[Federal Register Volume 67, Number 10 (Tuesday, January 15, 2002)]
[Notices]
[Pages 2002-2003]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-943]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45252; File No. SR-Amex-2001-26]


Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Granting Approval to Proposed Rule Change and Amendment No. 1 Thereto 
Relating to an Increase in the Exchange Regulatory Fee

January 8, 2002.
    On May 7, 2001, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to section 19 (b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend the Amex Equity Fee Schedule to increase 
the regulatory fee from .00005 x Total Value to .000075 x Total Value 
for certain orders in Portfolio Depositary Receipts, Index Fund Shares, 
and Trust Issued Receipts (collectively, the ``Products'') entered 
electronically into the Amex Order File from off the Floor (``System 
Orders'') by a member or member organization trading as an agent for 
the account of a non-member competing market maker.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s (b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

    The proposed rule change was published for comment in the Federal 
Register on June 18, 2001.\3\ The Commission received no comments on 
the proposal. On December 12, 2001, the Amex filed an amendment to the 
proposed rule change.\4\ In Amendment No. 1, the Amex made a technical 
amendment to the proposed rule change by further clarifying its purpose 
for increasing the Exchange's regulatory fee that does not need to be 
published for comment. In Amendment No. 1, the Exchange states that the 
regulatory fee increase has been put in place to ensure that the Amex 
has the appropriate resources to provide the regulatory, operational, 
and business development function necessary to meet the increasing 
demands of a complex and competitive marketplace.\5\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 44410 (June 12, 
2001), 66 FR 32852.
    \4\ See letter from Michael J. Ryan, Jr., Executive Vice 
President & General Counsel, Amex, to Katherine England, Assistant 
Director, Division of Market Regulation, Commission, dated December 
11, 2001 (``Amendment No. 1'').
    \5\ Specifically, the Amex states that the Exchange continues to 
make heavy investments in: technologies to support the efficient 
trading of Exchange Traded Funds (``ETFs'') and HOLDRS on the 
Exchange; product development to bring new products to market; and 
the regulation of the EFT and HOLDRs markets. The Exchange believes 
that non-member competing market markers receive the most benefit 
from trading ETFs and HOLDRs on the Amex, with associated Amex 
technological enhancements and regulatory structure. The Exchange 
believes that the fee increase will support the infrastructure 
relied upon by the broader marketplace including competitive 
exchanges and market participants. Id.
---------------------------------------------------------------------------

    The Commission notes that the proposed rule change allows for 
disparate treatment of competing market makers in that it increases the 
regulatory fee for System Orders in the Products by a member or member 
organization trading as an agent for the account of a non-member.\6\ 
However, the Commission notes that under the Amex's current fee 
schedule, orders in the Products by a member or member organization 
trading as an agent for the account of a non-member were not entitled 
to the same treatment as other orders in the fee schedule in that they 
were not exempt from the regulatory fee. This proposed rule change does 
not alter this result. Furthermore, the Commission believes that the 
Intermarket Trading System (``ITS'') will continue to provide an 
alternative means by which non-member competing market makers can 
access the Amex. ITS provides an avenue for non-member competing market 
makers to interact with trading interests on the Amex, fee-free.
---------------------------------------------------------------------------

    \6\ The Commission does not intend this proposal to establish a 
precedent to permit a primary market to make distinctions in the 
treatment of orders on its Floor as a means to discriminate unfairly 
against its competitors.
---------------------------------------------------------------------------

    For these reasons, the Commission finds that the proposed rule 
change and Amendment No. 1 are consistent with the requirements of the 
Act and the rules and regulations thereunder

[[Page 2003]]

applicable to a national securities exchange.\7\ In particular, the 
Commission finds that the proposed rule change and Amendment No. 1 are 
consistent with section 6(b)(4) of the Act \8\ in that it provides for 
the equitable allocation of reasonable dues, fees, and other charges 
among Exchange members, issuers, and other persons using its 
facilities.
---------------------------------------------------------------------------

    \7\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to section 19 (b)(2) of the Act 
\9\, that the proposed rule change (File No. SR-Amex-2001-26) and 
Amendment No. 1 be, and it hereby is, approved.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
---------------------------------------------------------------------------
pursuant to delegated authority.\10\

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-943 Filed 1-14-02; 8:45 am]
BILLING CODE 8010-01-M