[Federal Register Volume 67, Number 16 (Thursday, January 24, 2002)]
[Notices]
[Pages 3525-3526]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-1704]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45289; File No. SR-Phlx-2001-117]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc., Relating to an Increase to the Exchange Technology Fee

January 16, 2002.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange 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 (``SEC'' or ``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 proposes to amend its schedule of dues, fees, and 
charges to increase its technology fee applicable to all members and 
foreign currency options participants not also holding legal title to a 
Phlx membership from the current charge of $100.00 per month to $150.00 
per month. The text of the proposed rule change is available at the 
principal offices of 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 the basis for, the proposed rule change 
and discussed any comments it received on the proposed rule change. The 
text of

[[Page 3526]]

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 charges a monthly technology fee on its 
members and foreign currency options participants that are not also 
holding legal title to a Phlx membership. This charge of $100.00 per 
month was instituted in March of 1997 at the rate of $100.00 to cover 
system software modifications, specific systems development 
(maintenance) costs, increased costs associated with the Securities 
Industry Automation Corporation, and the Options Price Reporting 
Authority communication changes and ongoing system maintenance 
charges.\3\ Over the four and one half years since the technology fee 
was instituted, the complexity and expansion of the software and 
hardware, such as LANs, servers, and communications systems (both 
wireless and hardwired/tethered) has increased to serve the membership 
and the investing public. The Exchange's Board believes an increase to 
the technology fee is reasonable and necessary to support the ongoing 
efforts and deployment of technology on the trading floors to 
facilitate trading.
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    \3\ See Securities Exchange Act Release No. 38394 (March 12, 
1997), 62 FR 13204 (March 19, 1997).
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    The technology fee was instituted to capture costs associated with 
system development costs associated with new risk management systems, 
order handling rule revisions, specialized quote feeds, and new 
products. Over the past four plus years, the Exchange's software and 
hardware systems have grown in order to process increased trading, 
resulting in more systems maintenance costs. The proposed increase in 
the technology fee is necessary to allow the Exchange to continue to 
operate its automated systems and compete with the other market centers 
in offering new technology features to facilitate trading.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\4\ in general, and furthers the 
objectives of section 6(b)(4) of the Act,\5\ in particular, in that 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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    \4\ 15 U.S.C. 78f(b).
    \5\ 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 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended.

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

    Written comments were neither solicited nor received.

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

    The foregoing rule change has become effective pursuant to section 
19(b)(3)(A) of the Act \6\ and Rule 19b-4(f)(2) thereunder,\7\ as 
establishing or changing a due, fee, or other charge. 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 purposes of the Act.\8\
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(2).
    \8\ See Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C).
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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. 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-2001-117 and 
should be submitted by February 14, 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. 02-1704 Filed 1-23-02; 8:45 am]
BILLING CODE 8010-01-M