[Federal Register Volume 69, Number 87 (Wednesday, May 5, 2004)]
[Notices]
[Pages 25162-25163]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-10199]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49631; File No. SR-PCX-2004-35]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. To 
Amend the Market Maker Fees Portion of Its Schedule of Fees and Charges 
in Order To Extend a Temporary Waiver of the Market Maker Fees for 
Those Market Makers That Utilize More Than One Seat

April 29, 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 19, 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 PCX has designated this 
proposal as one establishing or changing a due, fee, or other charge 
imposed by the PCX under section 19(b)(3)(A) of the Act,\3\ which 
renders the proposal effective upon filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
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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 Market Maker Fees portion of 
its Schedule of Fees and Charges (``Schedule'') in order to extend a 
temporary waiver of the Market Maker fees for those Market Makers that 
utilize more than one seat. 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 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 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this proposed rule change is to extend for one month 
the temporary waiver of the Market Maker fees for those Market Makers 
that utilize more than one seat. The Exchange is proposing to amend the 
Market Maker Fees portion of its Schedule in order to extend the 
previously effective temporary waiver of the Market Maker fees for 
those Market Makers that utilize more than one seat.\4\
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    \4\ See Securities Exchange Act Release No. 49207 (February 6, 
2004), 69 FR 07277 (February 13, 2004) (File No. SR-PCX-2004-04).
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    Under the current Schedule, all Market Makers are assessed a fee of 
$1,750 per month for each seat for which such Market Maker holds a 
primary appointment. In connection, PCX Rule 6.35(g)(2) permits Market 
Makers to increase the number of issues within their primary 
appointments depending on the number of seats that a Market Maker 
holds.\5\ Hence, the PCX believes a Market Maker would benefit from 
additional issues as a result of holding multiple seats.
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    \5\ See PCX Rule 6.35(g)(2).
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    The Exchange proposes to extend the temporary waiver of the $1,750 
Market Maker fee for all Market Makers for each additional seat (for 
which the Market Maker holds a primary appointment) beyond the first 
seat held by such Market Maker. In other words, a Market Maker will 
only be assessed one Market Maker fee of $1,750 per month whether the 
Market Maker utilizes one seat or multiple seats. The PCX believes that 
a temporary waiver of the Market Maker fee in this limited circumstance 
is appropriate to encourage participation by a larger number of Market 
Makers on PCX Plus.\6\ As PCX Plus continues to expand, PCX believes 
this temporary waiver will provide Market Makers with an incentive to 
take on a larger number of issues without incurring additional Market 
Maker fees. Therefore, the PCX believes the added participation will 
result in increased liquidity, which, in turn, will further 
competition. This waiver will remain in effect until May 28, 2004 or 
such earlier date as determined by the Exchange.
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    \6\ The temporary waiver of the Market Maker fee only applies to 
Market Makers on PCX Plus, because only Remote Market Makers on PCX 
Plus utilize multiple seats. See PCX Rule 6.35(g)(2). PCX represents 
that this waiver has no impact upon floor-based operations. 
Telephone conversation between Steven B. Matlin, Senior Counsel, 
Regulatory Policy, PCX, and A. Michael Pierson, Attorney, Division 
of Market Regulation, Commission on April 26, 2004.
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2. Statutory Basis
    The Exchange believes the proposal is consistent with Section 6(b) 
of the Act,\7\ in general, and Section 6(b)(4) of the Act,\8\ in 
particular, 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 Exchange does not believe the proposed rule change will impose 
any 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. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The proposed rule change has become effective pursuant to Section

[[Page 25163]]

19(b)(3)(A)(ii) of the Act \9\ and subparagraph (f)(2) of Rule 19b-4 
\10\ thereunder, because it establishes or changes a due, fee, or other 
charge imposed by the Exchange. At any time within 60 days of the 
filing of such 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 the 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 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 e-mail to [email protected]. Please include File 
Number SR-PCX-2004-35 on the subject line.

Paper Comments

     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-2004-35. 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 Section, 450 Fifth 
Street, NW., Washington, DC 20549. 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-
2004-35 and should be submitted on or before May 26, 2004.

    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. 04-10199 Filed 5-4-04; 8:45 am]
BILLING CODE 8010-01-P