[Federal Register Volume 66, Number 112 (Monday, June 11, 2001)]
[Notices]
[Pages 31264-31265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-14586]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44381; File No. SR-Phlx-2001-57]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. Waiving Equity Transaction Value Charges for PACE Orders

June 1, 2001.
    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 May 21, 2001, 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 
Phlx. 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 Phlx proposes to waive equity transaction value charges for 
orders that are electronically routed to the Exchange through PACE.\3\ 
The proposed waiver of fees will be implemented on June 1, 2001.
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    \3\ PACE is the acronym for the Exchange's Automated 
Communication and Execution System. It is the Exchange's order 
routing, delivery, execution and reporting system for its equity 
trading floor. See Exchange Rule 229.
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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, 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 waive equity 
transaction value charges for orders that are electronically routed to 
the Exchange through PACE.\4\ Presently, orders routed to the Exchange 
through PACE are charged an equity transaction value charge, which is 
subject to a discount schedule based on the total value of monthly 
transactions.\5\ Accordingly, all related PACE trade discounts and 
credits would no longer apply.
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    \4\ Specialists would continue to be subject to the PACE 
Specialist Charge of $.20 per specialist trade against PACE 
executions (excluding PACE trades on the opening). Telephone 
conversation between Diana Tenenbaum, Counsel, Phlx, and Sonia 
Patton, Attorney, Division of Market Regulation, Commission (May 29, 
2001).
    \5\ If the monthly transaction value of a particular customer is 
between $0-$25 million, a rate of $0.14 for every $1,000 of value 
will be charged. The rate decreases as the amount of the monthly 
transaction value increases. PACE users receive trade discounts 
based on trade size.
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    The proposed amendment is designed to promote the Exchange's 
reputation as a cost-effective trading forum for PACE customers and 
traders transacting equity business. Furthermore, the Exchange believes 
that the proposed amendment should encourage electronic order flow to 
the Exchange, which in turn should promote a more liquid equities 
market.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and with Section 
6(b)(4),\7\ in particular, by providing for the equitable allocation of 
reasonable dues, fees and other charges among participants. Eliminating 
certain charges for PACE transactions (1) alleviates a financial burden 
on PACE users and thus encourages the transaction of equities by the 
investing public, and (2) promotes competition among the various 
exchanges.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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.

[[Page 31265]]

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 proposed rule change has been designated as a fee 
change pursuant to Section 19(b)(3)(A) \8\ of the Act and Rule 19b-
4(f)(2) \9\ thereunder. Accordingly, the proposal will take effect upon 
filing with the Commission. 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.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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-2001-57 and 
should be submitted July 2, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-14586 Filed 6-8-01; 8:45 am]
BILLING CODE 8010-01-M