[Federal Register Volume 69, Number 146 (Friday, July 30, 2004)]
[Notices]
[Pages 45875-45876]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17386]



[[Page 45875]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50082; File No. SR-PCX-2004-68]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change and Amendment No. 
1 Thereto by the Pacific Exchange, Inc. Relating to the Extension of a 
Linkage Fee Pilot Program

July 26, 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 July 15, 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 July 21, 2004, the PCX filed 
Amendment No. 1 to the proposed rule change.\3\ The Commission is 
publishing this notice to solicit comments on the proposed rule change, 
as amended, from interested persons and is approving the proposed rule 
change, as amended, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ CFR 240.19b-4.
    \3\ See letter from Steven B. Matlin, Senior Counsel, Regulatory 
Policy, PCX to Nancy Sanow, Assistant Director, Commission, dated 
July 20, 2004 (``Amendment No. 1''). In Amendment No. 1, the 
Exchange proposes to make technical corrections to the Schedule of 
Fees and Charges for Exchange Services, originally submitted as 
Exhibit A to the proposed rule change.
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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 
For Exchange Services to extend until July 31, 2005 the current pilot 
program regarding transaction fees charged for trades executed through 
the intermarket options linkage (``Linkage''). The text of the proposed 
fee schedule is available at the principal office of Exchange and at 
the Commission's Public Reference Room.

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 III below. The self-regulatory organization 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 purpose of this proposed rule change is to extend for one year 
the pilot program establishing PCX fees for Principal (``P'') Orders 
and Principal Acting as Agent (``P/A'') Orders executed through 
Linkage. The fees currently are effective for a pilot program set to 
expire on July 31, 2004, and this filing would extend the fees through 
July 31, 2005. The two fees the PCX charges for P and P/A Orders are: 
the $.21 per contract side basic execution fees for trading on the PCX 
and a $.05 comparison fee per contract side. These are the same fees 
that all PCX Option Trading Permit Holders pay for non-customer 
transactions executed on the Exchange. The Exchange does not charge for 
the execution of Satisfaction Orders sent through Linkage and is not 
proposing to charge for such orders.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with section 
6(b) of the Act,\4\ in general, and section 6(b)(4),\5\ in particular, 
in that it provides for the equitable allocation of dues, fees and 
other charges among its members and other persons using its facilities 
for the purpose of executing P and P/A Orders that are routed to the 
Exchange from other market centers.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. 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-2004-68 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-2004-68. 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-
2004-68 and should be submitted on or before August 20, 2004.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of the Act and the 
rules

[[Page 45876]]

and regulations thereunder, applicable to a national securities 
exchange,\6\ and, in particular, with the requirements of section 6(b) 
of the Act \7\ and the rules and regulations thereunder. The Commission 
finds that the proposed rule change, as amended, is consistent with 
section 6(b)(4) of the Act,\8\ which requires that the rules of the 
Exchange provide for the equitable allocation or reasonable dues, fees 
and other charges among its members and other persons using its 
facilities. The Commission believes that the extension of the Linkage 
fee pilot until July 31, 2005 will give the Exchange and the Commission 
further opportunity to evaluate whether such fees are appropriate.
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    \6\ In approving this rule, the Commission notes that it has 
considered its impact on efficiency, competition and capital 
formation. 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
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    The Commission finds good cause, pursuant to section 19(b)(2) of 
the Act,\9\ for approving the proposed rule change, as amended, prior 
to the thirtieth day after the date of publication of the notice of the 
filing thereof in the Federal Register. The Commission believes that 
granting accelerated approval will preserve the Exchange's existing 
pilot program for Linkage fees without interruption as the PCX and the 
Commission further consider the appropriateness of Linkage fees.
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    \9\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the Act 
\10\ that the proposed rule change, as amended, (SR-PCX-2004-68) is 
hereby approved on an accelerated basis for a pilot period to expire on 
July 31, 2005.
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    \10\ Id.

    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. 04-17386 Filed 7-29-04; 8:45 am]
BILLING CODE 8010-01-P