[Federal Register Volume 66, Number 164 (Thursday, August 23, 2001)]
[Notices]
[Pages 44394-44395]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-21308]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44715; File No. SR-SCCP-2001-07]


Self-Regulatory Organizations; Stock Clearing Corporation of 
Philadelphia; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to a Waiver of PACE Trade Recording Fees

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on May 29, 2001, the Stock 
Clearing Corporation of Philadelphia (``SCCP'') filed with the 
Securities and Exchange Commission (``Commission'') and on August 6, 
2001, amended the proposed rule change as described in Items I, II, and 
III below, which items have been prepared primarily by SCCP. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested parties.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change amends SCCP's fee schedule to waive trade 
recording fees for orders that are electronically routed to the 
Philadelphia Stock Exchange, Inc. (``Phlx'') through Phlx's automated 
communication and execution system (``PACE'').\2\ The waiver includes 
the Nasdaq-100 Index Tracking Stock\SM\ (``QQQ'') PACE user fees 
applicable to QQQ orders delivered through PACE. In addition, the 
proposal amends SCCP's fee schedule to codify the current fee schedule 
and to make minor technical amendments to clarify certain charges that 
appear on the schedule. The proposed waiver of fees was implemented on 
June 1, 2001.
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    \2\ PACE is Phlx's order routing, delivery, execution, and 
reporting system for its equity trading floor.
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule

    In its filing with the Commission, SCCP included statements 
concerning the purpose of and statutory basis for the proposed rule 
change. The text of these statements may be examined at the places 
specified in Item IV below. SCCP has prepared summaries, set forth in 
sections (A), (B), and (C) below, of the most significant aspects of 
such statements.\3\
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    \3\ The Commission has modified parts of these statements.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The purpose of the proposed rule change is to waive SCCP trade 
recording fees for orders that are electronically routed to Phlx 
through PACE.\4\ Presently, orders routed through PACE, including QQQ 
orders, are charged a PACE trade recording fee of $0.30 per side 
(except for certain orders executed on the opening).\5\
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    \4\ Securities Exchange Act Release No. 44381 (June 1, 2001), 66 
FR 31264 (June 11, 2001) (SR-Phlx-2001-57) provides for a waiver of 
Phlx equity transaction value charges for orders that are 
electronically routed to Phlx through PACE.
    \5\ Securities Exchange Act Release No. 44278 (May 8, 2001), 66 
FR 27193 (May 16, 2001) (SR-SCCP-2001-05), which eliminated certain 
specialist fees for transactions with PACE orders entered before the 
opening.
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    SCCP states that the proposed amendment is designed to promote 
SCCP's reputation as a cost effective clearing organization, which 
should, in turn, encourage additional order flow to Phlx. In addition, 
SCCP proposes to amend its fee schedule to make minor, technical 
amendments to the schedule.\6\ Among other things, reference to VTS 
trades will be changed to ``eVWAP'' trades.\7\
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    \6\ Although SCCP intended to implement SR-SCCP-2001-05 (the 
waiver of certain specialist fees for transactions with PACE orders 
entered before the opening) effective May 1, 2001, it has not done 
so because the fee schedule attached to that filing erroneously 
included asterisks indicating a waiver of two other fees. 
Specifically, SCCP did not intend to waive the trade recording fee 
for regular trades or PACE trades because (1) trade recording fees 
for PACE trades are paid by PACE users rather than specialists, who 
were the targets of SCCP's fee waivers in that rule change, and (2) 
trade recording fees for regular trades do not apply to PACE trades 
at all. Therefore, SCCP amended this filing to correct the errors in 
SR-SCCP-2001-05. Letters from Diana Tenenbaum, SCCP, dated August 3, 
2001, to Jerry Carpenter Assistant Director, Commission.
    \7\ Securities Exchange Act Release No. 42702 (April 19, 2000), 
65 FR 24528 (April 26, 2000) (SR-Phlx-00-19). ``eVWAP'', formerly 
known as ``VWAP'' and ``VTS'', is the Volume Weighted Average Price 
trading system (``VTS'' stands for VWAP Trading System).
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    For these reasons, SCCP believes that the proposed rule change is 
consistent with Section 17A(b)(3)(D) of the Act \8\ which requires that 
the rules of a registered clearing agency provide for equitable 
allocation of reasonable dues, fees, and other charges for services 
which it provides to its participants.
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    \8\ 15 U.S.C. 78q-1(b)(3)(D).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    SCCP 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

    Because the foregoing rule change establishes or changes a due, 
fee, or other charge imposed by SCCP, it has become effective pursuant 
to Section 19(b)(3)(A)(ii) of the Act \9\ and Rule 19b-4(f)(2) 
thereunder.\10\ At any time within sixty 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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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 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 Section, 450 Fifth Street, NW., 
Washington, DC 20549. Copies of such filing will also be available for 
inspection and copying at SCCP. All submissions should refer to the 
File No. SR-SCCP-2001-07 and should be submitted by September 13, 2001.


[[Page 44395]]


    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 01-21308 Filed 8-22-01; 8:45 am]
BILLING CODE 8010-01-M