[Federal Register Volume 66, Number 250 (Monday, December 31, 2001)]
[Notices]
[Pages 67614-67615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-32081]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45185; File No. SR-Phlx-2001-113]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. Increasing the Equity Option Transaction Charge for 
Broker-Dealer

December 21, 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 18, 2001, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``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

    The Exchange proposed to amend its schedule of dues, fees, and 
charges to increase its equity option transaction charge on members for 
off-floor broker-dealer orders\3\ routed to the Exchange from $0.20 to 
$0.25. The Exchange intends to implement this fee on transactions 
settling on or after January 2, 2002.\4\
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    \3\ For purposes of the equity option transaction charge, the 
Exchange defines the term ``broker-dealer charge'' as a charge that 
is applied to members for orders, entered from other than the floor 
of the Exchange, for any account (i) in which the holder of 
beneficial interest is a member or non-member broker-dealer or (ii) 
in which the holder of beneficial interest is a person associated 
with or employed by a member or non-member broker-dealer. This 
includes orders for the account of a Registered Options Trader 
(``ROT'') entered from off-floor. See Securities Exchange Act 
Release No. 43558 (November 14, 2000), 65 FR 69984 (November 21, 
2000) (SR-Phlx-00-85).
    \4\ The Exchange states that this fee will continue to be 
eligible for the monthly credit of up to $1,000 to be applied 
against certain fees, dues and charges and other amounts owed to the 
Exchange by certain members. See Securities Exchange Act Release No. 
44292 (May 11, 2001), 66 FR 27715 (May 18, 2001) (SR-Phlx-2001-49).
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    The text of the proposed rule change is available at the Office of 
the Secretary, the Phlx, 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 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 
Item 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
    Currently, the Exchange imposes a fee on its members for off-floor 
broker-dealer orders routed to the Exchange. This category includes 
ROTs that trade from off-floor and broker-dealers that route orders 
through firm, customer, or market maker accounts carried by a member 
clearing firm. This category does not include firm/proprietary 
orders.\5\ The Exchange states that all other equity option transaction 
charges will remain unchanged.
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    \5\ According to the Exchange, a firm/proprietary transaction or 
comparison charge applies to members for orders for the proprietary 
account of any member or non-member broker-dealer that derives more 
than 35 percent of its annual, gross revenues from commissions and 
principal transactions with customers. See Securities Exchange 
Release No. 43558 (November 14, 2000), 65 FR 69984 (November 21, 
2000) (SR-Phlx-00-85).
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    The Exchange states that the purpose of the proposed rule change is 
to generate additional revenue by increasing the fee imposed on members 
for off-floor broker-dealer orders routed to the Exchange. Thus, the 
broker-dealer

[[Page 67615]]

option transaction charge will be increased from $0.20 to $0.25.
(2) Statutory Basis
    The exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\6\ in general, and furthers the 
objectives of section 6(b)(4),\7\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members. The Exchange believes the proposal is 
equitable and reasonable because the proposed broker-dealer equity 
option transaction charge is not substantially higher than other fees.
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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.

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 \8\ and rule 19b-
4(f)(2) hereunder.\9\ 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. The Exchange has 
stated that it intends to implement this fee on transactions settling 
on or after January 2, 2002.
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    \8\ 15 U.S.C. 78(s)(b)(3)(A)(ii).
    \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 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-2001-113 and 
should be submitted by January 22, 2002.

    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. 01-32081 Filed 12-28-01; 8:45 am]
BILLING CODE 8010-01-M