[Federal Register Volume 67, Number 141 (Tuesday, July 23, 2002)]
[Notices]
[Pages 48239-48240]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-18560]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46212; File No. SR-Phlx-2002-36]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. Relating to Fees Applicable to Competing Specialists

July 16, 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 June 28, 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, 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 Phlx proposes to amend its schedule of dues, fees and charges 
to increase from $0.30 to $0.35 its equity option transaction charge on 
members for off-floor broker-dealer transactions.\3\ The Exchange 
intends to implement this fee on transactions settling on or after July 
1, 2002.\4\
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    \3\ The Exchange is also amending the accompanying footnote in 
the Summary of Equity Options Charges on the Exchange's schedule of 
dues, fees and charges to make it more precise.
    \4\ This fee will continue to be eligible for the monthly credit 
of up to $1,000 to be applied against certain fees, dues, charges 
and other amounts owed to the Exchange by certain members. See 
Securities Exchange Act Release No. 44292 (May 11, 2001), 66 FR 
27715 (May 18, 2001) (SR-Phlx-2001-49).
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    Currently, the Exchange imposes a fee on its members for off-floor 
broker-dealer transactions.\5\ This category includes registered 
options traders (``ROTs'') who trade from off-floor and broker-dealers 
who route orders through firm, customer or market maker accounts 
carried by a member clearing firm that are executed on the Exchange 
trading floor, but not firm/proprietary orders.\6\ All other equity 
option transaction charges will remain unchanged.\7\
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    \5\ See Securities Exchange Act Release No. 45942 (May 16, 
2002), 67 FR 36060 (May 22, 2002) (SR-Phlx-2002-32).
    \6\ A firm/proprietary transaction or comparison charge applies 
to members for orders for the proprietary account of any member or 
non-member broker-dealer that derives more than 35 percent of its 
annual, gross revenues from commissions and principal transactions 
with customers. See Securities Exchange Act Release No. 43558 
(November 14, 2000), 65 FR 69984 (November 21, 2000) (SR-Phlx-00-
85).
    \7\ For purposes of the equity option transaction charge, the 
broker-dealer option equity transaction charge is currently defined 
in a footnote in the Summary of Equity Options Charges on the 
Exchange's schedule of dues, fees and charges, as a charge that is 
applied to members for orders entered from other than the floor of 
the Exchange for any account (i) in which the holder of beneficial 
interest is a member or non-member broker-dealer or (ii) in which 
the holder of beneficial interest is a person associated with or 
employed by a member or non-member broker-dealer. This includes 
orders for the account of an ROT entered from off-floor. The 
Exchange proposes to replace the word ``entered'' with the word 
``received'' to make the definition more precise.
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    The text of the proposed rule change is available at the Office of 
the Secretary, the Phlx, and 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 Phlx 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 IV below. The Phlx 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
    The purpose of the proposed rule change is to generate additional 
revenue for the Exchange by increasing the fee imposed on members for 
off-floor broker-dealer transactions. Thus, the broker-dealer equity 
option transaction charge will be increased from $0.30 to $0.35.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act,\8\ in general, and furthers the objectives of section 
6(b)(4) of the Act,\9\ in particular, by providing for the equitable 
allocation of reasonable dues, fees and other charges among its 
members. The Exchange believes the proposal is equitable and reasonable 
because the proposed broker-dealer equity option transaction charge 
represents a modest increase intended to generate additional revenue.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Phlx 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

    Written comments were neither solicited nor received.

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

    Because the foregoing rule change establishes or changes a due, 
fee, or other charge imposed by the Exchange, it has become effective 
pursuant to

[[Page 48240]]

section 19(b)(3)(A) of the Act \10\ and subparagraph (f)(2) of Rule 
19b-4 \11\ thereunder. At any time within 60 days of the filing of 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 purposes of the Act.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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 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 also will be 
available for inspection and copying at the principal office of the 
Phlx. All submissions should refer to File No. SR-Phlx-2002-36 and 
should be submitted by August 13, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-18560 Filed 7-22-02; 8:45 am]
BILLING CODE 8010-01-P