[Federal Register Volume 70, Number 162 (Tuesday, August 23, 2005)]
[Notices]
[Pages 49339-49341]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4589]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52273; File No. SR-Amex-2005-078]


Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing 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 16, 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 15, 2005, the American Stock Exchange LLC (``Amex'' 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 Amex. On August 12, 
2005, the Exchange filed Amendment No. 1 to the proposed rule 
change.\3\ 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.
    \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).

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[[Page 49340]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to retroactively apply a suspension of 
specialist transaction charges for the trading of Nasdaq-100 Index 
Tracking Stock[supreg] (Symbol: QQQQ) from July 1, 2005 through July 
17, 2005. The text of the proposed rule change 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, Amex 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. Amex 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 in a companion filing (File No. SR-Amex-2005-077) 
proposed to suspend transaction charges for specialist orders in the 
Nasdaq-100 Tracking Stock (``QQQQ'') from July 18, 2005 through July 
31, 2005. In order to waive transaction fees for specialist orders in 
QQQQ for the entire month of July 2005, the Exchange has proposed to 
retroactively suspend transaction fees for specialist transactions from 
July 1, 2005 through July 17, 2005.
    Under the existing Amex Equity and Exchange Traded Funds and Trust 
Issued Receipts Fee Schedules (the ``Amex Fee Schedules''), specialist 
orders in QQQQ executed on the Exchange will be charged $0.0037 ($0.37 
per 100 shares), capped at $300 per trade from July 1, 2005 through 
July 17, 2005. The Exchange believes that the retroactive suspension of 
transaction charges for specialist transactions from July 1, 2005 
through July 17, 2005 is consistent with the companion filing to 
suspend transaction charges for specialist orders generally through 
July 31, 2005. The Exchange further believes that a retroactive 
suspension of transaction fees on specialist orders in QQQQ is 
appropriate to enhance the competitiveness of executions on Amex. The 
Exchange is amending the Amex Fee Schedules to indicate that 
transaction charges for specialist orders have been suspended from July 
1, 2005 through July 31, 2005 in QQQQ.
    As detailed in 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.\4\ 
Specifically, the Exchange believes that suspending transaction charges 
for QQQQ specialist orders is an equitable allocation of reasonable 
fees among Exchange members. 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 
retroactively apply the fee suspension.
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    \4\ Section 6(b)(4) of the Act states that the rules of a 
national securities exchange must 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 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.\5\ In 
addition, specialists and other floor members of the Exchange are 
subject to technology and membership fees.\6\ 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 in order to handle the volume of orders 
(especially in QQQQ) that are sent to the specialist 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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    \5\ The floor clerk, floor facility, post, and registration fees 
on an annual basis are $900, $2,400, $1,000, and $800, respectively.
    \6\ 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 also have certain obligations required by Exchange 
rules as well as the Act that do not exist for other market 
participants. For example, a specialist pursuant to Amex Rule 170 is 
required to maintain a fair and orderly market in his or her assigned 
securities. Other members of the Exchange as well as non-member market 
participants do not have this obligation. As a result, the Exchange 
believes that this proposal to retroactively apply the transaction 
charge fee waiver for specialist orders in QQQQ is reasonable and 
equitable. As noted above, 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 suspended from 
July 1, 2005 through July 31, 2005.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \7\ in general and furthers the objectives 
of Section 6(b)(4) of the Act \8\ 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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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer 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 Amex consents, the Commission will:
    (A) By order approve such 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, as amended, is consistent with

[[Page 49341]]

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-2005-078 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-2005-078. 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 the 
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-2005-078 and should be submitted on or before September 13, 
2005.

    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. E5-4589 Filed 8-22-05; 8:45 am]
BILLING CODE 8010-01-P