed semi-annually, to be effective July 
1, 1999, and payable July 30, 1999. The Exchange also seeks to clarify 
that it will bill its existing technology fee semi-annually (not 
monthly), and that the technology fee is not applicable to foreign 
currency option participants who hold title to a Phlx membership. The 
Exchange also proposes to make typographical changes to its fee 
schedule. The text of the proposed changes to the Phlx fee schedule may 
be examined in the places specified in Item IV below.

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. 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 proposed rule change amends the Phlx's fee schedule to impose a 
new foreign currency option participation fee of $2,000 annually, to be 
billed semi-annually, effective July 1, 1999, to all foreign currency 
options participants. Only those foreign currency options participants 
who hold legal title as of July 30, 1999 are responsible for payment of 
the participation fee. Thus, although the fee is effective July 1, 
1999, it only becomes payable by participants as of July 30, 1999.
    The Exchange is proposing to implement the foreign currency options 
participation fee to help defray operating expenses of the foreign 
currency options program. The proposed participation fee will address 
costs associated with the foreign currency options program, including 
occupancy, Securities Industry Automation Corporation (SIAC) night 
processing, market data feeds, staffing and communications.\7\
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    \7\ The proposed participation fee is in addition to the 
existing membership dues that Phlx imposes on its members, and also 
separate from the $2,000 user fees owed by foreign currency options 
participants who are not also members of the Phlx. Foreign currency 
options participants who also hold Phlx memberships are exempted 
from the foreign currency user fee.
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    The Exchange also proposes to amend its fee schedule to reflect 
that it will bill its existing technology fee in semi-annual increments 
of $600 (instead of monthly increments of $100). The Exchange further 
proposes that it will not apply the technology fee to foreign currency 
options participants who are also Phlx members to avoid double billing.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6 of the Act \8\ in general, and furthers the objectives 
of Section 6(b)(4) \9\ in particular, in that it provides for the 
equitable allocation of reasonable dues, fees and other charges among 
its members and other persons using its facilities. The Phlx believes 
that the foreign currency option participation fee is reasonable and 
equitable because, in addition to covering costs, it is comparable to 
other Phlx fees and charges such as the technology fee.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Phlx 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 establishes or changes a due, fee or 
change imposed by the Exchange and, therefore, has become effective 
upon filing pursuant to Rule 19(b)(3)(A) of the Act \10\ and rule 19b-
4(f)(2) thereunder.\11\ At any time within 60 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 or appropriate in the public interest, for the protection of 
investors, or otherwise

[[Page 47888]]

in furtherance of the purposes of the Act.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \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 
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 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 
Phlx. All submissions should refer to File No. SR-Phlx-99-20 and should 
be submitted by September 22, 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. 99-22695 Filed 8-31-99; 8:45 am]
BILLING CODE 8010-01-M