[Federal Register Volume 67, Number 7 (Thursday, January 10, 2002)]
[Notices]
[Pages 1388-1389]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-598]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45233; File No. SR-Phlx-2001-116]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. To Amend Its Schedule of Dues, Fees and Charges To 
Increase the Equity Floor Brokerage Assessment

January 3, 2002.
    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 20, 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 Phlx proposes to amend its schedule of dues, fees and charges 
to increase the equity floor brokerage assessment from 1.25% of net 
floor brokerage income to 5%. The increased equity floor brokerage 
assessment fee will be implemented on transactions settling on or after 
January 2, 2002. Previously, the Exchange charged a 5% equity floor 
brokerage assessment fee but offered equity specialist units that also 
conducted floor brokerage business on the Exchange a discounted rate on 
the assessment at 1.25%. That discounted rate was subsequently extended 
to all equity floor brokerage.\3\
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    \3\ See Securities Exchange Act Release No. 39325 (November 13, 
1997), 62 FR 62395 (November 21, 1997).
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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 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 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 the 
Statutory Basis for, the Proposed Rule Change

(1) Purpose
    Currently, the Exchange assesses a monthly fee on the amount of 
money a floor broker bills to its customers each month for floor 
brokerage services with respect to equity securities. The current rate 
is 1.25% of net floor brokerage income and has been in effect for over 
four years. Given the costs of operating the Exchange's equities 
trading floor, the Exchange believes that it is now necessary to 
increase the equity floor brokerage assessment fee to 5%. The Exchange 
notes that prior to reducing the equity floor brokerage assessment fee 
to 1.25% in November 1997,\4\ the rate was 5% for floor brokerage units 
only and specialist units that conducted a floor brokerage business 
were charged a discounted rate of 1.25%. Furthermore, the Exchange 
notes that the increased rate of 5% is the same rate that is currently 
charged on equity and index options floor brokerage.
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    \4\ Id.
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(2) Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) \5\ of the Act in general and, in particular, with 
section 6(b)(4) \6\ of the Act, because it provides for the equitable 
allocation of reasonable dues, fees and other charges among its members 
and other persons using its facilities.
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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 Phlx 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, which establishes or changes a due, fee 
or other charge imposed by the Exchange, has become effective pursuant 
to section 19(b)(3)(A) \7\ of the Act and subparagraph (f)(2) of Rule 
19b-4 thereunder.\8\ 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 the 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)(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

[[Page 1389]]

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-2001-116 and should be submitted by January 31, 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. 02-598 Filed 1-9-02; 8:45 am]
BILLING CODE 8010-01-M