[Federal Register Volume 69, Number 78 (Thursday, April 22, 2004)]
[Notices]
[Pages 21873-21875]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-9162]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49569; File No. SR-PCX-2004-26]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 by the 
Pacific Exchange, Inc. To Clarify the PCX General Membership Fees 
Portion of the PCX Schedule of Fees and Charges

April 15, 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 April 6, 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 and II below, which Items 
have been prepared by the Exchange. On April 14, 2004, the Exchange 
amended the proposed rule change.\3\ The Exchange filed the proposal 
pursuant to section 19(b)(3)(A) of the Act,\4\ and Rule 19b-4(f)(6)\5\ 
thereunder, which renders the proposal effective upon filing with the 
Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change, as amended, from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See April 13, 2004 letter from Tania J.C. Blanford, 
Regulatory Policy, PCX, to Nancy J. Sanow, Assistant Director, 
Division of Market Regulation, Commission, and attachments 
(``Amendment No. 1''). Amendment No. 1 completely replaced and 
superseded the original proposed rule change. In Amendment No. 1, 
the PCX asks the Commission to review the proposed rule change 
pursuant to section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) 
thereunder. The Commission considers the original proposed rule 
change to have satisfied the five-day pre-filing notice requirement 
under Rule 19b-4(f)(6). Additionally, for purposes of calculating 
the 60-day abrogation period, the Commission considers the proposed 
rule change to have been filed on April 14, 2004, the day the PCX 
filed Amendment No. 1. 17 CFR 240.19b-4(f)(6).
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).

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[[Page 21874]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to make clarifying changes to its 
Schedule of Fees and Charges (``Schedule''). The text of the proposed 
rule change is available at the PCX 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 PCX included statements 
concerning the purpose of and basis for its proposal and discussed any 
comments it received regarding the proposal. The text of these 
statements may be examined at the places specified in Item IV below. 
The PCX 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 make two clarifying amendments to the 
PCX General Membership Fees portion of its Schedule.
    First, the Exchange wishes to make a clarifying change to the 
``Initial Membership Fee'' portion of the Schedule. On December 12, 
2003, the Exchange submitted a rule filing to amend PCX's membership-
related fees portion of the Schedule, which became effective upon 
filing.\6\ In that filing (SR-PCX-2003-69), the Exchange proposed to 
amend the structure of its Initial Membership Fee and incorporate a 
flat fee of $1,500 for all seat activations for all Member 
Organizations and Nominees.\7\ While the simplicity of the new fee 
structure has been successful, there has been some confusion as to the 
fee name. Currently, the fee is called ``Initial Membership Fee,'' 
which is a misnomer as the fee relates specifically to membership 
activations. Hence, the Exchange wishes to accurately reflect this fee 
as ``Activation Fee.''
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    \6\ See Securities Exchange Act Release No. 48971 (Dec. 22, 
2003), 68 FR 75307 (Dec. 30, 2003) (SR-PCX-2003-69).
    \7\ The initial seat activation fee applies to each Member 
Organization as well as each Nominee to a Member Organization since 
activation for each Nominee requires a separate administrative 
process.
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    Second, the Exchange proposes to make clarifying amendments to the 
``Options Orientation Fee'' portion of the Schedule. On September 29, 
2003, the Exchange filed with the Commission a proposed rule change to 
amend the Options Orientation Fee, which became effective upon 
filing.\8\ In that filing (SR-PCX-2003-57), the Exchange restructured 
its Options Orientation Fee as the Exchange transitioned its 
orientation and testing process from a third party provider to the PCX 
and NASD. Thus, the restructured ``Options Orientation Fee'' is only 
intended to apply to applicants who are required to complete the PCX 
Orientation and Testing Program in order to satisfy applicable 
examination requirements set forth in PCX Rule 1.7. For these 
applicants, the investigation and fingerprinting fees are included as 
part of the Options Orientation Fee. Applicants who have otherwise 
satisfied applicable examination requirements of PCX Rule 1.7 (e.g., 
Series 7, Series 44, Series 45, etc.), and thus are not required to 
complete the PCX Orientation and Testing Program, are only assessed the 
$125 investigation fee and the $35 fingerprinting fee. In other words, 
these applicants will not be assessed the $1,000 Options Orientation 
Fee. There has been confusion among the Members as to whether the 
Options Orientation Fee is inclusive of the investigation and 
fingerprinting fees, and vice versa. Thus, the Exchange wishes to 
clarify the aforementioned fees by including the details stated above 
in the Schedule.
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    \8\ See Securities Exchange Act Release No. 48597 (Oct. 7, 
2003), 68 FR 59439 (Oct. 15, 2003) (SR-PCX-2003-57).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) \9\ of the Act, in general, and furthers the 
objectives of section 6(b)(5),\10\ in particular, because it is 
designed to promote just and equitable principals of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, and to remove impediments and perfect the 
mechanisms of a free and open market and to protect investors and the 
public interest.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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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 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 on the proposed rule change were neither solicited 
nor received.

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

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) Impose any significant burden on competition; and
    (iii) Become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to section 19(b)(3)(A) of the Act\11\ and 
Rule 19b-4(f)(6) thereunder.\12\ 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. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
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    The PCX has asked the Commission to waive the 30-day operative 
delay. The Commission believes waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Such waiver will allow the clarification to be implemented immediately. 
For these reasons, the Commission designates the proposal to be 
effective and operative upon filing with the Commission.\13\
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    \13\ For purposes only of eliminating the 30-day operative 
delay, 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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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. Comments may be submitted by any of 
the following methods:

Electronic comments:

     Use the Commission's Internet comment form 
(http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please 
include File Number SR-PCX-2004-26 on the subject line.

Paper comments:


[[Page 21875]]


     Send paper comments in triplicate to Jonathan G. 
Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, 
NW., Washington, DC 20549-0609.
    All submissions should refer to File Number SR-PCX-2004-26. 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, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/ 
rules/sro.shtml). 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 also will be available for inspection and copying at the 
principal office of the PCX. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-PCX-2004-26 and should be submitted on or before May 13, 
2004.

    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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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-9162 Filed 4-21-04; 8:45 am]
BILLING CODE 8010-01-P