[Federal Register Volume 67, Number 59 (Wednesday, March 27, 2002)]
[Notices]
[Pages 14760-14761]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-7328]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45606; File No. SR-PCX-2002-14]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. 
Relating to Changes in Marketing Fees

March 20, 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 28, 2002, the Pacific Exchange, Inc. (``PCX'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I, II and III below, which the PCX 
has prepared. 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 PCX is proposing to change its marketing fee for certain 
options and to declare a marketing fee for recently listed options. A 
copy of the proposed new schedule of fees is available at the PCX 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 PCX included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it had received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The PCX has prepared summaries, set forth in Sections A, 
B, and C below, of the most significant aspects of those statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

Purpose
    The PCX recently adopted a payment-for-order-flow program under 
which it charges a marketing fee ranging from $0 to $1.00 per contract 
on a per-issue basis.\3\ The PCX segregates the funds from this fee by 
trading post and makes the funds available to LMMs for their use in 
attracting orders in the options traded at the posts. The PCX charges 
the marketing fees as set forth in the Schedule of Rates.
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    \3\ See Securities Act Release No. 44830 (September 21, 2001), 
66 FR 49728 (September 28, 2001) (SR-PCX-2001-37).
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    The PCX is proposing to change the marketing fee for certain 
options and to adopt new marketing fees for newly listed options 
beginning at the commencement of the March 2002 trade month and 
continuing until further notice. The PCX proposes to change the amounts 
of the fees that it charges for transactions in the options that are 
included in the proposed Schedule of Rates. Only the amount of the fee 
is being changed. Any fees currently being charged for transactions in 
options that are not listed in this amendment to the Schedule of Rates 
would not be affected by the proposed rule change. The PCX believes 
that its proposed rule change is reasonable and equitable because it is 
designed to enable it to compete with other markets in attracting 
options business.
Basis
    The Exchange believes that the proposal is consistent with section 
6(b)(4) of the Act in that it provides for the equitable allocation of 
reasonable dues, fees, and other charges among its members.

[[Page 14761]]

B. Self-Regulatory Organization's Statement on Burden on Competition

    The PCX does not believe that the proposed rule change will impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

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

    The PCX neither solicited nor received written comments on the 
proposed rule change.

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

    Because the PCX has designated the foregoing as a fee change 
pursuant to section 19(b)(3)(A) of the Act \4\ and Rule 19b-4(f)(2) 
thereunder,\5\ the proposal has become effective immediately upon 
filing with the Commission. At any time within 60 days after the filing 
of the proposed rule change, the Commission may summarily abrogate the 
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.
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    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f).
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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 the filing will also be 
available for inspection and copying at the principal office of the 
PCX. All submissions should refer to File No. SR-PCX-2002-14 and should 
be submitted by April 17, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-7328 Filed 3-26-02; 8:45 am]
BILLING CODE 8010-01-P