[Federal Register Volume 66, Number 206 (Wednesday, October 24, 2001)]
[Notices]
[Pages 53822-53823]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-26726]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44947; File No. SR-Phlx-2001-90]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc., Relating to Registration Fees for Registered 
Representatives

October 17, 2001.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on October 5, 2001, the Philadelphia Stock Exchange, Inc. (``Plx'' 
and ``Exchange'') filed with the Securities and Exchange Commission 
(the ``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

    Pursuant to Rule 19b-4 under the Act, the Phlx proposes to amend 
its fee schedule for Registered Representative registration. 
Specifically, the Phlx proposes to increase the initial Registered 
Representative registration fee from $45 to $55 and to increase both 
the maintenance and transfer registration fee for Registered 
Representatives from $45 to $50. The proposed effective date of the 
increase is January 1, 2002.
    The text of the proposed rule change appears below. Next text is 
italics; deletions are in brackets.

Phlx Fee Schedule

* * * * *

Registered Representative Registration

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                                                 Delections    New text
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Initial.......................................     [$45.00]       $55.00
Maintenance...................................   \1\ 45.00]    \1\ 50.00
Transfer......................................      [45.00]       50.00
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\1\ Annual.

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 
Items 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 the proposed rule change is to increase the 
Exchange's initial Registered Representative registration fee from $45 
to $55 and to increase its maintenance and transfer Registered 
Representative registration fee from $45 to $50. These fees, which were 
adopted in 1993,\3\ and subsequently adjusted in 1995;\4\ 1997,\5\ 1999 
\6\ and 2000 \7\ are payable by member organizations that apply for, 
maintain, and transfer Registered Representative registration.\8\ The 
Proposed fee increases will be effective January 1, 2002. The Phlx 
intends that, on its behalf, the National Association of Securities 
Dealers, Inc. (``NASD'') will bill for the year 2002 fees in November 
2001 and will thereafter collect the fees for the Exchanges.\9\ The 
proposed fees will apply to year 2002 registrations. Any initial 
registration in 2001 will continue to be subject to the current $45 
initial registration fee. Any maintenance and transfer fees incurred 
for calendar year 2001 will continue to be subject to the $45 
maintenance or transfer fee. The purpose of the proposed rule change is 
to address the increased costs associated with maintaining surveillance 
and regulatory programs in an increasingly sophisticated trading 
environment. The Exchange continues to believe that strong surveillance 
and regulatory

[[Page 53823]]

programs are essential to the ability of the Exchange to maintain a 
fair and orderly market for the investment community.
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    \3\ See Securities Exchange Act Release No. 32833 (September 14, 
1993), 58 FR 48922 (September 20, 1993) (order approving File No. 
SR-Phlx-93-24).
    \4\ See Securities Exchange Act Release No. 36348 (October 14, 
1993), 58 FR 48922 (September 20, 1993) (order approving File No. 
SR-Phlx-93-24).
    \5\ See Securities Exchange Act Release No. 39044 (September 10, 
1997), 62 FR 48914 (September 17, 1997) (notice of filing and 
immediate effectiveness of File No. SR-Phlx-97-41).
    \6\ See Securities Exchange Act Release No. 42122 (November 10, 
1999), 64 FR 63098 (November 18, 1999) (notice of filing and 
immediate effectiveness of File No. SR-Phlx-99-34).
    \7\ See Securities Exchange Act Release No. 43547 (November 13, 
2000), 65 FR 69980 (November 21, 2000) (notice of filing and 
immediate effectiveness of File No. SR-Phlx-00-95).
    \8\ The Phlx originally implemented the fees to offset 
regulatory costs based on the number of Registered Representative 
registrations maintained by member organizations.
    \9\ The Exchange has represented that initial, transfer, and 
maintenance Registered Representative registration fees 
traditionally have been billed and collected by the NASD. Under the 
proposal, as noted above, the NASD will continue to bill for and 
collect these fees. Telephone conversation between Murray L. Ross, 
Vice President and Security, Phlx, to Yvonne Fraticelli, Special 
Counsel, Division of Market Regulation, Commission, on October 15, 
2001.
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    According to the Phlx, the general costs associated with the 
Exchange's surveillance and regulatory programs have continued to rise. 
The Phlx notes that since the last Registered Representative fee 
increase in 2000,\10\ costs associated with the Exchange's surveillance 
and regulatory programs have increased. The Phlx attributes the 
increase in costs to, among other things, inflationary and competitive 
pressures upon the cost of staffing, equipment, and computer 
technology, as well as the expansion of the Exchange surveillance and 
regulatory programs in response to increased market share. Moreover, 
the Exchange has listed, and will likely continue to list, new issues 
and products, which trigger significant additional surveillance and 
regulatory costs.
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    \10\ See supra note 7.
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(2) Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\11\ in general, and furthers the 
objectives of Section 6(b)(4),\12\ in particular, in that is provides 
for the equitable allocation of reasonable dues, fees, and offer 
charges among its members and other persons using its facilities.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 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, 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 
charge imposed by the Exchange and, therefore, has become effective 
upon filing pursuant to Rule 19(b)(3)(A)(ii) of the Act \13\ and Rule 
19b-4(f)(2) hereunder.\14\ The Exchange intends to implement the fees 
effective as of January 1, 2002. 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 furtherance of the purpose of 
the Act.
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    \13\ 15 U.S.C. 78(s)(b)(3)(A)(ii).
    \14\ 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. 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-2001-90 and 
should be submitted by November 14, 2001.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-26726 Filed 10-23-01; 8:45 am]
BILLING CODE 8010-01-M