[Federal Register Volume 68, Number 244 (Friday, December 19, 2003)]
[Notices]
[Pages 70855-70857]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-31310]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48925; File No. SR-Phlx-2003-78]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. Relating to Fees for Remote Specialists

December 15, 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 November 21, 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 Phlx. The 
Commission is publishing this notice to

[[Page 70856]]

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 Phlx proposes to amend its schedule of dues, fees and charges 
to provide that fees, dues, discounts, credits and charges that apply 
to Phlx remote competing specialists will also be applicable to Phlx 
remote primary specialists.\3\ The text of the proposed rule change is 
available at the Office of the Secretary, the Phlx, and at the 
Commission.
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    \3\ Subsection (b)(5) of Phlx Rule 229A, Operation of PACE 
System when Competing Specialists are Trading, provides in part that 
``Primary Specialist'' shall mean the primary specialist identified 
as such by the Equity Allocation, Evaluation and Securities 
Committee. Subsection (b)(6) of Phlx Rule 229A provides in part that 
``Competing Specialist'' shall mean any competing specialist 
identified as such by the Equity Allocation, Evaluation and 
Securities Committee pursuant to Phlx Rule 460. Phlx Rule 460, 
Procedures for Competing Specialists, sets forth procedures for 
applying to become a competing specialist as well as competing 
specialists' obligations.
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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 Phlx 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 Phlx 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 August 6, 2002, in connection with the planned commencement of 
the Exchange's remote competing specialist program, the Exchange 
amended its fee schedule to specify fees, dues, discounts, credits and 
charges applicable to Phlx remote competing specialists.\4\ Because at 
that time the Exchange's remote specialist program was to be limited to 
remote competing (as opposed to primary) specialists, that proposed 
rule change applied only to remote competing specialists.\5\
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    \4\ See Securities Exchange Act Release No. 46392 (August 21, 
2002), 67 FR 55294 (August 28, 2002) (File No. SR-Phlx-2002-45) 
(Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change Regarding Fees for Remote Competing Specialists). In that 
filing, the Exchange adopted a number of new fees applicable to 
members and member organizations in connection with their remote 
competing specialist operations, and amended the existing exemption 
of certain member organizations operating on the Exchange's trading 
floor from the Exchange's Examinations Fee in light of the 
commencement of the remote competing specialist program. The 
Exchange noted in that filing that certain of its current dues, fees 
and charges are assessed for privileges the Exchange extends with 
respect to, and services it provides on, the physical equity trading 
floor. These fees include the Trading Post/Booth Fee; Trading Post 
with Kiosk Fee; the Kiosk Construction Fee; the Controller Space 
Fee; the Floor Facility Fees; the Direct Wire to the Floor Fee; the 
Telephone System Line Extensions Fee; the Quotron Equipment Fee; the 
Instinet, Reuters Equipment Fee; the Trading Floor Personnel 
Registration Fee; the Computer Equipment Services, Repairs or 
Replacements Fee and the Computer Relocation Requests Fee. The 
Exchange represents that it does not charge these fees to remote 
specialists.
    \5\ See Phlx Rule 461, PACE Remote Specialist, and Securities 
Exchange Act Release No. 45184 (December 21, 2001), 67 FR 622 
(January 4, 2002) (order approving File No. SR-Phlx-2001-98).
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    The Commission recently approved a proposed rule change to expand 
Phlx's remote specialist program to include remote primary specialists 
in addition to remote competing specialists.\6\ The purpose of this 
proposed rule change is to extend the same fees, dues, discounts, 
credits and charges applicable to remote competing specialists to 
remote primary specialists.\7\ According to the Exchange, the revenue 
generated by these fees will enhance the Exchange's ability to provide 
a marketplace for its remote primary and competing specialists and 
other members. Accordingly, the text of Appendix A of the Exchange's 
fee schedule is amended by the deletion of the word ``competing'' in 
footnote 22. Also, the term ``RS'' (for ``Remote Specialist'') is 
substituted for the term ``RCS'' (for ``Remote Competing Specialist'') 
in the reference to the ``Regular ETP RCS Fee.'' \8\ All existing 
references to ``Remote Specialists'' on Appendix A will now be 
construed to include both remote primary specialists and remote 
competing specialists.
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    \6\ See Securities Exchange Act Release No. 48816 (November 20, 
2003), 68 FR 66912 (November 28, 2003) (order approving File No. SR-
Phlx-2003-10). In SR-Phlx-2003-10, the Exchange proposed to amend 
its rules to permit ``primary specialists'' to trade away from the 
Phlx floor, on a remote basis, in limited circumstances. That filing 
was approved by the Commission on November 20, 2003.
    \7\ A related proposed rule change has been filed by Stock 
Clearing Corporation of Philadelphia with the Commission to amend 
its schedule of dues, fees and charges as it relates to remote 
specialists. See File No. SR-SCCP-2003-06.
    \8\ Currently, the Regular ETP RCS Fee of $1,000.00 per month is 
charged in lieu of the Regular ETP Fee for equity trading permit 
holders whose Exchange business is limited to operating as a remote 
competing specialist. The Exchange now proposes to charge that fee 
in lieu of the Regular ETP Fee for equity trading permit holders 
whose Exchange business is limited to operating as a remote 
competing or remote primary specialist or both, and to change the 
name of the fee accordingly to the ``Regular ETP RS Fee.''
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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 
represents that the proposal is designed to enable it to provide a 
competitive marketplace for its members.
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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 Exchange 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

    The foregoing proposed rule change has been designated as a fee 
change pursuant to section 19(b)(3)(A)(ii) of the Act \11\ and Rule 
19b-4(f)(2)\12\ thereunder. Accordingly, the proposal will take effect 
upon filing with the Commission. At any time within 60 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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    \11\ 15 U.S.C. 78(s)(b)(3)(A)(ii).
    \12\ 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.

[[Page 70857]]

SR-Phlx-2003-78. This file number should be included on the subject 
line if e-mail is used. To help the Commission process and review your 
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 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 Phlx. All 
submissions should refer to File No. SR-Phlx-2003-78 and should be 
submitted by January 9, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-31310 Filed 12-18-03; 8:45 am]
BILLING CODE 8010-01-P