[Federal Register Volume 68, Number 30 (Thursday, February 13, 2003)]
[Notices]
[Pages 7405-7406]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3580]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47330; File No. SR-PCX-2003-05]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of a Proposed Rule Change by the Pacific Exchange, Inc. 
Relating to Exchange Fees and Charges for Options Intermarket Linkage 
Orders

February 6, 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 January 31, 2003, the Pacific Exchange, Inc. (``PCX'' 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 PCX. 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

    In connection with the launch of the options intermarket linkage 
(``Linkage''), the PCX proposes to amend its Schedule of Fees and 
Charges for Exchange Services in order to clarify that unless otherwise 
provided, executions resulting from Linkage orders will be subject to 
the same billing treatment as current executions.

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 PCX 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
    On July 28, 2000, the Commission approved a national market system 
plan for the purpose of creating and operating an intermarket options 
market linkage (``Linkage Plan'' or ``Plan'') \3\ which linkage now 
includes participation by the five option exchanges (``Participant 
Exchanges'').\4\ The PCX proposed to adopt new rules relating to the 
operation of the Linkage on September 26, 2002 and filed an amendment 
to the proposal on January 30, 2003. Along with all of the Participant 
Exchanges, the Exchange launched phase I of Linkage on January 31, 
2003.
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    \3\ See Securities Exchange Act Release No. 43086 (July 28, 
2000), 65 FR 48023 (August 4, 2000).
    \4\ See Securities Exchange Act Release Nos. 43086 (July 28, 
2000), 65 FR 48023 (August 4, 2000) and 43573 (November 16, 2000), 
65 FR 70850 (November 28, 2000); and 43574 (November 16, 2000), 65 
FR 70851 (November 28, 2000).
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    In connection with the launch of the Linkage, the Exhange seeks to 
clarify its Schedule of Fees and Charges for Exchange Services in order 
to add a provision stating that executions resulting from Linkage 
orders will be subject to the same billing treatment as current 
executions. Accordingly, executions arising from either a Principal 
Acting as Agent (``P/A'') Linkage order, or a Principal Linkage Order 
that are routed to the Exchange from other market centers will be 
subject to the same trade related charges assessed on market maker 
executions originating from the PCX. The proposal specifies that no 
fees will apply to Satisfaction Orders, which result after a trade-
through.\5\
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    \5\ Trade-throughs occur when broker-dealers execute customer 
orders on one exchange at prices inferior to another exchange's 
disseminated quote.
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    The Exchange does not seek to make any other changes to its 
Schedule of Fees and Charges for Exchange Services.
2. Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act,\6\ in general, and Section 6(b)(4) of the Act, \7\ in 
particular, in that it provides for the equitable allocation of 
reasonable dues, fees and other charges among its members.
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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 burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

[[Page 7406]]

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments on the proposed rule change were neither solicited 
nor received.

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

    The Exchange has designated the proposed rule change as a fee 
change pursuant to Section 19(b)(3)(A)(ii) of the Act \8\ and Rule 19b-
4(f)(2) thereunder.\9\ Accordingly, the proposal will take effect upon 
filing with the Commission. At any time within 60 days of the filing of 
such proposed rule change, the Commission may summarily abrogate the 
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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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 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 PCX. All 
submissions should refer to File No. SR-PCX-2003-05 and should be 
submitted by March 6, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-3580 Filed 2-12-03; 8:45 am]
BILLING CODE 8010-01-P