[Federal Register Volume 65, Number 179 (Thursday, September 14, 2000)]
[Notices]
[Pages 55665-55666]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-23615]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43257; File No. SR-PHLX-00-73]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. Relating to a Reduction in Fees for Off-Floor Traders

September 6, 2000.
    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 August 25, 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. 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 its schedule of dues, fees and 
charges to require all current and future off-floor traders to pay an 
initial registration fee of $50 and an annual fee thereafter of $250 
for all off-floor traders registered as of April 1st of each year. 
These amounts reflect a reduction from $1,000 for each fee that had 
previously been approved.
    Specifically, the Exchange seeks to require associated persons of 
member organizations for which the Exchange is 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, to pay a reduced registration fee of $50 and thereafter a 
reduced annual fee of $250. The proposed decreases would apply to those 
persons who are not Exchange members registered in a trading capacity 
on the floor of the Exchange. The proposed decreases are to be 
effective September 1, 2000, with implementation of the annual fee to 
be April 1, 2001.

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 purpose of this proposed rule change is to amend the Exchange's 
fee schedule to decrease off-floor trader fees to $250, following a 
review of the original purpose of such fees as well as their current 
costs. Off-floor traders are, pursuant to Phlx Rule 604, persons who 
are currently 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 or options from off the floor 
of the Exchange, and who must file a Form U-4 and a fingerprint card as 
well as provide proof of successful completion of the Uniform 
Registered Representative Examination, Series 7. At this time, the 
Exchange charges such traders an initial registration fee of $1,000 and 
an annual fee of $1,000. The payment of the decreased initial

[[Page 55666]]

registration fee of $50 will be a prerequisite to engaging in trading 
from off the floor of the Exchange.
    All such persons who are registered with the Exchange as of April 1 
of each year, beginning April 1, 2001, will be assessed an annual fee 
of $250. As stated above, the fees are proposed to be decreased from 
$1,000 in recognition of decreased costs of administration that the 
Exchange has been and will be incurring respecting off-floor trader 
examinations. The Exchange had previously experienced increased 
administration costs incurred in conducting background checks on the 
individuals to whom the fees apply, processing of forms, fingerprint 
charges, requests for disciplinary history to the Central Registration 
Depository, as well as in conducting on-site examinations of the home 
and branch offices of the various member firms with which off-floor 
traders associate. During the course of 1999, the Exchange experienced 
an increase in the number of member organizations with off-floor 
traders who were subject to the previous $1,000 registration fee, as 
well as the annual fee. Accordingly, the Exchange undertook increased 
administrative and regulatory responsibilities associated with such 
member organizations and their off-floor traders, including scheduling 
more frequent compliance inspections. Since the previous increase in 
these fees effective March 1, 2000,\3\ the Exchange has conducted an 
evaluation of direct costs associated with the registration of off-
floor traders and maintenance of their respective compliance 
information within the Exchange's Examination and Membership Services 
Departments. The evaluation disclosed that a reduction in the initial 
registration and annual fee for off-floor traders was appropriate.
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    \3\ See Securities Exchange Act Release No. 42497 (May 6, 2000), 
65 FR 14005 (March 15, 2000); Securities Exchange Act Release No. 
41361 (March 3, 1999), 64 FR 25388 (May 11, 1999).
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(2) Statutory Basis
    The proposed rule change is consistent with Section 6(b) \4\ of the 
Act in general and furthers the objectives of Section 6(b)(4) \5\ in 
particular, in that it is designed to provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and issuers and other persons using its facilities.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 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, Participations or Others

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

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

    The foregoing rule change, which establishes or changes a due, fee 
or other charge imposed by the Exchange, has become effective pursuant 
to Section 19(b)(3)(A) of the Act \6\ and subparagraph (f)(2) of Rule 
19b-4 thereunder.\7\ 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 in the furtherance of the purposes of the Act.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 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 in Washington, DC.
    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-00-73 and should be submitted by October 5, 
2000.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-23615 Filed 9-13-00; 8:45 am]
BILLING CODE 8010-01-M