[Federal Register Volume 67, Number 232 (Tuesday, December 3, 2002)]
[Notices]
[Pages 72014-72015]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-30534]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46875; File No. SR-Phlx-2002-70]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc., To Amend Schedule of Dues, Fees and Charges Relating to 
Floor Brokerage Assessments

November 21, 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 October 29, 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 
by: (1) Suspending the current equity floor brokerage assessment fee of 
5 percent of net floor brokerage income through December 31, 2003; and 
(2) adopting a monthly fee of $250 for each member who derives his/her 
primary income from equity floor brokerage business.\4\ For purposes of 
the $250 monthly fee, ``primary income'' means that the member derives 
at least 80 percent of gross income generated from Phlx floor-based 
activities from his/her floor brokerage business conducted on the 
Exchange.\5\
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    \4\ This fee will 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 Phlx by certain members. See Securities 
Exchange Act Release No. 44292 (May 11, 2001), 66 FR 27715 (May 18, 
2001)(SR-Phlx-2001-49).
    \5\ For purposes of this proposed rule change, floor brokerage 
business conducted on the Exchange includes orders that are received 
on the Phlx, even if those orders are executed on an exchange other 
than the Phlx.
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    The Phlx intends to suspend the floor brokerage assessment fee of 5 
percent for transactions settling on or after November 1, 2002, and 
implement the $250 monthly fee beginning November 2002.
    The text of the proposed rule change is available at the Phlx and 
at the Commission. A copy of the Exchange's Summary of Equity Charges 
is attached to the proposed rule change filed with the Commission as 
Exhibit 2.

[[Page 72015]]

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 attract business to 
the Exchange. Specifically, the Phlx believes that waiving the 5 
percent assessment through December 31, 2003 and implementing a modest 
monthly fee of $250 should encourage floor brokers to send additional 
order flow to the Exchange and enhance the competitiveness of the 
Exchange. The Exchange will reassess the waiver of the 5 percent 
assessment as appropriate,\6\ and will file any modification to it with 
the Commission pursuant to Section 19(b)(3)(A)(ii) of the Act.\7\
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    \6\ Absent any modification, the 5 percent assessment will 
recommence on January 1, 2004.
    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \8\ in general, and furthers the 
objectives of Section 6(b)(4)\9\ in particular, in that it provides for 
the equitable allocation of reasonable dues, fees and other charges 
among Exchange members.
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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 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 \10\ and subparagraph (f)(2) of Rule 19b-4 
thereunder,\11\ 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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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \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 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-2002-70, and should be 
submitted by December 24, 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. 02-30534 Filed 12-2-02; 8:45 am]
BILLING CODE 8010-01-P