[Federal Register Volume 69, Number 8 (Tuesday, January 13, 2004)]
[Notices]
[Pages 2018-2020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-613]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49025; File No. SR-Amex-2003-106]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change and Amendment No. 
1 Thereto by the American Stock Exchange LLC Relating to the 
Retroactive Application of a Monthly Options Transaction Fee Cap for 
Specialists and Registered Options Traders

January 6, 2004.
    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 December

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1, 2003, the American Stock Exchange LLC (``Amex'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Amex. On January 2, 2004, the Exchange 
amended the proposal.\3\ The Commission is publishing this notice to 
solicit comments on the proposed rule change, as amended, from 
interested persons, and is granting accelerated approval to the 
proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Jeffrey P. Burns, Associate General Counsel, 
Amex, to Joseph P. Morra, Special Counsel, Division of Market 
Regulation, Commission, dated December 31, 2003 (``Amendment No. 1 
''). In Amendment No. 1, Amex explained that it requested 
accelerated approval of the filing so that the rebated monies could 
be allocated in 2003 for the purpose of closing the books for the 
year.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to retroactively apply a fee cap of $72,000 
per month in any single options class for specialists and registered 
options traders (``ROTs'') subject to options transaction fees from 
July 1, 2003 to November 30, 2003. The text of the proposed rule change 
is available at the Amex 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 Amex 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 III below. The Amex 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 Amex proposed, in a companion filing (SR-Amex-2003-104),\4\ to 
adopt a fee cap of $72,000 per month in any single option class, 
exclusive of license fees, for specialists and ROTs subject to 
transaction fees.\5\ With the instant proposed rule change, Amex 
proposes that this fee cap be effective as of July 1, 2003 so that the 
Amex will retroactively apply the fee cap from July 1, 2003 to November 
30, 2003. Accordingly, the Exchange will rebate to those specialists 
and ROTs transaction fees (exclusive of the options licensing fee) that 
have been paid in excess of the $72,000 fee cap in any single option 
class in any one month from July 1, 2003 through November 30, 2003.
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    \4\ See Securities Exchange Act Release No. 49019 (January 5, 
2004) (File No. SR-Amex-2003-104). This proposal was filed pursuant 
to section 19(b)(3)(A) of the Act and was effective upon filing.
    \5\ For this purpose, transaction fees applicable to specialists 
and ROTs include the options transaction fee, the options comparison 
fee, and the options floor brokerage fee.
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    The Exchange believes that specialists and ROTs who bring in 
substantial order flow to the Exchange should be rewarded through the 
proposed fee reduction. As proposed, specialists and ROTs in any single 
option class will be required to trade 200,000 contracts for equity 
options and 232,258 contracts in index options to reach the fee cap 
(based on the current rate of $0.36 per contract side). However, as 
indicated in SR-Amex-2003-104,\6\ the number of contracts required to 
reach the fee cap in the top 300 equity options may increase as a 
result of the proposed market share fee program. Although the Exchange 
submits that only a small number of firms will likely reach these 
limits, the proposal is intended to provide incentives to firms to 
continue to attract order flow.
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    \6\ See supra note 4.
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2. Statutory Basis
    The Exchange believes that the proposed fee change is consistent 
with Section 6(b)(4) of the Act \7\ regarding the equitable allocation 
of reasonable dues, fees and other charges among exchange members and 
other persons using exchange facilities.
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    \7\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Amex believes the proposed rule change will impose no 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 with respect to the 
proposed rule change.

III. 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. Comments 
may also be submitted electronically at the following e-mail address: 
[email protected]. All comment letters should refer to File No. SR-
Amex-2003-106. 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 Amex. All 
submissions should refer to File No. SR-Amex-2003-106 and should be 
submitted by February 3, 2004.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    The Amex has asked the Commission to approve the proposed rule 
change, as amended, on an accelerated basis, so that the fee reduction 
can be allocated in 2003 and the Amex and its member firms may close 
its books for the year 2003.
    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange, 
and in particular, the requirements of Section 6(b)(4) of the Act.\8\ 
Specifically, the Commission believes that the proposal is consistent 
with Section 6(b)(5) of the Act,\9\ which requires, among other things, 
that the rules of a national securities exchange be designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest.\10\ The

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Commission believes that the proposal may increase order flow to the 
Exchange, which should enhance liquidity on the Amex.
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    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
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    The Commission finds good cause for approving the proposed rule 
change, as amended, prior to the thirtieth day after the date of 
publication of the notice of filing thereof in the Federal Register. 
Specifically, the Commission notes that accelerated approval will allow 
the Amex and its member firms to close its books for the year 2003 
without unnecessary delay. Accordingly, the Commission believes that 
there is good cause, consistent with Sections 6(b)(4)\11\ and 19(b)(2) 
of the Act,\12\ to approve the proposal, as amended, on an accelerated 
basis.
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    \11\ See supra note 8.
    \12\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\13\ that the proposed rule change (SR-Amex-2003-106), as amended, 
is hereby approved on an accelerated basis.
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    \13\ Id.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 04-613 Filed 1-12-04; 8:45 am]
BILLING CODE 8010-01-U