[Federal Register Volume 70, Number 148 (Wednesday, August 3, 2005)]
[Notices]
[Pages 44713-44714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4126]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52151; File No. SR-PCX-2005-86]


Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of 
Filing and Order Granting Accelerated Approval of a Proposed Rule 
Change To Extend the Linkage Fee Pilot Program

July 28, 2005.
    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 21, 2005, 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. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons and is approving the proposal on an accelerated basis for a 
pilot period through July 31, 2006.
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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 proposes to amend its Schedule of Fees and Charges for 
Exchange Services to extend until July 31, 2006 the current pilot 
program regarding transaction fees charged for trades executed on the 
Exchange that are submitted through the intermarket option linkage 
(``Linkage'').\3\ The text of the proposed fee schedule is available on 
the Exchange's Web site (http://www.pacificex.com), at the Exchange's 
Office of the Secretary, and at the Commission's Public Reference Room.
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    \3\ At the request of the Exchange, the Commission staff made a 
change to clarify the statement regarding the orders to which the 
transaction fees apply. Telephone conversation between Steven 
Matlin, Senior Counsel, Exchange, and Kim Allen, Attorney, Division 
of Market Regulation, on July 26, 2005.
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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 III below. The Exchange has prepared summaries, set

[[Page 44714]]

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 the proposed rule change is to extend for one year 
the pilot program establishing Exchange fees for Principal (``P'') 
Orders and Principal Acting as Agent (``P/A'') Orders executed on the 
Exchange that are submitted through Linkage. The fees currently are 
effective for a pilot program set to expire on July 31, 2005, and this 
proposal would extend such fees through July 31, 2006. The two fees the 
Exchange charges for P and P/A orders are: The basic execution fee for 
trading on the Exchange; and a $.05 comparison fee, each 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) of the Act \5\ in 
particular, in that the proposed rule change 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/A Orders or 
P 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-2005-86 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303. All submissions should refer to File Number 
SR-PCX-2005-86. 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 Room. Copies of such filing also will be available for 
inspection and copying at the principal office of the Exchange. 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-2005-86 and should be 
submitted on or before August 24, 2005.

IV. Commission's Findings and Order Granting Accelerated Approval of 
the 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 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 that the proposed rule change is consistent with Section 6(b)(4) 
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 other persons using its facilities. The 
Commission believes that the extension of the Linkage fee pilot until 
July 31, 2006 will give the Exchange and the Commission further 
opportunity to evaluate whether such fees are appropriate.
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    \6\ In approving this proposal, the Commission 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)(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 prior to the thirtieth 
day after publication of notice thereof in the Federal Register. The 
Commission believes that granting accelerated approval of the proposed 
rule change will preserve the Exchange's existing pilot program for 
Linkage fees without interruption as the Exchange 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 (SR-PCX-2005-86) is hereby 
approved on an accelerated basis for a pilot period to expire on July 
31, 2006.
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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. E5-4126 Filed 8-2-05; 8:45 am]
BILLING CODE 8010-01-P