[Federal Register Volume 67, Number 186 (Wednesday, September 25, 2002)]
[Notices]
[Pages 60276-60277]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-24354]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46513; File No. SR-SCCP-2002-03]


Self-Regulatory Organizations; Stock Clearing Corporation of 
Philadelphia; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to Fees for Remote Competing Specialists

September 18, 2002.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on August 6, 2002, the Stock 
Clearing Corporation of Philadelphia (``SCCP'') 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 primarily by SCCP. The Commission is publishing this 
notice to solicit comments on the

[[Page 60277]]

proposed rule change from interested parties.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change amends SCCP's fee schedule to adopt new 
fees relating to remote competing specialists on the Philadelphia Stock 
Exchange (``Phlx'') and to provide that certain existing fees and 
discounts applicable to Phlx specialists will not apply to remote 
competing specialists.\2\
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    \2\ See also Securities Exchange Act Release No. 46392 (August 
21, 2002), 67 FR 55294 (August 28, 2002) (amending Phlx fees to be 
charged in connection with the commencement of the remote competing 
specialist program.)
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule

    In its filing with the Commission, SCCP included statements 
concerning the purpose of and statutory basis for the proposed rule 
change. The text of these statements may be examined at the places 
specified in Item IV below. SCCP has prepared summaries, set forth in 
sections (A), (B), and (C) below, of the most significant aspects of 
such statements.\3\
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    \3\ The Commission has modified parts of these statements.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    On December 21, 2001, the Commission approved a Phlx proposed rule 
change to adopt rules designed to facilitate the establishment of 
Phlx's remote competing specialist program.\4\ The new rules provide 
for the approval by Phlx's Equity Allocation, Evaluation, and 
Securities Committee of applications by qualified specialist units to 
act as competing specialists in one or more equity securities from 
locations other than Phlx's physical trading floor.\5\ SCCP is revising 
its schedule of dues, fees, and charges in anticipation of the 
commencement of trading by remote competing specialists.
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    \4\ Securities Exchange Act Release No. 45184 (December 21, 
2001), 67 FR 622 (January 4, 2002).
    \5\ Phlx notes that for most purposes under its rules a remote 
competing specialist is considered to be transacting business on the 
floor. For example, Exchange Rule 461(f) provides, ``All rule, by-
law and certificate of incorporation references pertaining to the 
trading floor of the Exchange shall be deemed to include any bids, 
offers, orders and trading done remotely, and all such bids, offers, 
orders and trades shall be deemed to be Phlx bids, offers, orders 
and executions on the Exchange.'' Additionally, the proposed rule 
change proposing Phlx Rule 461 states that remote specialists would 
be subject to the jurisdiction of the Floor Procedure Committee in 
the same manner they would if their operations were conducted on the 
physical trading floor and that remote specialists would be eligible 
to serve on the Board of Governors and in committee positions 
reserved for persons associated with member organizations primarily 
engaged in business on Phlx's equity floor. Securities Exchange Act 
Release No. 45014 (November 2, 2001), 66 FR 56888 (November 13, 
2001), footnote 6. Telephone conversation between Carla Behnfeldt, 
Director, Legal Department new Product Development Group, Phlx, and 
Lori Bucci, Special Counsel, Division of Market Regulation, 
Commission (August 30, 2002).
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    Under the revised fee schedule, the existing trade recording fees 
and value fees will not apply to trades by Phlx remote competing 
specialists. The specialist discounts for trades cleared through a SCCP 
margin account will not apply to trades by remote competing 
specialists. The PACE specialist credit will not apply to remote 
competing specialists unless and until the PACE specialist charge (a 
fee assessed by Phlx) is effective with respect to remote competing 
specialists.
    In place of the trade recording fees and value fees, SCCP proposes 
to apply a new fee, the SCCP transaction charge, applicable only to 
transactions involving Phlx remote competing specialists. The SCCP 
transaction charge of $.30 per remote competing specialist trade will 
apply to SCCP participants which are, or which clear for, Phlx remote 
competing specialists. This fee will be capped at $100,000 per month 
per remote competing specialist.
    Except as described herein, all other SCCP fees, dues, discounts, 
credits, and charges applicable to Phlx floor-based competing 
specialists (including the PACE specialist credit and account fees, 
including suffix charges) will also apply to Phlx remote competing 
specialists.
    SCCP believes that the proposed rule change is consistent with 
17A(b)(3)(D) of the Act \6\ which requires that the rules of a 
registered clearing agency provide for equitable allocation of 
reasonable dues, fees, and other charges for services which it provides 
to its participants because the fee structure proposed herein applies 
equally to all SCCP participants with remote competing specialist 
operations or which clear for remote competing specialists.
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    \6\ 15 U.S.C. 78q-1(b)(3)(D).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    SCCP 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 either solicited or 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 SCCP, it has become effective pursuant 
to Section 19(b)(3)(A)(ii) of the Act \7\ and Rule 19b-4(f)(2) 
thereunder.\8\ At any time within sixty 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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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 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 in the 
Commission's Public Reference Section, 450 Fifth Street, NW., 
Washington, DC 20549. Copies of such filing will also be available for 
inspection and copying at SCCP. All submissions should refer to the 
File No. SR-SCCP-2002-03 and should be submitted by October 16, 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. 02-24354 Filed 9-24-02; 8:45 am]
BILLING CODE 8010-01-P