[Federal Register Volume 70, Number 162 (Tuesday, August 23, 2005)]
[Notices]
[Pages 49338-49339]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4584]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52267; File No. SR-Amex-2005-081)


Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto Relating to a Temporary Suspension of 
Specialist Transaction Charges for the Nasdaq-100 Tracking 
Stock[supreg] (QQQQ)

August 15, 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 August 1, 2005, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or the ``Commission'') the proposed rule change as described 
in items I, II, and III below, which items have been prepared by Amex. 
On August 15, 2005, the Exchange filed Amendment No. 1 to the 
proposal.\3\ Amex has designated the proposed rule change, as amended, 
as establishing or changing a due, fee, or other charge imposed by the 
Exchange pursuant to section 19(b)(3)(A)(ii) of the Act \4\ and Rule 
19b-4(f)(2) thereunder,\5\ 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\ In Amendment No. 1, Amex made minor technical changes to the 
proposed rule text and provided further discussion on how the 
proposal is consistent with the requirement under Section 6(b)(4) of 
the Act to provide for the equitable allocation of reasonable dues, 
fees and other charges among its members and issuers and other 
persons using its facilities. See 15 U.S.C. 78f(b)(4).
    \4\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \5\ 7 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 amend the Amex Equity and Exchange Traded 
Funds and Trust Issued Receipts Fee Schedules (the ``Amex Fee 
Schedules'') to extend the suspension of transaction charges for 
specialist orders in connection with the trading of the Nasdaq-100 
Index Tracking Stock[supreg] (Symbol: QQQQ) from August 1, 2005 through 
August 31, 2005. The text of the proposed rule change, as amended, is 
available on Amex's Web site (http://www.amex.com), at Amex's principal 
office, and from 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, as 
amended, 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 is proposing to extend the suspension of transaction 
charges for specialist orders in the Nasdaq-100 Index Tracking 
Stock[supreg] (QQQQ) from August 1, 2005, through August 31, 2005. The 
current suspension of specialist transaction charges in QQQQ will 
otherwise terminate on July 31, 2005.\6\
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    \6\ See Amex File No. 2005-077 filed with the Commission on July 
15, 2005.
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    Specialist orders in QQQQ executed on the Exchange currently are 
charged $0.0037 ($0.37 per 100 shares), capped at $300 per trade. 
Effective December 1, 2004, the Nasdaq-100 Index Tracking Stock[supreg] 
(formerly ``QQQ'') transferred its listing from Amex to the Nasdaq 
Stock Market, Inc. It now trades on Nasdaq under the symbol QQQQ. After 
the transfer, Amex began trading QQQQ on an unlisted trading privileges 
basis.
    As detailed in a recently filed proposed rule change (File No. SR-
Amex-2005-077), the Exchange submits that a suspension of transaction 
fees for specialist orders in connection with QQQQ is consistent with 
section 6(b)(4) of the Act.\7\ Specifically, the Exchange believes that 
extending the suspension of transaction charges for QQQQ specialist 
orders is an equitable allocation of reasonable fees among Exchange 
members, issuers, and other persons using its facilities. The fact that 
specialists have greater obligations than other members and are also 
subject to other Exchange fees, in addition to transaction fees, 
supports this proposal to temporarily extend the fee suspension.
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    \7\ Section 6(b)(4) of the Act states that the rules of a 
national securities exchange provide for ``the equitable allocation 
of reasonable dues, fees, and other charges among its members and 
issuers and other persons using its facilities.''
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    The Exchange notes that specialists are also subject to a variety 
of Exchange fees other than transaction charges, such as a floor clerk 
fee, a floor facility fee, a post fee, and a registration fee.\8\ In 
addition, specialists and other floor members of the Exchange are 
subject to technology and membership fees.\9\ Certain market 
participants--such as customers, non-member broker-dealers, market-
makers, and member broker-dealers--are not subject to the majority of 
these fees. In addition, specialist units, unlike registered traders 
and other floor members, must be sufficiently staffed and provide 
adequate technology resources to handle the volume of orders 
(especially in QQQQ) that are sent to the specialist

[[Page 49339]]

post at the Exchange. These operational costs that are incurred by a 
specialist further support the Exchange proposal to extend the 
suspension of QQQQ transaction fees on specialist orders.
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    \8\ The floor clerk, floor facility, post, and registration fees 
on an annual basis are $900, $2,400, $1,000, and $800, respectively.
    \9\ A technology fee of $3,000 per year is assessed on all 
specialists and other floor participants at the Exchange. Annual 
membership dues of $1,500 must be paid by all members, while annual 
membership fees are payable depending on the type of membership and 
circumstances. Non-members are not subject to these fees.
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    Specialists have certain obligations under the Exchange rules, as 
well as the Act, that do not exist for other market participants. For 
example, a specialist is required to maintain a fair and orderly market 
in his or her assigned securities pursuant to Amex Rule 170. Other 
members of the Exchange, as well as non-member market participants, do 
not have this obligation. As a result, the Exchange believes that an 
extension of the transaction charge fee waiver for specialist orders in 
QQQQ is reasonable and equitable.
    The Exchange is amending the Amex Fee Schedules to indicate that 
transaction charges for specialist orders in connection with QQQQ 
executed on the Exchange will be further suspended from August 1, 2005, 
through August 31, 2005. The Exchange also submits that the fee 
suspension will provide greater incentive to the specialist to continue 
to provide market liquidity, rendering the Exchange an attractive venue 
for market participants to execute orders.
2. Statutory Basis
    Amex believes that the proposed rule change, as amended, is 
consistent with section 6(b) of the Act \10\ in general and furthers 
the objectives of section 6(b)(4) of the Act \11\ in particular in that 
it is intended to assure the equitable allocation of reasonable dues, 
fees, and other charges among its members and issuers and other persons 
using its facilities.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Amex believes that the proposed rule change does not 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

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    The foregoing rule change, as amended, has become effective 
pursuant to section 19(b)(3)(A)(ii) of the Act \12\ and subparagraph 
(f)(2) of Rule 19b-4 thereunder \13\ because it establishes or changes 
a due, fee, or other charge imposed by the Exchange. At any time within 
60 days of the filing of the proposed rule change, 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.\14\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \13\ 17 CFR 240.19b-4(f)(2).
    \14\ The effective date of the original proposed rule change is 
August 1, 2005 and the effective date of the amendment is August 15, 
2005. For purposes of calculating the 60-day period within which the 
Commission may summarily abrogate the proposed rule change, as 
amended, under section 19(b)(3)(C) of the Act, the Commission 
considers the period to commence on August 11, 2005, the date on 
which the Exchange submitted Amendment No. 1. See 15 U.S.C. 
78s(b)(3)(C).
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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-2005-081 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-Amex-2005-081. 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 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-2005-081 and should be submitted on or before September 13, 
2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4584 Filed 8-22-05; 8:45 am]
BILLING CODE 8010-01-P