[Federal Register Volume 66, Number 249 (Friday, December 28, 2001)]
[Notices]
[Pages 67346-67347]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-31871]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45167; File No. SR-PCX-2001-49]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. 
Relating to Changes in Marketing Fees

December 18, 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 December 3, 2001, the Pacific Exchange, Inc. (``PCX'') filed with 
the Security and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I, II and III below, which the PCX has 
prepared. 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 PCX proposes to change its marketing fee for certain options 
and to declare a marketing fee for recently listed options. A copy of 
the proposed new Schedule of Fees and Charges for Exchange Services is 
available at the PCX and at the Commission.

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 PCX included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it had received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The PCX has prepared summaries, set forth in Sections A, 
B, and C below, of the most significant aspects of the statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The PCX recently adopted a payment-for-order-flow program under 
which it charges a marketing fee ranging from $0 to $1.00 per contract 
on a per-issue basis.\3\ The PCX segregates the funds from this fee by 
trading post and makes the funds available to Lead Market Makers for 
their use in attracting orders in the options traded at the posts. The 
PCX charges the marketing fees in the amounts set forth in its Schedule 
of Fees and Charges for Exchange Services, hereinafter referred to as 
the ``Schedule of Rates.''
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    \3\ See Securities Exchange Act Release No. 44830 (September 21, 
2001), 66 FR 49728 (September 28, 2001) (SR-PCX-2001-37).
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    The PCX proposes to amend its Schedule of Rates in order to change 
the marketing fee that it charges for certain options and to adopt new 
marketing fees for newly listed options, beginning with the start of 
the December trade month and continuing until further notice. Only the 
amount of the fee is being changed.\4\ The PCX believes that the

[[Page 67347]]

proposed rule change has been designed to enable the PCX to compete 
with other markets in attracting options business, and that the 
proposed rule change is therefore reasonable and equitable.
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    \4\ The PCX proposes to change only the amounts of the fees that 
it charges for transactions in the options that are included in the 
proposed amended Schedule of Rates. Any fees currently being charged 
for transactions in options that are not listed in this amendment to 
the Schedule of Rates would not be affected by the proposed rule 
change. Telephone conversation between Mai Shiver, Senior Attorney, 
PCX, and Patrick Joyce, Special Counsel, Division of Market 
Regulation, Commission, on December 10, 2001.
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2. Basis
    The PCX believes that the proposed rule change is consistent with 
Section 6(b) of the Act,\5\ particularly Section 6(b)(4) of the Act,\6\ 
in that it provides for the equitable allocation of reasonable dues, 
fees, and other charges among its members.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The PCX does not believe that the proposed rule change will impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

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

    The PCX neither solicited nor received any written comments on the 
proposed rule change.

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

    Because the PCX has designated the foregoing as a fee change 
pursuant to Section 19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(2) 
thereunder,\8\ the proposal has become effective immediately upon 
filing with the Commission. At any time within 60 days after the filing 
of the proposed rule change, the Commission may summarily abrogate the 
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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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f).
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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, 450 Fifth Street, NW., Washington, 
DC 20549. Copies of such filing will also be available for inspection 
and copying at the principal office of the PCX. All submissions should 
refer to File No. SR-PCX-2001-49 and should be submitted by January 18, 
2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-31871 Filed 12-27-01; 8:45 am]
BILLING CODE 8010-01-M