[Federal Register: January 13, 2004 (Volume 69, Number 8)]
[Notices]
[Page 2018-2020]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13ja04-110]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-49025; File No. SR-Amex-2003-106]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change and Amendment No.
1 Thereto by the American Stock Exchange LLC Relating to the
Retroactive Application of a Monthly Options Transaction Fee Cap for
Specialists and Registered Options Traders
January 6, 2004.
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 December
[[Page 2019]]
1, 2003, 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 and II below, which Items
have been prepared by the Amex. On January 2, 2004, the Exchange
amended the proposal.\3\ The Commission is publishing this notice to
solicit comments on the proposed rule change, as amended, from
interested persons, and is granting accelerated approval to the
proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See letter from Jeffrey P. Burns, Associate General Counsel,
Amex, to Joseph P. Morra, Special Counsel, Division of Market
Regulation, Commission, dated December 31, 2003 (``Amendment No. 1
''). In Amendment No. 1, Amex explained that it requested
accelerated approval of the filing so that the rebated monies could
be allocated in 2003 for the purpose of closing the books for the
year.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to retroactively apply a fee cap of $72,000
per month in any single options class for specialists and registered
options traders (``ROTs'') subject to options transaction fees from
July 1, 2003 to November 30, 2003. The text of the proposed rule change
is available at the Amex and at the Commission.
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 Amex 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 III below. The 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Amex proposed, in a companion filing (SR-Amex-2003-104),\4\ to
adopt a fee cap of $72,000 per month in any single option class,
exclusive of license fees, for specialists and ROTs subject to
transaction fees.\5\ With the instant proposed rule change, Amex
proposes that this fee cap be effective as of July 1, 2003 so that the
Amex will retroactively apply the fee cap from July 1, 2003 to November
30, 2003. Accordingly, the Exchange will rebate to those specialists
and ROTs transaction fees (exclusive of the options licensing fee) that
have been paid in excess of the $72,000 fee cap in any single option
class in any one month from July 1, 2003 through November 30, 2003.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 49019 (January 5,
2004) (File No. SR-Amex-2003-104). This proposal was filed pursuant
to section 19(b)(3)(A) of the Act and was effective upon filing.
\5\ For this purpose, transaction fees applicable to specialists
and ROTs include the options transaction fee, the options comparison
fee, and the options floor brokerage fee.
---------------------------------------------------------------------------
The Exchange believes that specialists and ROTs who bring in
substantial order flow to the Exchange should be rewarded through the
proposed fee reduction. As proposed, specialists and ROTs in any single
option class will be required to trade 200,000 contracts for equity
options and 232,258 contracts in index options to reach the fee cap
(based on the current rate of $0.36 per contract side). However, as
indicated in SR-Amex-2003-104,\6\ the number of contracts required to
reach the fee cap in the top 300 equity options may increase as a
result of the proposed market share fee program. Although the Exchange
submits that only a small number of firms will likely reach these
limits, the proposal is intended to provide incentives to firms to
continue to attract order flow.
---------------------------------------------------------------------------
\6\ See supra note 4.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed fee change is consistent
with Section 6(b)(4) of the Act \7\ regarding the equitable allocation
of reasonable dues, fees and other charges among exchange members and
other persons using exchange facilities.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Amex believes the proposed rule change will impose no 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 solicited or received with respect to the
proposed rule change.
III. 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. Comments
may also be submitted electronically at the following e-mail address:
rule-comments@sec.gov. All comment letters should refer to File No. SR-
Amex-2003-106. 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, comments should be sent in hardcopy or by e-
mail but not by both methods. 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 Amex. All
submissions should refer to File No. SR-Amex-2003-106 and should be
submitted by February 3, 2004.
IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change
The Amex has asked the Commission to approve the proposed rule
change, as amended, on an accelerated basis, so that the fee reduction
can be allocated in 2003 and the Amex and its member firms may close
its books for the year 2003.
The Commission finds that the proposed rule change, as amended, is
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange,
and in particular, the requirements of Section 6(b)(4) of the Act.\8\
Specifically, the Commission believes that the proposal is consistent
with Section 6(b)(5) of the Act,\9\ which requires, among other things,
that the rules of a national securities exchange be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest.\10\ The
[[Page 2020]]
Commission believes that the proposal may increase order flow to the
Exchange, which should enhance liquidity on the Amex.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b)(4).
\9\ 15 U.S.C. 78f(b)(5).
\10\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
The Commission finds good cause for approving the proposed rule
change, as amended, prior to the thirtieth day after the date of
publication of the notice of filing thereof in the Federal Register.
Specifically, the Commission notes that accelerated approval will allow
the Amex and its member firms to close its books for the year 2003
without unnecessary delay. Accordingly, the Commission believes that
there is good cause, consistent with Sections 6(b)(4)\11\ and 19(b)(2)
of the Act,\12\ to approve the proposal, as amended, on an accelerated
basis.
---------------------------------------------------------------------------
\11\ See supra note 8.
\12\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------
V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\13\ that the proposed rule change (SR-Amex-2003-106), as amended,
is hereby approved on an accelerated basis.
---------------------------------------------------------------------------
\13\ Id.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)12).
---------------------------------------------------------------------------
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 04-613 Filed 1-12-04; 8:45 am]
BILLING CODE 8010-01-U