[Federal Register Volume 68, Number 105 (Monday, June 2, 2003)]
[Notices]
[Pages 32793-32794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-13686]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47926; File No. SR-PCX-2003-19]


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

May 23, 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 April 29, 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 Exchange. On May 22, 2003, the Exchange 
filed Amendment No. 1 to the proposed rule change.\3\ 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.
    \3\ Amendment No. 1 replaced the original Form 19b-4 in its 
entirety.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The PCX is proposing to amend its schedule of Fees and Charges by 
changing the following fees for options: the trade match fees and the 
shortfall fee. The text of the proposed rule change is available at the 
principal office of the PCX 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 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 the 
Statutory Basis for, the Proposed Rule Change

(1) Purpose
    The Exchange is proposing to make changes to its Schedule of Fees 
and Charges with respect to the following fees effective for the May 
2003 trading month: trade match fees and shortfall fees. Other than the 
fees listed herein, the Exchange does not seek to make any other 
changes to its fee schedule.
    Trade Match Terminal and Table Fees. The Exchange currently charges 
``trade match'' terminal and table fees in order to allow the Member 
Firms to use the PCX facilities to verify matched trades between buyers 
and sellers. Currently the Exchange charges a trade match terminal fee 
of $80 per month per terminal and trade match table fees in the amount 
of $120 per month for a six-foot table, $80 per month for a four-foot 
table, and $60 per month for a shared six-foot table.
    With technological advances, the PCX is now able to offer Member 
Firms more flexibility in determining the location where they perform 
the trade match function. The Exchange will continue to offer Member 
Firms the opportunity to

[[Page 32794]]

use the Exchange's facilities and dedicated terminals for its trade 
match functions at the existing rates referenced above. The Exchange 
also intends to allow Member Firms to connect their own PCs via the 
Exchange to SIAC, the Exchange's provider of clearing-related 
processing. For this, the Exchange proposes a fee of $80 per month per 
user ID. This is identical to the fee that the Exchange currently 
charges for allowing Member Firms to utilize the Exchange's dedicated 
computer terminals for trade match. The Exchange proposes to apply a 
reduced fee of $50 per month per user ID if the Member Firm uses its 
own PCs that connect via the Member Firm's SIAC connection. For trade 
match table fees, the Exchange proposes to add another option that will 
allow Member Firms to pay $50 per month per dedicated booth on the 
options trading floor.
    Shortfall Fee. The Exchange currently charges a shortfall fee of 
$0.35 per shortfall contract on the top 120 equity option issues if the 
PCX volume in the issue is less than 12% of the national volume in that 
issue for that month. The volume base for the fee is 12% of the monthly 
industry volume for each qualifying issue, less the PCX monthly volume 
for the issue. In order to defray the shortfall fee for Member Firms 
who are achieving greater than 12% volume in any of their top 120 
issues, the Exchange proposes to apply a short fall fee credit of $0.35 
per contract to offset the short fall fee of any Member Firm who 
achieves a market share of greater than 12% of the national volume in 
any top 120 equity option issue. The Exchange proposes that the volume 
base for the credit will be the PCX monthly volume for the issue less 
12% of the monthly industry volume for each qualifying issue. The 
Exchange will apply the credit only to offset an individual Member 
Firm's obligation to pay a shortfall fee incurred by that particular 
Member Firm. The Exchange will not apply the credit to offset other 
fees or allow it to be carried forward or applied retroactively to the 
shortfall fee for other months.
(2) Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) \4\ of the Act in general and section 6(b)(4) \5\ of 
the Act, in particular, because it provides for the equitable 
allocation of reasonable dues, fees and other charges among its 
members.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 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.

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 foregoing rule change, which establishes or changes a due, fee 
or other charge imposed by the Exchange, has become effective pursuant 
to section 19(b)(3)(A) \6\ of the Act and subparagraph (f)(2) of Rule 
19b-4 thereunder.\7\ 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. For purposes 
of calculating the 60-day abrogation period, the Commission considers 
the proposed rule change to have been filed on May 22, 2003, when 
Amendment No. 1 was filed.\8\
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(2).
    \8\ See note 3, supra.
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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. 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-2003-19 and should 
be submitted by June 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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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 03-13686 Filed 5-30-03; 8:45 am]
BILLING CODE 8010-01-P