[Federal Register: February 3, 1999 (Volume 64, Number 22)] [Notices] [Page 5336-5337] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr03fe99-99] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-40959; File No. SR-PCX-98-65] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. Relating to Rescission of Fee Assessment for New Facilities January 22, 1999. 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 January 15, 1999, the Pacific Exchange, Inc. (``PCX'' 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 PCX.\3\ The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ The filing was submitted January 4, 1999, however, the PCX amended the filing after it was submitted. Therefore the effective date of the filing is January 15, 1999. See letter from Robert P. Pacileo, Staff Attorney, PCX, to Mike Walinskas, Deputy Associate Director, SEC, dated January 14, 1999. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change PCX is proposing to rescind the special assessment that was approved in January 1998. The assessment, which applied to each of the 552 PCX memberships, was intended to provide an equity base to fund new facilities to house the Exchange's new trading floor, technology facilities, associated office space and equipment. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, PCX included statements concerning the purpose of, and basis for, the fee 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. PCX has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. [[Page 5337]] A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Background: The Exchange received approval by the Commission to assess the 552 PCX memberships $36,000, to be paid by each membership in monthly installments of $1,000 per month.\4\ In the original proposal, the Exchange stated that ``the purpose of the assessment is to provide an equity base to finance land and facilities to house the Exchange's new trading floors, technology facilities, associated office space and equipment.'' In addition, the Exchange proposed that the amount raised would serve as an equity base to aid in the process of obtaining additional financing. --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 39945 (May 1, 1998), 63 FR 25891 (May 11, 1998). --------------------------------------------------------------------------- Proposed Fees: The Exchange proposes to rescind its $36,000 special assessment of each of its 552 memberships. The Exchange proposes this rescission for several reasons including: significant and rapid changes in the industry, the entry of new, well-capitalized competitors, the introduction of electronic trading, and other technological enhancements. The Exchange believes that it must use its technological, staff, and financial resources to aggressively respond to competitive pressures, but it has been able to alter its facility requirements. Although the Exchange still needs to expand and renovate its trading facilities, technological enhancements will allow it to do so in a less costly manner than the facilities proposed in the original filing.\5\ In conjunction with rescinding the assessment, the Exchange intends to refund all payments collected as part of the assessment from the owners of its 552 memberships. --------------------------------------------------------------------------- \5\ Id. --------------------------------------------------------------------------- 2. Statutory Basis The fee change is consistent with Section 6(b) \6\ of the Act in general and furthers the objectives of Section 6(b)(4) \7\ in particular because it provides for the equitable allocation of reasonable dues, fees, and other charges among its members. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78f(b). \7\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition PCX 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 PCX has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change, which establishes or changes a due, fee, or other charge applicable to members of the Exchange, has become effective pursuant to Section 19(b)(3)(A) of the Act,\8\ and subparagraph (e)(2) of Rule 19b-4 thereunder.\9\ 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. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78s(b)(3)(A). \9\ 17 CFR 240.19b-4(e)(2). --------------------------------------------------------------------------- IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the foregoing 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. Copies of the submission, all subsequent amendments, all written statements with respect to the rule change that are filed with the Commission, and all written communications relating to the 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 PCX. All submissions should refer to File No. SR-PCX-98-65 and should be submitted by February 24, 1999. For the Commission by the Division of Market Regulation, pursuant to delegated authority.\10\ --------------------------------------------------------------------------- \10\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 99-2535 Filed 2-2-99; 8:45 am] BILLING CODE 8010-01-M