[Federal Register Volume 68, Number 1 (Thursday, January 2, 2003)]
[Notices]
[Pages 146-148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-33121]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47087; File No. SR-Phlx-2002-80]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. Relating to Index Option Charges

December 23, 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 December 18, 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 and 
II 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 Exchange proposes to amend its schedule of dues, fees and 
charges by: (1) increasing the Registered Option Trader (``ROT'') Index 
Option Transaction Charge from $0.14 per contract to $0.19 per 
contract; \3\ and (2) assessing an Index Option Book Charge of $1000 
per month on Phlx specialists in the Exchange's Sector Index Options 
(``Index Options''), except for the KBW Bank SectorSM (``BKXSM''), the 
Oil Service SectorSM (``OSXSM''), the Semiconductor SectorSM 
(``SOXSM'') and the Gold and Silver SectorSM (``XAUSM''), which will be 
assessed a $2,000 per month Index Option Book Charge.\4\ Any newly-
listed Index Options will be assessed at $1,000 per

[[Page 147]]

month, beginning with the first full month of trading.
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    \3\ The $0.03 per contract Index Option Comparison Charge will 
continue to apply to ROT transactions.
    \4\ The Index Option Transaction Charge for Specialists will 
remain at $.14 per contract. The ROT Index Option Transaction Charge 
and the Index Option Book Charge 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 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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    The $0.19 per contract ROT Index Option Transaction Charge is 
scheduled to be implemented on transactions settling on or after 
January 2, 2003. The Index Option Book Charge is scheduled to become 
effective on January 2, 2003. The text of the proposed rule change is 
set forth below. New text is in italics. Deleted text is in brackets.

                     Summary of Index Option Charges
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Option Comparison Charge I
 (Applicable to All Trades--
 except specialist trades):
    Registered Option Trader....  $.03 per contract
    Firm (Proprietary and         $.04 per contract
     Customer Executions).
Option Transaction Charge I:
    Customer Executions
        Market value less than    $.20 per contract
         $1.00*.
        Market value $1.00 or     $.40 per contract
         over*.
    Firm**......................  $.10 per contract
    Registered Option Trader      $[.14] .19 per contract
     [and Specialist].
    Specialist..................  $.14 per contract
Option Book Charge I:
    KBW Bank Sector \SM\........  $2,000 per month
    Oil Service Sector \SM\
    Semiconductor Sector \SM\
    Gold and Silver Sector \SM\
    All other Index Options       $1,000 per month
Option Floor Brokerage
 Assessment I: 5% of net floor
 brokerage income.
Floor Brokerage Transaction Fee
 I: $.05 per contract, for floor
 brokers executing transactions
 for their own member firms.
Real-time Risk Management Fee I:
 $.0025 per contract for firms/
 members receiving information
 on a real-time basis See
 Appendix A for additional fees.
 I denotes fee eligible for
 monthly credit of up to $1,000.
 
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*Block transaction for customer executions of 500 to 999 contracts and
  1000 contracts and more are eligible for a discount to such charges of
  15% and 25% respectively from the stated rates upon submission to the
  PHLX of a customer option block discount request form with supportive
  documentation within thirty (30) days of monthly billing date.
**Non-clearing firm members' proprietary transactions are eligible for
  the ``firm'' rate based upon submission of a PHLX rebate request form
  with supportive documentation within thirty (30) days of invoice date.

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 III 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 raise revenue for the 
Exchange. In addition, there are certain costs associated with the 
calculation of underlying index values. Because BKX\SM\, OSX\SM\, 
SOX\SM\ and XAU\SM\ have the highest trading interest and volume of all 
of the Exchange's Index Options, these Index Options will be assessed a 
higher Index Option Book Charge than other Index Options.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\5\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act,\6\ in particular, in that it 
is an equitable allocation of reasonable dues, fees, and other charges 
among Exchange members.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 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 solicited or received with respect to the 
proposed rule change.

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

    The foregoing rule change establishes or changes a due, fee, or 
charge imposed by the Exchange and, therefore, has become effective 
upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act \7\ and Rule 
19b-4(f)(2) thereunder.\8\ 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 purpose of the Act.
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    \7\ 15 U.S.C. 78(s)(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

[[Page 148]]

available for inspection and copying at 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 No. SR-Phlx-2002-80 and should be 
submitted by January 23, 2003.

    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. 02-33121 Filed 12-31-02; 8:45 am]
BILLING CODE 8010-01-P