[Federal Register Volume 65, Number 103 (Friday, May 26, 2000)]
[Notices]
[Pages 34244-34245]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-13258]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42802; File No. SR-Phlx-00-42]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. To Adopt a New Transaction Fee of $0.20 Per Trade for 
Specialists Trading on the Philadelphia Stock Exchange Automated 
Communication System

May 19, 2000.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b 4 thereunder,\2\ notice hereby is given that 
on May 8, 2000, 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.\3\ The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\15 U.S.C. 78s(b)(1).
    \2\17 CFR 240.19b-4.
    \3\The current proposal replaces File No. SR-Phlx-00-36, which 
the Phlx has withdrawn. See Letter from John Kenney, Jr., Counsel, 
Phlx, to Nancy Sanow, Assistant Director, Division of Market 
Regulation, Commission, dated May 5, 2000. In file No. SR-Phlx-00-
36, the Phlx proposed to establish a monthly transaction fee of 
$0.20 per $1000 of value traded for equity specialists' trades 
transacted through the Philadelphia Stock Exchange Automated 
Communication and Execution (``PACE'') System. According to the 
Phlx, the Exchange inadvertently filed File No. SR-Phlx-00-36 with 
the Commission. Telephone conversation between John Kenney, Jr., 
Counsel, Phlx, and Michael Gaw, Attorney, Division of Market 
Regulation, Commission, on May 16, 2000 (``May 16 Conversation'')
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Phlx proposes to amend its schedule of dues, fees, and charges 
to initiate a transaction fee of $0.20 per trade for equity specialists 
using the PACE System. The proposed fee would be effective on June 1, 
2000. The following is the text of the proposed addition to the Phlx 
fee schedule:

``EQUITY FLOOR SPECIALIST TRANSACTION FEE $.20 per trade for each trade 
conducted on PACE''

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 Phlx included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received regarding the proposed rule change. 
The text of these statements may be examined at the places specified in 
Item IV below. the Phlx 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 would amend the Exchange's fee schedule to 
include a transaction fee of $0.20 per trade for those specialists 
trading through the PACE system on the equity floor of the Exchange. 
PACE is the Exchange's automated order entry, routing, and execution 
system. The purpose of the fee is to generate revenues for the Exchange 
that would strengthen its overall financial and competitive posture. 
For example, the Exchange may continue to incur costs respecting PACE 
system development, such as decimalization efforts and other planned 
improvements. Of course, the Phlx is seeking to raise revenues for 
overall Exchange use. The Exchange believes that the fee is both 
reasonable and equitable because Phlx specialists are not currently 
charged any Phlx fee respecting PACE trades.
2. Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \4\ in general and Section 6(b)(4) of the 
Act \5\ in particular in that it is intended to provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
its members and other persons using its facilities.\6\
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
    \6\ The Phlx represents that the proposed fees would be charged 
exclusively to members and not to public customers. See May 16 
Conversion, supra note 3. The Commission notes that this proposed 
rule change is, therefore, properly filed under Section 
19(b)(3)(A)(ii) of the Act. 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement of Burden on Competition

    The Phlx does not believe that the proposed rule change would 
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 
other charge imposed by the Exchange and, therefore, has become 
effective pursuant to Section 19(B)(3)(A)(ii) of the Act \7\ and Rule 
19b-4(f)(2) \8\ thereunder. The Exchange intends to implement the fee 
effective June 1, 2000. 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

[[Page 34245]]

appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purpose of the Act.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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 at the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
Exchange. All submissions should refer to File No. SR-Phlx-00-42 and 
should be submitted by June 16, 2000.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-13258 Filed 5-25-00; 8:45 am]
BILLING CODE 8010-01-M