[Federal Register Volume 70, Number 162 (Tuesday, August 23, 2005)]
[Notices]
[Page 49351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4590]



[[Page 49351]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52253; File No. SR-PCX-2005-16]


Self-Regulatory Organizations; Pacific Exchange, Inc.; Order 
Approving Proposed Rule Change and Amendment No. 1 Thereto To Amend Its 
Market Data Rebate Program To Allow Equity Trading Permit Holders To 
Receive Rebates on an Estimated Basis

August 15, 2005.
    On February 1, 2005, the Pacific Exchange, Inc. (``PCX''), through 
its wholly owned subsidiary PCX Equities, Inc. (``PCXE''), filed with 
the Securities and Exchange Commission (``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 amend its 
current market data rebate program to allow Equity Trading Permit 
Holders (``ETP Holders'') to receive market data rebates on an 
estimated basis when certain conditions are met. On July 5, 2005, PCX 
amended the proposed rule change.\3\ The proposed rule change, as 
modified by Amendment No. 1, was published for comment in the Federal 
Register on July 14, 2005.\4\ The Commission received no comments on 
the proposal. This order approves the proposed rule change, as modified 
by Amendment No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Amendment No. 1. In Amendment No. 1, PCX amended the 
purpose section of the filing to include examples of how estimated 
market data rebates would be calculated and how estimated market 
data rebates would be distributed.
    \4\ See Securities Exchange Act Release No. 51990 (July 7, 
2005), 70 FR 40770.
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    Currently, the rules governing the Archipelago Exchange 
(``ArcaEx''), the equities trading facility of PCXE, allow ETP Holders 
to receive Liquidity Provider Credit payments on a quarterly basis for 
limit orders posted by such ETP Holder in Tape B securities \5\ that 
execute against inbound marketable orders. Under the current market 
data revenue program the Liquidity Provider Credit applied to ETP 
Holders for limit orders in Tape B securities that execute against 
inbound marketable orders is 50% of the revenue from the Consolidated 
Tape Association (``CTA'') Plan generated for such trades.
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    \5\ Tape B securities include securities that are on the 
American Stock Exchange or the regional national securities 
exchanges.
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    The Commission finds that PCX's proposal to pay eligible ETP 
Holders an estimated share of Liquidity Provider Credits on a monthly 
basis, before quarterly revenues from the CTA Plan are distributed, 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange.\6\ 
In particular, the Commission believes that the proposal is consistent 
with section 6(b)(5) of the Act,\7\ which requires that the rules of 
the exchange be designed to prevent fraudulent and manipulative acts 
and practices, to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in 
facilitating transactions in securities, and to remove impediments to 
and perfect the mechanisms of a free and open market and a national 
market system. The PCX states that distributing estimated Liquidity 
Provider Credits on a monthly basis will make the pricing of executions 
on ArcaEx more competitive.
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    \6\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b)(5).
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    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-PCX-2005-16), as modified by 
Amendment No. 1 thereto, be, and it hereby is, approved.
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    \8\ 15 U.S.C. 78s(b)(2).
    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4590 Filed 8-22-05; 8:45am]
BILLING CODE 8010-01-P