[Federal Register Volume 68, Number 160 (Tuesday, August 19, 2003)]
[Notices]
[Pages 49830-49831]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21131]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48317; File No. SR-PCX-2003-40]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. to 
Amend its Schedule of Fees and Charges for the Archipelago Exchange 
Facility

August 12, 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 August 1, 2003, the Pacific Exchange, Inc. (``PCX'') filed with the 
Securities and Exchange Commission the proposed rule change as 
described in Items I, II and III below, which the PCX has prepared. 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 PCX, through its wholly owned subsidiary PCX Equities, Inc. 
(``PCXE''), proposes to amend its fee schedule for services provided to 
ETP Holders \3\ and

[[Page 49831]]

Sponsored Participants \4\ that use the PCX's equities trading 
facility, the Archipelago Exchange (``ArcaEx''), by: (1) Reducing the 
per-share transaction fee for NYSE-listed securities to zero; (2) 
reducing the per-share User Transaction Credit for NYSE-listed 
securities to zero; and (3) eliminating the Tape A rebate for all 
transactions in NYSE-listed securities with the exception of Cross 
Orders.
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    \3\ See PCXE Rule 1.1(n) (defining ``ETP Holder'').
    \4\ A ``Sponsored Participant'' means ``a person which has 
entered into a sponsorship arrangement with a Sponsoring ETP Holder 
pursuant to [PCXE] Rule 7.29.'' See PCXE Rule 1.1(tt).
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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 PCX included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it had received on the proposal. The PCX has 
prepared summaries, set forth in sections A, B, and C below, of the 
most significant aspects of the statements. The text of the proposed 
rule change is available at the PCX and at the Commission.

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

1. Purpose
    The PCX, through its wholly owned subsidiary PCXE, proposes to 
reduce the per-share round lot transaction fee for NYSE-listed 
securities charged to ETP Holders and Sponsored Participants 
(collectively, ``Users'') that execute trades on ArcaEx. The PCX 
currently charges all Users in NYSE-listed securities a transaction fee 
of $0.003 per share for orders executed in the ArcaEx limit order book. 
The PCX is proposing to reduce this transaction fee to zero but to 
leave unchanged its current odd-lot fee for NYSE-listed securities.\5\ 
According to the PCX, the rationale for this change is to make the 
pricing for executions on the ArcaEx in NYSE-listed securities more 
competitive. The PCX evaluated the costs and the other changes proposed 
in this filing and determined that it was feasible to lower the 
transaction fee for NYSE-listed securities traded on the ArcaEx 
facility.
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    \5\ Odd-lot orders that are created as a result of a partial 
fill of a round lot would continue to be excluded from this fee.
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    The PCX also proposes to reduce the per-share User Transaction 
Credit for NYSE-listed securities to zero from $.002 per share. With 
respect to the PCX's market data revenue credit for NYSE listed 
securities (or ``Tape A Securities''), the PCX proposes to eliminate 
the Tape A rebate for all transactions but Cross Orders.\6\ A Cross 
Order on the ArcaEx will continue to receive a 50% tape revenue credit 
per qualifying trade.
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    \6\ A Cross Order is defined in PCXE Rule 7.31(s).
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2. Basis
    The PCX believes that the proposal is consistent with Section 6(b) 
of the Act,\7\ particularly Section 6(b)(4) of the Act,\8\ in that it 
provides for the equitable allocation of reasonable dues, fees and 
other charges among its members.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The PCX 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

    The PCX neither solicited nor received written comments on the 
proposed rule change.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) \9\ of the Act and Rule 19b-4(f) \10\ thereunder 
because it establishes or changes a due, fee, or other charge imposed 
by the Exchange. At any time within 60 days after the filing of this 
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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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 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 the 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-2003-40 and should be 
submitted by September 9, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-21131 Filed 8-18-03; 8:45 am]
BILLING CODE 8010-01-P