[Federal Register Volume 69, Number 36 (Tuesday, February 24, 2004)]
[Notices]
[Pages 8509-8510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-3885]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49263; File No. SR-PCX-2004-05]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Pacific Exchange, Inc. To Amend Its Rules To Impose a 
Connectivity Fee Applicable to Non-Members That Maintain a Connectivity 
Line With the Exchange

February 17, 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 January 28, 2004, 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. 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 Exchange is proposing to amend the Floor, Market Maker and 
Remote Market Maker Fees portion of its Schedule of Fees and Charges 
(``Schedule''). The text of the proposed change to the fee schedule is 
available at the Exchange 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange is proposing to amend the Floor, Market Maker and 
Remote Market Maker portion of its Schedule in order to create a 
connectivity fee of $300 per line per month that would be applicable to 
non-members that maintain a connectivity line with the Exchange.
    On December 12, 2003, the Exchange filed a proposed rule change to 
implement a connectivity fee applicable to members of the Exchange.\3\ 
This fee became effective upon filing.\4\ At this time, the Exchange 
wishes to implement the same connectivity fee applicable non-
members.\5\ As the Exchange previously stated, it maintains a 
significant number of telecommunications lines that support 
connectivity from various routing firms from both members and non-
members of the Exchange. Thus, the PCX dedicates a significant amount 
of resources to installation and maintenance. The installation and 
maintenance costs for these lines are the same for members and non-
members. Therefore, the Exchange believes that the proposed fee will 
provide for the cost recovery of the expenses incurred as part of the 
initial deployment and ongoing testing of these lines.
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    \3\ See Securities Exchange Act Release No. 48970 (December 22, 
2003), 68 FR 75306 (December 30, 2003) (SR-PCX-2003-67).
    \4\ See Section 19(b)(3)(A)(ii) of the Act. 15 U.S.C. 
78s(b)(3)(A)(ii).
    \5\ The Exchange does not anticipate that a significant number 
of non-members will be billed as a result of this proposed rule 
change. However, the proposed rule change attempts to align the 
connectivity fee with the parties that are establishing connections 
with this market center, irrespective of whether the parties are 
members. Accordingly, the Exchange is expanding the scope of the 
connectivity fee so that it can appropriately assess the fee on non-
member firms such as correspondents and service bureaus.
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2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act,\6\ in general, and Section 6(b)(4) of the Act,\7\ in 
particular, in that it provides for the equitable allocation of 
reasonable dues, fees and other charges among its members and other 
persons using its facilities.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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

[[Page 8510]]

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 were neither solicited nor received with respect 
to the proposed rule change.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    (A) by order approve such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-PCX-2004-05. 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 PCX. All 
submissions should refer to File No. SR-PCX-2004-05 and should be 
submitted by March 16, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-3885 Filed 2-23-04; 8:45 am]
BILLING CODE 8010-01-P