[Federal Register Volume 69, Number 184 (Thursday, September 23, 2004)]
[Notices]
[Page 57127]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2350]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50401; File No. SR-Phlx-2004-39]


Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Order Granting Approval to Proposed Rule Change and Amendment No. 1 
Thereto Relating to Retroactive Application of Permit Holder Fees and 
Billing Policies

September 16, 2004.
    On June 30, 2004, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission''), pursuant to section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to: (1) Apply retroactively a 
recent amendment to its schedule of fees and charges (``Fee Schedule'') 
that adopted a permit fee category, designated as ``Other,'' for permit 
holders who did not fit within any other permit fee categories; (2) 
apply retroactively a billing policy that set the date of notification 
for terminating a permit as the date that permit fee billing would 
cease; and (3) assess retroactively only one monthly permit fee in 
certain limited situations where two monthly permit fees otherwise 
would be imposed.\3\ The proposal would apply these Fee Schedule 
changes and billing policies retroactively to February 2, 2004, the 
date that the permit fees were first imposed. On July 12, 2004, Phlx 
filed Amendment No. 1 to the proposed rule change.\4\ The proposed rule 
change, as amended, was published for comment in the Federal Register 
on August 6, 2004.\5\ The Commission received no comments on the 
proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Phlx previously adopted these changes to its Fee Schedule 
and billing policies in a rule change that was effective on May 3, 
2004, the date it was filed with the Commission. See Securities 
Exchange Act Release No. 49856 (June 15, 2004), 69 FR 3441 (June 21, 
2004) (SR-Phlx-2004-32).
    \4\ See letter from Murray L. Ross, Phlx, to Nancy Sanow, 
Assistant Director, Division of Market Regulation, SEC, dated July 
9, 2004 (``Amendment No. 1''). In Amendment No. 1, the Exchange 
removed references in the Fee Schedule to the proposed date that the 
retroactive fees would take effect.
    \5\ See Securities Exchange Act Release No. 50129 (July 30, 
2004), 69 FR 47970.
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    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange \6\ 
and, in particular, the requirements of section 6(b) of the Act \7\ and 
the rules and regulations thereunder. The Commission finds specifically 
that the proposed rule change, as amended, is consistent with section 
6(b)(5) of the Act,\8\ which requires that the rules of the Exchange 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its members and issuers and other persons using its 
facilities. The proposed rule change would apply recent amendments to 
the Exchange's Fee Schedule and billing policies retroactively to 
February 2, 2004, the date that permit fees were first imposed by the 
Exchange in connection with its recent demutualization.\9\ The proposed 
rule change is intended to remedy the fact that a few permit holders 
did not fit into any of the permit fee categories initially established 
by the Exchange and thus were not subject to permit fees as of February 
2, 2004. Thus, the proposed rule change is intended to apply the 
Exchange's permit fees and permit fee billing practices in an even-
handed manner to all Exchange member organizations since the 
introduction of the permit fees on February 2, 2004.
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    \6\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's 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)(5).
    \9\ See Securities Exchange Act Release No. 49098 (January 16, 
2004), 69 FR 3974 (January 27, 2004) (Order approving the 
demutualization of Phlx).
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    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-Phlx-2004-39), as amended, 
be, and hereby is, approved.
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    \10\ 15 U.S.C. 78s(b)(2).

    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).

Margaret H. McFarland,
Deputy Secretary.
 [FR Doc. E4-2350 Filed 9-22-04; 8:45 am]
BILLING CODE 8010-01-P