[Federal Register Volume 68, Number 12 (Friday, January 17, 2003)]
[Notices]
[Pages 2614-2615]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-1049]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47148; File No. SR-Phlx-2002-79]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Philadelphia Stock Exchange, Inc. Relating to the 
Application Fee and the ETP Application Fee

January 9, 2003.
    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 17, 2002, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
or ``Exchange''), filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') 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 Exchange proposes to amend its schedule of dues, fees and 
charges to increase its current Application Fee from $200 to $350, and 
to delete the reference to the separate ETP Application Fee.

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 amend the Exchange's 
schedule of dues, fees and charges to increase its current Application 
Fee to $350 in order to generate additional revenue. The Exchange 
currently charges a $200 Application Fee for applications handled by 
the Exchange's Membership Services Department, including applications 
for Exchange membership and foreign currency options (``FCO'') 
participation and for other applications including for approval as a 
seat lessor or as an inactive nominee.\3\ The Application Fee is 
charged only upon the first such approval and is non-recurring; 
however, a lapse for six months or more necessitates the payment of an 
Application Fee for reapplication. For example, if a member ceases to 
be a member on January 1st and applies on or after July 1st of that 
year to once again become a member, an Application Fee will be charged. 
Application Fees are used to help offset Exchange clerical and 
administrative expenditures related to application processing 
including, but not limited to, regulatory background checks, 
registration and fingerprint card processing.\4\
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    \3\ Under Exchange rules a lessor need not be an Exchange 
member. See Phlx Rule 931, Approved Lessor.
    \4\ The Exchange has not designated the Application Fee as 
eligible for the Monthly Member Credit. See Securities Exchange Act 
Release No. 44292 (May 11, 2001), 66 FR 27715 (May 18, 2001) 
(approving SR-Phlx-2001-49). The Monthly Member Credit allows 
Exchange members to receive a monthly credit of up to $1,000 to be 
applied against certain fees, dues, charges and other such amounts.
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    Similarly, a $200 ETP Application Fee is charged to applicants for 
equity trading permits (``ETPs'') who, at the time application is made, 
are not Exchange members or FCO participants.\5\ The Exchange proposes 
to delete the $200 ETP Application Fee from the fee schedule and to 
simply apply the Application Fee discussed in the previous paragraph to 
ETP applications to the same extent the Application Fee applies to 
membership applications. This proposal is intended to remove 
unnecessary complexity and duplication from the Exchange's fee schedule 
in order to avoid confusion.
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    \5\ See Securities Exchange Act Release No. 45523 (March 8, 
2002), 67 FR 11738 (March 15, 2002).
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2. Statutory Basis
    The Exchange believes that its proposal to amend its schedule of 
dues, fees and charges is consistent with section 6(b) of the Act \6\ 
in general, and furthers the objectives of section 6(b)(4) of the Act 
\7\ in particular, in that it is an equitable allocation of reasonable 
dues, fees, and other charges among Exchange members and issuers and 
other persons using its facilities, in particular, in that it fairly 
allocates costs associated with application processing to those 
individuals and firms making such applications. The proposal also 
simplifies the fee schedule by eliminating the reference to the 
separate ETP Application Fee.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) by order approve such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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

[[Page 2615]]

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 
Phlx. All submissions should refer to File No. Phlx-2002-79 and should 
be submitted by February 7, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-1049 Filed 1-16-03; 8:45 am]
BILLING CODE 8010-01-P