[Federal Register Volume 67, Number 51 (Friday, March 15, 2002)]
[Notices]
[Pages 11738-11739]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-6263]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45523; File No. SR-Phlx-2002-12]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by 
the Philadelphia Stock Exchange, Inc. Proposing To Adopt an Application 
Fee for Equity Trading Permits

March 8, 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 February 11, 2002, 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 and 
II below, which Items have been prepared by the Exchange. The Exchange 
filed Amendment No. 1 on March 1, 2002.\3\ The Commission is publishing 
this notice to solicit comments on the proposed rule change, as 
amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ On March 1, 2002, the Exchange filed a new Form 19b-4, which 
replaces and supercedes the original filing in its entirety 
(``Amendment No. 1'').
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange proposes to apply a $200 Application Fee to applicants 
for Equity Trading Permits (``ETPs'') who, at the time application is 
made, are not Exchange members or foreign currency options (``FCO'') 
participants. The Exchange states that it would not charge the $200 ETP 
Application Fee to ETP applicants who, at the time the application is 
made, are Exchange members or FCO participants. The text of the 
proposed rule change is available at the Phlx's Office of the Secretary 
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 III 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
    On January 9, 2002, the Commission approved a proposed rule change 
to adopt Exchange Rule 23 which provides for ETPs.\4\ The Exchange 
anticipates commencing an ETP program in the near future. Accordingly, 
the purpose of the proposed rule change is to amend the Exchange's 
Schedule of Dues, Fees and Charges, to establish that a $200 ETP 
Application Fee will be charged to applicants for ETPs who, at the time 
application is made, are not Exchange members or FCO participants.\5\ 
The Exchange proposes this new ETP application fee to defray the 
Exchange's administrative costs of review and processing such 
applications.
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    \4\ See Securities Exchange Act Release No. 45254 (January 9, 
2002), 67 FR 2720 (January 18, 2002) (approving SR-Phlx-00-02 and 
SR-Phlx-00-03).
    \5\ The Exchange has separately filed pursuant to section 
19(b)(3)(A) of the Act, SR-Phlx-2002-10, a proposed rule change 
amending Appendix A to its Schedule of Dues, Fees and Charges to 
establish fees applicable to ETP holders and ETP organizations. See 
Securities Exchange Act Release No. 44213 (April 23, 2001), 66 FR 
22058 (May 2, 2001) (SR-Phlx-2001-01). That filing does not address 
the $200 ETP Application Fee that is proposed here. The Exchange now 
files this proposed rule change pursuant to section 19(b)(2) of the 
Act.
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    Exchange Rule 23(b) provides that ETP holders must meet all 
qualifications that are required for membership in the Exchange. It 
provides that applications must be approved by the Exchange, and that 
applicants who are not Exchange members must be admitted by the 
Exchange. Exchange Rule 23(b) also states that the admissions process 
for applicants who are not members of the Exchange will be the same as 
that required for membership applicants for admission, and that the 
decision to grant or deny an application for admission will be made by 
the Admissions Committee. The Exchange noted in its filing proposing 
Exchange Rule 23, that ETP applicants who are members of the Exchange 
when they apply for an ETP will have already received a favorable 
admissions determination by the Exchange's Admissions Committee when 
they became a member. Consequently, they will not be charged the ETP 
Application Fee. The Exchange now proposes that a $200 ETP Application 
Fee apply to ETP applicants who are not members or FCO participants at 
the time of application in order to defray the administrative costs 
associated with processing applications made by individuals who have 
not previously been evaluated by the Exchange as applicants for 
membership or FCO participation.
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) of the Act, \7\ in particular, by 
providing for the equitable allocation of reasonable dues, fees and 
other charges among its members and issuers and other persons using its 
facilities. Specifically, the Exchange believes that the $200 ETP 
Application Fee is reasonable and equitable, because it is charged to 
all ETP applicants who are not members or FCO participants.
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    \6\ 15 U.S.C 78f(b).
    \7\ 15 U.S.C 78f(b)4.
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    In addition, the Exchange believes that the proposed rule change is 
consistent with the requirements of section 6(b)(5) of the Act,\8\ in 
that it is designed to remove impediments to and perfect the mechanism 
of a free and open market and a national market system, and is not 
designed to permit unfair discrimination between customers, issuers, 
brokers or dealers. The Exchange believes that application of the $200 
ETP Application Fee to ETP applicants who are not members or FCO 
participants when they apply will defray administrative costs involved 
in the review and processing of an ETP application when made by an 
individual with respect to whom this has not previously been done in 
the

[[Page 11739]]

context of an application for a membership or FCO participation.
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    \8\ 15 U.S.C 78f(b)(5).
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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 solicited or received with respect to the 
proposed rule change.

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 Section 19(b)(3)(A)(ii) of the Act \9\ and Rule 
19b-4(f)(2) hereunder.\10\ At any time within 60 days of the filing of 
Amendment No. 1 to the 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.
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    \9\ 15 U.S.C. 78(s)(b)(3)(A)(ii).
    \10\ 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, as amended, 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 at the Commission's Public Reference Room. 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-2002-12 and should be submitted by April 5, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\

    \11\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-6263 Filed 3-14-02; 8:45 am]
BILLING CODE 8010-01-U