[Federal Register Volume 67, Number 230 (Friday, November 29, 2002)]
[Notices]
[Pages 71226-71228]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-30196]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46874; File No. SR-Phlx-2002-64]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. To Change the Exchange's Calculation of Transaction 
Charges From a Value-Based System to a Share-Based System

November 21, 2002.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 71227]]

(``Act''),\1\ and rule 19b-4 thereunder,\2\ notice is hereby given that 
on October 24, 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 
Exchange has designated this proposal as one establishing or changing a 
due, fee, or other charge imposed by the Phlx under section 
19(b)(3)(A)(ii) of the Act,\3\ which renders the proposal effective 
upon filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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 change its current equity value transaction charge from a 
transaction value-based method to a share-based method. Equity 
transaction charges will be assessed on a sliding scale in relation to 
how many shares are traded per transaction, as opposed to the total 
value of the transaction. The proposed equity per share transaction 
charge will continue to exclude specialist trades and PACE trades, and 
will continue to be subject to a $50 maximum fee per trade side.\4\ The 
Exchange intends to implement the equity per share transaction charge 
for transactions settling on or after November 1, 2002.\5\
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    \4\ PACE is the acronym for the Phlx's Automated Communication 
and Execution System. It is the Phlx's order routing, delivery, 
execution and reporting system for its equity trading floor. See 
Phlx Rule 229.
    \5\ This fee will continue to be eligible for the monthly credit 
of up to $1,000 to be applied against certain fees, dues and 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-2002-32).
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    The text of the proposed rule change is below. Proposed new 
language is in italics; proposed deletions are in brackets.
EQUITY TRANSACTION VALUE CHARGE I
[Based on total value of monthly transactions with the exception of 
specialist trades and PACE trades.]

 
      [Monthly transaction value                Rate per $1,000]
 
                   [0--25mm                            $0.14]
               [25mm--100mm                             0.12]
              [100mm--250mm                             0.10]
              [250mm--500mm                             0.05]
            [500mm and over                            0.015]
 


Based on total shares per transaction with the exception of specialist 
trades and PACE trades.

 
                                                              Rate per
                      Transaction fee                           share
 
First 500 shares                                                  $0.00
Next 2,000 shares                                                0.0075
Next 7,500 shares                                                 0.005
Remaining shares                                                  0.004
$50 maximum fee per trade side.
 

* * * * *

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 IV 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
    The purpose of the proposed rule change is to change the Phlx's 
calculation of transaction charges from a value-based system to a 
share-based system in order to simplify the Phlx's transaction fee 
schedule. The Exchange believes a share-based system is easier for a 
member organization or a member to calculate current, and predict 
future, costs associated with these transactions. In addition, other 
exchanges use a share-based system.\6\
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    \6\ See Securities Exchange Act Release Nos. 36753 (January 22, 
1996), 61 FR 2851 (January 29, 1996)(SR-CHX-95-30); and 43664 
(December 4, 2000), 65 FR 77952 (December 13, 2000)(SR-NYSE-2000-
50).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act \7\ in general, and furthers the 
objectives of section 6(b)(4) \8\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees and other charges 
among Exchange members.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
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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 either solicited or received.

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

    The proposed rule change has become effective pursuant to section 
19(b)(3)(A)(ii) of the Act \9\ and subparagraph (f)(2) of Rule 19b-4 
thereunder,\10\ because it involves a due, fee, or other charge. 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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    \9\ 15 U.S.C. 78s(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 proposal 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 such filing will also be available for 
inspection and copying at the principal office of the Exchange. All 
submissions should refer to file number SR-Phlx-2002-64, and should be 
submitted by December 20, 2002.


[[Page 71228]]


    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-30196 Filed 11-27-02; 8:45 am]
BILLING CODE 8010-01-P