[Federal Register Volume 67, Number 74 (Wednesday, April 17, 2002)]
[Notices]
[Pages 18962-18963]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-9311]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45727; File No. SR-Amex-2002-08]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment Nos. 1 and 2 
Thereto by the American Stock Exchange LLC Relating to Specialist Unit 
Fees

April 10, 2002.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on February 7, 2002, the American Stock Exchange LLC (``Exchange'' 
or ``Amex'') 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 Amex. On March 
13, 2002, the Amex submitted Amendment No. 1 to the proposed rule 
change.\3\ On March 18, 2002, the Amex submitted Amendment No. 2 to the 
proposed rule change.\4\ 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\ See letter from Geraldine Brindisi, Vice President and 
Corporate Secretary, Amex, to Nancy J. Sanow, Assistant Director, 
Division of Market Regulation (``Division''), Commission, dated 
March 12, 2002 (``Amendment No. 1''). In Amendment No. 1, the Amex: 
(1) Removed its discretion to waive all or a portion of the proposed 
fee; (2) described its existing license fees and their application; 
(3) explained that the proposed fee is intended to recoup costs 
incurred by the Exchange; (4) represented that the proposed fee will 
be imposed on any security traded on the Exchange, whether listed or 
traded pursuant to unlisted trading privileges; and (5) asserted 
that the proposed fee is not intended to cover any form of payment 
for order flow.
    \4\ See letter from Claire McGrath, Amex, to Nancy J. Sanow, 
Assistant Director, Division, Commission, dated March 14, 2002 
(``Amendment No. 2''). In Amendment No. 2, the Amex added rule text 
and a made a conforming change to the purpose section stating that 
it would not pass through any proposed fee to a specialist unit 
allocated a security if the Exchange imposes a license fee on such 
specialist unit on a per transaction basis with respect to trading 
in the same security. The Amex also made a technical correction to 
the purpose section. For purposes of calculating the 60-day period 
within which the Commission may summarily abrogate the proposed rule 
change under section 19(b)(3)(C) of the Act, the Commission 
considers that period to commence on March 18, 2002, the date the 
Amex filed Amendment No. 2. See 15 U.S.C. 78s(b)(3)(C).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Amex is proposing to modify its Member Fee Schedule to pass 
through to Amex specialist units any fee paid by the Exchange to a 
third party in connection with the listing and trading of a security 
allocated to such specialist unit.
    The text of the proposed rule change, as amended, is available at 
the Amex 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 Amex included statements 
concerning the purpose of and basis for the proposed rule change, as 
amended, 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 Amex 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
    In connection with the listing and trading of certain securities on 
the Exchange, the Exchange may be required to pay fees to third parties 
as a condition to listing. For example, the Exchange may pay license 
fees to index providers to list index options or exchange-traded funds 
based on a stock index. The Exchange may also pay other types of fees 
to third parties in connection with a particular listing.
    The Exchange proposes to pass such fees through to the Amex 
specialist unit allocated a security for which the Exchange pays such 
fees. This fee, which will be included in the Amex Member Fees Schedule 
under ``Membership Fees,'' will be applicable to any securities traded 
on the Exchange for which the Exchange pays a fee in connection with 
Amex listing or trading, including equities, options, structured 
products, exchange-traded funds and Trust Issued Receipts.
    The Exchange currently imposes license fees on a per transaction 
basis applicable to specialists and registered options traders in 
connection with trading of options on the Nasdaq 100 Index Tracking 
Stock (symbol QQQ), Nasdaq 100 Index (symbol: NDX), Mini NDX (symbol: 
MNX), and options on S&P 100 iShares (symbol: OEF). These fees were 
filed with the Commission in SR-Amex-2001-101.\5\ The Exchange 
represents that it will not pass through fees to the specialist unit 
that the Exchange pays to third parties, if the Exchange imposes a 
license fee on a per transaction basis with respect to the allocated 
security, (e.g., the Options Licensing Fee imposed under the Options 
Fee Schedule, as described in SR-Amex-2001-101).
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    \5\ See Securities Exchange Act Release No. 45163 (December 18, 
2001), 66 FR 66958 (December 27, 2001).
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    The Exchange represents that any fee passed through to the 
specialist unit pursuant to this filing will reflect only actual costs 
incurred by the Exchange in connection with Exchange listing or trading 
of the allocated security. Such fee could be imposed in connection with 
any security traded on the Exchange, whether a listed security or a 
security traded pursuant to unlisted trading privileges. The fee is not 
intended to cover any form of payment for order flow by the Exchange 
(in the event the Exchange determines to engage in such payment), and 
any imposition of fees on members or member organizations to permit the 
Exchange to recoup such payment would be filed separately with the 
Commission pursuant to Rule 19b-4.\6\
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    \6\ 17 CFR 240.19b-4.
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2. Basis
    The Exchange believes the proposed rule change, as amended, is 
consistent with section 6 of the Act,\7\ in general, and with section 
6(b)(4) of the Act,\8\ in particular, in that it is designed to provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and issuers and other persons using its 
facilities.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).

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[[Page 18963]]

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

    The Amex does not believe that the proposed rule change, as 
amended, will impose any burden on competition.

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

    Written comments on the proposed rule change, as amended, were 
neither solicited nor received.

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

    The foregoing proposed rule change, as amended, has become 
effective pursuant to section 19(b)(3)(A)(ii) of the Act \9\ and 
subparagraph (f)(2) of Rule 19b-4 \10\ thereunder, because it 
establishes or changes a due, fee, or other charge. At any time within 
60 days of March 18, 2002,\11\ 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.\12\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
    \11\ See supra note 4.
    \12\ See 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, 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, as 
amended, 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 Amex. All 
submissions should refer to File No. SR-Amex-2002-08 and should be 
submitted by May 8, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-9311 Filed 4-16-02; 8:45 am]
BILLING CODE 8010-01-P