[Federal Register Volume 68, Number 156 (Wednesday, August 13, 2003)]
[Notices]
[Pages 48437-48438]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-20546]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48287; File No. SR-SCCP-2003-05]


Self-Regulatory Organizations; Stock Clearing Corporation of 
Philadelphia; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to Specialist Volume Level Discounts

August 5, 2003.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on June 27, 2003, the Stock 
Clearing Corporation of Philadelphia (``SCCP'') 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 primarily by SCCP. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
parties.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change amends SCCP's fee schedule to allow SCCP 
participant firms involved in mergers, consolidations, acquisitions or 
other business combinations (collectively ``business combinations'') to 
combine their volumes of trades cleared through SCCP margin accounts 
for purposes of the SCCP specialist volume level discount. The proposal 
is scheduled to be effective retroactively as of February 1, 2003, with 
a rebate to be given from that date forward for any firms affected by 
this proposal.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule

    In its filing with the Commission, SCCP included statements 
concerning the purpose of and statutory basis for the proposed rule 
change. The text of these statements may be examined at the places 
specified in Item IV below. SCCP has prepared summaries, set forth in 
sections (A), (B), and (C) below, of the most significant aspects of 
such statements.\2\
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    \2\ The Commission has modified parts of these statements.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The proposed rule change amends SCCP's schedule of dues, fees, and 
charges to allow participant firms engaged in business combinations to 
combine their trading volumes for purposes of determining their SCCP 
specialist volume level discounts. From time to time, participant firms 
may enter into some form of business combination. Prior to a business 
combination, each component participant firm may take advantage of the 
specialist volume level discount, depending on the firm's level of 
trading activity in its SCCP margin account. Currently, however, when a 
participant firm is involved in a business combination, the resulting 
participant firm is penalized because the specialist volume level 
discount is calculated for each participant firm in such business 
combination rather than for both firms on a combined basis.
    After a business combination, the resulting participant firm may be 
eligible for a higher specialist volume level discount as a result of 
the combination of the trading activity of its component firms. This 
occurs because the resulting firm may have a higher volume of 
transactions than each component firm and because the discount per side 
increases as the volume levels increase. To establish parity in these 
situations, SCCP is proposing that, in the month during which a 
business combination occurs, the specialist volume level discounts of 
each participant firm involved in such business combination may be 
consolidated for purposes of determining the specialist volume level 
discount of the resulting participant firm.
    SCCP participants eligible for the combined discounts will be 
required to request the combined volume level discounts within 30 days 
after the issuance of the SCCP invoice for the month in which a 
business combination occurs. The proposal is scheduled to be effective 
as of February 1, 2003, with a rebate to be given from February 1, 2003 
forward to any firms affected by this proposed fee change.
    SCCP believes that the proposed rule change is consistent with 
17A(b)(3)(D) of the Act \3\ which requires that the rules of a 
registered clearing agency provide for equitable allocation of 
reasonable dues, fees, and other charges for services which it provides 
to its participants because the fee structure proposed herein applies 
the volume discount applicable to combined firms in an equitable 
manner.
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    \3\ 15 U.S.C. 78q-1(b)(3)(D).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    SCCP 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

    Because the foregoing rule change establishes or changes a due, 
fee, or other charge imposed by SCCP, it has become effective pursuant 
to Section 19(b)(3)(A)(ii) of the Act \4\ and Rule 19b-4(f)(2) 
thereunder.\5\ At any time within sixty days of the filing of the 
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 furtherance of the purposes of the Act.
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    \4\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \5\ 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. 
Comments may also be submitted electronically at the following e-mail 
address: [email protected]. All comment letters should refer to 
File No. SR-SCCP-2003-05. This file number should be included on the 
subject line if e-mail is used. To help us process and review comments 
more efficiently, comments should be sent in hardcopy or by e-mail but 
not by both methods. 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

[[Page 48438]]

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 Section, 450 Fifth Street, 
NW., Washington, DC 20549. Copies of such filing also will be available 
for inspection and copying at the principal office of SCCP.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-20546 Filed 8-12-03; 8:45 am]
BILLING CODE 8010-01-P