[Federal Register: November 29, 2002 (Volume 67, Number 230)]
[Notices]
[Page 71226-71228]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29no02-158]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-46874; File No. SR-Phlx-2002-64]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Philadelphia Stock
Exchange, Inc. To Change the Exchange's Calculation of Transaction
Charges From a Value-Based System to a Share-Based System
November 21, 2002.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 71227]]
(``Act''),\1\ and rule 19b-4 thereunder,\2\ notice is hereby given that
on October 24, 2002, the Philadelphia Stock Exchange, Inc. (``Phlx'' 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 the Exchange. The
Exchange has designated this proposal as one establishing or changing a
due, fee, or other charge imposed by the Phlx under section
19(b)(3)(A)(ii) of the Act,\3\ which renders the proposal effective
upon filing with the Commission. 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\ 15 U.S.C. 78s(b)(3)(A)(ii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Phlx proposes to amend its schedule of dues, fees and charges
to change its current equity value transaction charge from a
transaction value-based method to a share-based method. Equity
transaction charges will be assessed on a sliding scale in relation to
how many shares are traded per transaction, as opposed to the total
value of the transaction. The proposed equity per share transaction
charge will continue to exclude specialist trades and PACE trades, and
will continue to be subject to a $50 maximum fee per trade side.\4\ The
Exchange intends to implement the equity per share transaction charge
for transactions settling on or after November 1, 2002.\5\
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\4\ PACE is the acronym for the Phlx's Automated Communication
and Execution System. It is the Phlx's order routing, delivery,
execution and reporting system for its equity trading floor. See
Phlx Rule 229.
\5\ This fee will continue to be eligible for the monthly credit
of up to $1,000 to be applied against certain fees, dues and charges
and other amounts owed to the Exchange by certain members. See
Securities Exchange Act Release No. 44292 (May 11, 2001), 66 FR
27715 (May 18, 2001)(SR-Phlx-2002-32).
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The text of the proposed rule change is below. Proposed new
language is in italics; proposed deletions are in brackets.
EQUITY TRANSACTION VALUE CHARGE I
[Based on total value of monthly transactions with the exception of
specialist trades and PACE trades.]
[Monthly transaction value Rate per $1,000]
[0--25mm $0.14]
[25mm--100mm 0.12]
[100mm--250mm 0.10]
[250mm--500mm 0.05]
[500mm and over 0.015]
Based on total shares per transaction with the exception of specialist
trades and PACE trades.
Rate per
Transaction fee share
First 500 shares $0.00
Next 2,000 shares 0.0075
Next 7,500 shares 0.005
Remaining shares 0.004
$50 maximum fee per trade side.
* * * * *
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 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 purpose of the proposed rule change is to change the Phlx's
calculation of transaction charges from a value-based system to a
share-based system in order to simplify the Phlx's transaction fee
schedule. The Exchange believes a share-based system is easier for a
member organization or a member to calculate current, and predict
future, costs associated with these transactions. In addition, other
exchanges use a share-based system.\6\
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\6\ See Securities Exchange Act Release Nos. 36753 (January 22,
1996), 61 FR 2851 (January 29, 1996)(SR-CHX-95-30); and 43664
(December 4, 2000), 65 FR 77952 (December 13, 2000)(SR-NYSE-2000-
50).
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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) \8\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees and other charges
among Exchange members.
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\7\ 15 U.S.C. 78f(b).
\8\ 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 inappropriate burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change has become effective pursuant to section
19(b)(3)(A)(ii) of the Act \9\ and subparagraph (f)(2) of Rule 19b-4
thereunder,\10\ because it involves a due, fee, or other charge. 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.
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
\10\ 17 CFR 240.19b-4(f)(2).
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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 proposal is
consistent with the Act. Persons making written submissions should file
six copies thereof with the Secretary, Securities and Exchange
Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. 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 will also be available for
inspection and copying at the principal office of the Exchange. All
submissions should refer to file number SR-Phlx-2002-64, and should be
submitted by December 20, 2002.
[[Page 71228]]
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. 02-30196 Filed 11-27-02; 8:45 am]
BILLING CODE 8010-01-P