[Federal Register Volume 68, Number 92 (Tuesday, May 13, 2003)]
[Notices]
[Pages 25670-25671]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-11880]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47799; File No. SR-Phlx-2003-28]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Philadelphia Stock Exchange, Inc. To Retroactively Apply 
Its Broker-Dealer Transaction Fee for Equity Option Transactions for 
the Period From April 1, 2003 to April 10, 2003

May 6, 2003.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(Act or Exchange Act),\1\ and rule 19b-4 thereunder,\2\ notice is 
hereby given that on April 28, 2003, 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 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 apply the following reduced broker-dealer transaction fee 
for block equity option transactions retroactively to equity options 
transactions settling from April 1, 2003, to April 10, 2003: Broker/
Dealer \3\ (non-AUTO-X)
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    \3\ This charge applies to members for transactions, received 
from other than the floor of the Exchange, for any account (i) in 
which the holder of beneficial interest is a member or non-member 
broker-dealer or (ii) in which the holder of beneficial interest is 
a person associated with or employed by a member or non-member 
broker-dealer. This includes transactions for the account of an ROT 
entered from off-floor.

Up to 2,000 contracts.....................  $.35 per contract
Between 2,001 and 3,000 contracts.........  $.25 per contract (for all
                                             contracts)
Residual above 3,000 contracts............  $.20 per contract above
                                             3,000 contracts (with the
                                             first 3,000 contracts
                                             charged $.25 per contract)
 

    This fee is applied per transaction (not per month).\4\ This 
revised fee became effective for trades settling on or after April 11, 
2003. The Exchange now proposes to implement this fee on transactions 
that have settled from April 1, 2003, to April 10, 2003.\5\ All other 
equity option transaction charges will remain unchanged. The text of 
the proposed rule change is available upon request from the Office of 
the Secretary, the Commission, and the Exchange.
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    \4\ Member organizations may need to file a form with the 
Exchange to identify eligible block trades.
    \5\ This fee will continue to 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 28, 2001)(SR-Phlx-2002-32).
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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
    On April 11, 2003, the Exchange filed a proposed rule change that 
amended its schedule of dues, fees and charges to adopt decreases in 
its broker-dealer transaction fee for equity option transactions.\6\ 
This fee change became effective for transactions settling on or after 
April 11, 2003. This current proposal seeks to apply theses decreases 
to the broker-dealer transaction fee to transactions that settled from 
April 1, 2003, to April 10, 2003.\7\ The purpose of the proposed rule 
change is to provide equivalent fee decreases to those broker-dealers 
whose transactions would have qualified for discounted broker-dealer 
transaction fees during the above-referenced ten-day period.
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    \6\ See Securities Exchange Act Release No. 47715 (April 22, 
2003), 68 FR 22446 (April 28, 2003)(SR-Phlx-2003-26).
    \7\ The Phlx stated that from April 1, 2003, to April 10, 2003, 
there were approximately seven transactions that would have 
qualified for the lower ``block'' broker-dealer transaction fee.
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    This proposal seeks to apply the current transaction levels set 
forth above per to applicable broker-dealer transactions for trades 
settling from April 1, 2003, to April 10, 2003. For example, under the 
proposal (i) a transaction of 1,700 option contracts will be charged 
$0.35 per contract, (ii) a transaction of 2,500 contracts will be 
charged $0.25 per contract for all contracts, and (iii) a transaction 
of 3,500 contracts will be charged $0.25 for each of the first 3,000 
contracts and $0.20 for each of the remaining 500 contracts.\8\
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    \8\ Of course, the contra-side to a transaction may also be 
subject to transaction and other charges.
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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 \9\ 
in general, and furthers the objectives of section 6(b)(4) of the Act 
\10\ in particular, in that it is an equitable allocation of reasonable 
dues, fees, and other charges among Exchange members. The Exchange 
believes the proposal is reasonable and equitable because it applies 
the same fee decreases for broker-dealers executing equity options 
transactions on the Exchange settling from April 1, 2003, to April 10, 
2003, as those applicable to broker-dealers whose transactions settle 
on or after April 11, 2003.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Phlx 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.

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

[[Page 25671]]

(ii) as to which the Exchange 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 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 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-2003-28 and 
should be submitted by June 3, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.03-(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-11880 Filed 5-12-03; 8:45 am]
BILLING CODE 8010-01-P