[Federal Register Volume 69, Number 100 (Monday, May 24, 2004)]
[Notices]
[Pages 29589-29591]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-11654]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49722; File No. SR-Amex-2004-29]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 by the 
American Stock Exchange LLC Relating to a Reduction in ETF Transaction 
Fees for Specialists and Registered Options Traders

May 18, 2004.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on April 30, 2004, 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, II, 
and III below, which Items have been prepared by the Amex. On May 13, 
2004, the Amex filed Amendment No. 1 to the proposed rule change.\3\ 
The proposed rule change, as amended, has been filed by the Amex as 
establishing or changing a due, fee, or other charge, pursuant to 
section 19(b)(3)(A)(ii) of the Act \4\ and Rule 19b-4(f)(2) \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 letter from Jeffrey Burns, Associate General Counsel, 
Amex, to Nancy Sanow, Assistant Director, Division of Market 
Regulation, SEC, dated May 12, 2004 (``Amendment No. 1''). Amendment 
No. 1 corrects a typographical error in the proposed rule language.
    \4\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \5\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to reduce transaction fees for specialists 
and registered options traders (``ROTs'') in connection with 
transactions in exchange-traded fund shares (``ETFs''). The text of the 
proposed rule change, as amended, is available at the Office of the 
Secretary, 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

[[Page 29590]]

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 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Amex proposes to reduce transactions charges imposed on 
specialists and ROTs in connection with Exchange transactions in ETFs. 
For purposes of the Exchange's fee schedule, ETFs include portfolio 
depositary receipts, index fund shares and trust issued receipts. The 
Exchange's current ETF transaction charges for specialists and ROTs are 
set forth in the following table:

  I.--Transaction Charges for ETFs Without Unreimbursed Fees to a Third
                                  Party
------------------------------------------------------------------------
                                      Specialists     Registered traders
------------------------------------------------------------------------
Per Share Side..................  $0.0055 ($.55 per   $0.0060 ($.60 per
                                   100 shares).        100 shares).
Subject to the following per      $300 (54,545        $300 (50,000
 trade maximums:.                  shares).            shares).
------------------------------------------------------------------------


      II.--Transaction Charges for ETFs for Which the Exchange Pays
                   Unreimbursed Fees to a Third Party
------------------------------------------------------------------------
                                      Specialists     Registered traders
------------------------------------------------------------------------
Per Share Side..................  $0.0059 ($.59 per   $0.0062 ($.62 per
                                   100 shares).        100 shares).
Subject to the following per      $300 (50,847        $300 (48,387
 trade maximums:.                  shares).            shares).
------------------------------------------------------------------------

    Transaction charges for specialists are capped at $700,000 per 
month per specialist unit.
* * * * *
    The proposed fee reductions are set forth below in the revised ETF 
transaction fee schedule:

I.--Proposed Transaction Charges for ETFs Without Unreimbursed Fees to a
                               Third Party
------------------------------------------------------------------------
                                      Specialists     Registered traders
------------------------------------------------------------------------
Per Share Side..................  $0.0044 ($.44 per   $0.0048 ($.48 per
                                   100 shares)..       100 shares).
Subject to the following per      $300 (68,181        $300 (62,500
 trade maximums:.                  shares).            shares).
------------------------------------------------------------------------


 II.--Proposed Transaction Charges for ETFs for Which the Exchange Pays
                   Unreimbursed Fees to a Third Party
------------------------------------------------------------------------
                                      Specialists     Registered traders
------------------------------------------------------------------------
Per Share Side..................  $0.0048 ($.48 per   $0.0050 ($.50 per
                                   100 shares)..       100 shares).
Subject to the following per      $300 (62,500        $300 (60,000
 trade maximums:.                  shares).            shares).
------------------------------------------------------------------------

    Proposed transaction charges for specialists are capped at $500,000 
per month per specialist unit.
* * * * *
    The Exchange submits that the proposal would be effective on May 1, 
2004 and constitutes a 20% reduction (both specialists and ROTs) for 
ETF transaction charges without reimbursed fees to third parties and an 
18.64% reduction for specialists and a 19.35% reduction for ROTs for 
ETF transaction charges for which the Exchange pays unreimbursed fees 
to a third party.
    The Exchange believes that a reduction in ETF transaction fees is 
warranted in order to provide greater incentives for specialists and 
ROTs to competitively quote their markets and attract additional order 
flow. In addition, the Exchange also believes that the reduction would 
help to maintain existing floor operations of member firms at the Amex.
2. Statutory Basis
    The Exchange believes that the proposed fee change, as amended, is 
consistent with Section 6(b)(4) of the Act \6\ regarding the equitable 
allocation of reasonable dues, fees and other charges among Exchange 
members and other persons using Exchange facilities.
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    \6\ 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, as 
amended, will impose any burden on competition not necessary or 
appropriate in furtherance of purposes of the Act.

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, as amended.

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

    Because the foregoing rule change, as amended, establishes or 
changes a due, fee, or other charge imposed by the Exchange, it has 
become effective pursuant to section 19(b)(3)(A)(ii) of the Act \7\ and 
subparagraph (f)(2) of Rule 19b-4 \8\ thereunder. At any time within 60 
days of the filing of the proposed rule

[[Page 29591]]

change, as amended, 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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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 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, as amended, 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-Amex-2004-29 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-Amex-2004-29. 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, as 
amended, that are filed with the Commission, and all written 
communications relating to the proposed rule change, as amended, 
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 Amex. 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-Amex-2004-29 and should be 
submitted on or before June 14, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 04-11654 Filed 5-21-04; 8:45 am]
BILLING CODE 8010-01-P