[Federal Register Volume 68, Number 46 (Monday, March 10, 2003)]
[Notices]
[Pages 11420-11422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-5569]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47432; File No. SR-Amex-2003-09]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange 
LLC, Relating to the Adoption of a Per Contract Licensing Fee for the 
iShares Goldman Sachs Corporate Bond Fund

March 3, 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 February

[[Page 11421]]

19, 2003, the American Stock Exchange LLC (``Amex'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``SEC'' or 
``Commission'') 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 Amex proposes to modify its options fee schedule by adopting a 
per contract license fee in connection with specialist and registered 
options traders transactions in options on the iShares Goldman Sachs 
Corporate Bond Fund. The text of the proposed rule change is available 
at the Office of the Secretary, Amex and at the Commission.

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 Amex 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 the 
Statutory Basis for, the Proposed Rule Change

(1) Purpose
    The Exchange has entered into numerous agreements with issuers and 
owners of indexes for the purpose of trading options on certain 
exchange-traded funds (``ETFs''). This requirement to pay an index 
license fee to third parties is a condition to the listing and trading 
of these ETF options. In many cases, the Exchange is required to pay a 
significant licensing fee to issuers or index owners that may not be 
reimbursed. In an effort to recoup the costs associated with index 
licenses, the Exchange has previously established a per contract 
licensing fee for specialists and registered options traders (``ROTs'') 
that is collected on every transaction in options on the Nasdaq-100 
Index Tracking Stock (QQQ), the Nasdaq-100 Index (NDX), the Mini-NDX 
(MNX) and on the S&P 100 iShares (OEF).\3\
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    \3\ See Securities Exchange Act Release No. 45163 (December 18, 
2001), 66 FR 66958 (December 27, 2001).
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    The purpose of the proposed fee is for the Exchange to recoup its 
costs in connection with the index license fee for the trading of 
options on the iShares Goldman Sachs Corporate Bond Fund (the 
``Corporate Bond Fund''). The proposed licensing fee will be collected 
on every option transaction of the Corporate Bond Fund in which the 
specialist or ROT is a party. The Exchange proposes to charge $0.10 per 
contract side for options on the Corporate Bond Fund (LQD). 
Accordingly, the Exchange believes that requiring the payment of a per 
contract licensing fee by those specialists units and ROTs that are the 
primary beneficiaries of the Exchange's index license agreements is 
justified and consistent with the rules of the Exchange and the Act. In 
addition, passing the license fee (on a per contract basis) along to 
the specialist allocated to the Corporate Bond Fund option and the ROT 
trading such product is efficient and consistent with the intent of the 
Exchange to pass on its non-reimbursed costs to those market 
participants that are the primary beneficiaries.
    The Amex notes that in recent years it has increased a number of 
member fees to better align Exchange fees with the actual cost of 
delivering services and reduce Exchange subsidies of the services.\4\ 
Implementation of this proposal is consistent with the reduction and/or 
elimination of these subsidies.
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    \4\ See Securities Exchange Act Release Nos. 45360 (January 29, 
2002), 67 FR 5626 (February 6, 2002) and 44286 (May 9, 2001), 66 FR 
27187 (May 16, 2001).
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    The Exchange submits that the proposed license fee will provide 
additional revenue and recoup its costs associated with the trading of 
Corporate Bond Fund options. In addition, the Amex believes that this 
fee will help to allocate to those specialists and ROTs transacting in 
Corporate Bond Fund options, a fair share of the related costs of 
offering such options. Accordingly, the Exchange believes that the 
proposed fee is reasonable.
(2) Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
section 6(b) \5\ of the Act in general and furthers the objectives of 
section 6(b)(4) \6\ in particular, in that it provides for the 
equitable allocation of reasonable dues, fees, and other charges among 
its 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 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, which establishes or changes a due, fee 
or other charge imposed by the Exchange, has become effective 
immediately pursuant to section 19(b)(3)(A) of the Act \7\ and 
subparagraph (f)(2) of rule 19b-4 thereunder.\8\ At any time within 60 
days of the filing of such 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 the furtherance of the 
purposes of the Act.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \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 available for inspection and copying in the 
Commission's Public Reference Room in Washington, DC. Copies of such 
filing will also be available for inspection and copying at the 
principal office of the Amex. All submissions should refer to File No. 
SR-Amex-

[[Page 11422]]

2003-09 and should be submitted by March 31, 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. 03-5569 Filed 3-7-03; 8:45 am]
BILLING CODE 8010-01-P