[Federal Register Volume 65, Number 242 (Friday, December 15, 2000)]
[Notices]
[Pages 78525-78526]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31995]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43696; File No. SR-PHLX-00-99]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. Establishing Two Systems Changes and Corresponding Fees 
to Members and Member Organizations for Receiving Certain Equity 
Information on a Real-Time Basis

December 8, 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 November 30, 2000, the Philadelphia Stock Exchange, Inc (``Phlx'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Phlx proposes to effect a systems change and amend its schedule 
of dues, fees and charges to impose a $.10 per trade off-Exchange 
information fee for Phlx equity specialist units utilizing an 
enhancement to the Phlx electronic equity system, the Phlx Automated 
Communication and Execution (``PACE'') System,\3\ that provides equity 
specialists on the floor with real-time trade information respecting 
Super Designated Order Turnaround (``Super Dot'') transactions in New 
York Stock Exchange, Inc. (``NYSE'') securities.\4\
---------------------------------------------------------------------------

    \3\ See Phlx Rule 229.
    \4\ SuperDot is an order routing system of the NYSE.
---------------------------------------------------------------------------

    In addition, Phlx proposes to effect a systems change and amend its 
schedule of dues, fees and charges to impose a $300 per month remote 
information access fee on members and member organizations utilizing 
another enhancement to the PACE System that provides real-time trade 
information respecting trading positions to a remote access terminal.

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 on 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 purpose of the proposed rule change is to effect a systems 
change and amend the Phlx's fee schedule to impose a $.10 per trade 
off-Exchange trade information fee and a $300 per month remote 
information access fee for Phlx specialist units, who choose to

[[Page 78526]]

utilize respective enhancements to the PACE System. These fees address 
the cost of, and demand for, these new interfaces, which offer 
important new risk management tools to Phlx specialists.
    $.10 Per Trade Off-Exchange Trade Information Fee. The first of the 
new enhancements provides certain real-time positions to Phlox 
specialist units. Specifically, it enhances the Exchange's proprietary 
risk management systems by allowing Phlx specialist units to obtain 
more complete data reflecting real-time positions for their respective 
trading accounts for DOT transactions by means of a real-time interface 
with the PACE System. The enhancement incorporates DOT trades on a 
real-time basis into the Phlx specialist unit's position reports, which 
are displayed electronically via the PACE System. This feature, 
including the interface, is voluntary.
    The proposed fee is being instituted to defray costs of 
establishing real-time DOT interfaces with various member 
organizations, providing trade information to Phlx specialist units as 
well as to cover costs of maintenance and operation.\5\ The real-time 
interface should contribute to enhancing the Phlx specialist unit's 
ability to track trading account positions by allowing more complete, 
time-sensitive position reports to be developed reflecting DOT 
transactions.
---------------------------------------------------------------------------

    \5\ As originally filed, the purpose section stated that the 
enhancement provided execution services to Phlx specialist units. 
The Exchange has clarified that the enhancement does not provide 
execution services to Phlx specialist units. Instead, the 
enhancement only provides trade information to Phlx specialist 
units, which the specialist units may then use as they see fit. As 
per telephone conversation between John Dayton, Assistant Secretary 
and Counsel, Phlx, and Heather Traeger, Attorney, SEC, Division of 
Marker Regulation, on December 7, 2000.
---------------------------------------------------------------------------

    $300 Per Month Remote Information Access Fee. The second of the new 
enhancements allows specialist units to view trading positions from a 
remote access terminal off the trading floor. The new feature provides 
real-time positions to the off-floor (or ``upstairs'' offices of Phlx 
specialist units via a PACE System dial-up connection. This enhancement 
will enable the upstairs office of the Phlx specialist units access to 
data reflecting real-time positions for their respective trading 
accounts with specific detail, including the security, the last sale of 
that security, the profit or loss of the position, and a total long 
and/or short dollar value. This enhancement incorporates trades on a 
real-time basis into the specialist unit's position reports, which are 
displayed electronically at a remote access terminal via a dial-up 
connection. This feature, which is voluntary,\6\ is a means for off-
floor principals of Phlx specialist units to gauge their unit's risk 
exposure.
---------------------------------------------------------------------------

    \6\ The Phlx confirmed that this feature is voluntary. Id.
---------------------------------------------------------------------------

    The proposed fee is being instituted to defray the costs of and 
demand for this risk management report as well as maintenance and 
operation of the dial-up connection service. The Exchange is choosing 
to charge a flat monthly fee for this service. The Exchange believes 
that a flat monthly fee is appropriate as the fee for the remote access 
feature reflects the cost of creating and maintaining a dial-up 
connection with the off-floor offices of the specialist. Information 
transmitted through this dial-up connection is substantially similar to 
the information currently received by the specialist unit on the floor 
of the Exchange. The remote access feature should contribute to 
enhancing the upstairs office's ability to track trading account 
positions by allowing more complete, time-sensitive position reports to 
be viewed by a principals of specialist units from off the floor.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b)(4) and (6)(5) of the Act \7\ in that it provides for the 
equitable allocation of reasonable dues, fees and other charges among 
its members and other persons using its facilities and promotes just 
and equitable principles of trade.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b)(4) and (b)(5).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

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

    The foregoing rule change, which (1) establishes or changes a due, 
fee, or other charge imposed by the Exchange and (2) effects a change 
in an existing order-entry or trading system of the Exchange that (i) 
does not significantly affect the protection of investors of the public 
interest; (ii) does not impose any significant burden on competition; 
and (iii) does not have the effect of limiting the access to or 
availability of the system, has become effective pursuant to Section 
19(b)(3)(A) of the Act \8\ and subparagraph (f)(2) and (f)(5) of Rule 
19b-4 thereunder.\9\ 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2) and (f)(5).
---------------------------------------------------------------------------

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, N.W., Washington, D.C. 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 also will be 
available for inspection and copying at the principal office of the 
Phlx. All submissions should refer to File No. SR-PHLX-00-99 and should 
be submitted by January 5, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
Margaret H. McFarland,
Deputy Secretary.
---------------------------------------------------------------------------

    \10\ 17 CFR 240.30-2(a)(12).
---------------------------------------------------------------------------

[FR Doc. 00-31995 Filed 12-14-00; 8:45 am]
BILLING CODE 8010-01-M