[Federal Register Volume 69, Number 117 (Friday, June 18, 2004)]
[Notices]
[Pages 34210-34211]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-13844]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49828; File No. SR-PCX-2004-51]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Pacific Exchange, Inc. Amending the Designated Options 
Examination Authority Fee on a Retroactive Basis

June 8, 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 June 1, 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 its Schedule of Fees and Charges 
by changing the Designated Options Examination Authority (``DOEA'') fee 
charged to its members, effective retroactively as of January 2004.\3\ 
The text of the proposed rule change is available at the Commission and 
the PCX.
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    \3\ On April 15, 2004, the Exchange filed an identical amendment 
to its Schedule of Fees and Charges, as immediately effective. See 
Securities Exchange Act Release No. 49671 (May 7, 2004), 69 FR 27665 
(May 17, 2004) (File No. SR-PCX 2004-32). Because the Exchange also 
seeks to apply the amendment to the DOEA fee on a retroactive basis, 
the Exchange is submitting this proposal for notice and comment.
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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 proposes to amend its Schedule of Fees and Charges to 
retroactively establish the DOEA fee that recently became effective 
pursuant to a previous PCX proposed rule change.\4\ Previously, the 
Exchange assessed a $2000/month DOEA fee in order to recover the 
Exchange's costs of DOEA examinations for which it would be 
responsible.\5\ At the time the Exchange set the original DOEA fee, it 
contemplated it would conduct some examinations itself and would 
contract with the NASD to conduct other examinations. For that reason, 
the Exchange adopted a flat fee of $2000/month based upon the 
preexisting $2000/month Designated Examination Authority (``DEA'') fee. 
The Exchange anticipated that the costs of the examinations, whether 
conducted by the NASD or by the Exchange, would be about the same as 
the costs of the DEA examinations.
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    \4\ Id.
    \5\ See Securities Exchange Act Release No. 47577 (March 26, 
2003), 68 FR 16109 (April 2, 2003) (File No. SR-PCX 2003-03).
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    The Exchange has relied exclusively on the NASD to conduct its DOEA 
examinations and as a result, amended its Schedule of Fees and Charges 
to change its DOEA fee from $2000/month

[[Page 34211]]

to a fee that would be a pass through of the costs that the Exchange 
pays the NASD for conducting DOEA examinations, plus a 17% 
administrative charge.\6\ In the previous proposed rule change, the 
Exchange represented that the 17% percent administration fee that it 
proposed to charge relates directly to costs actually incurred by the 
Exchange in the administration of this program. The Exchange now 
proposes to extend this relief retroactively back to all applicable 
fees due since January 2004.
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    \6\ See note 3 supra.
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2. Statutory Basis
    The Exchange believes that 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 fees 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 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 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 other 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 the 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. 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);
     Send an e-mail to [email protected]. Please include 
File Number SR-PCX-2004-51 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-2004-51. 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 20549-0609. 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-
2004-51 and should be submitted on or before July 9, 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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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-13844 Filed 6-17-04; 8:45 am]
BILLING CODE 8010-01-P