[Federal Register: July 30, 2004 (Volume 69, Number 146)]
[Notices]
[Page 45875-45876]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30jy04-148]
[[Page 45875]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-50082; File No. SR-PCX-2004-68]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change and Amendment No.
1 Thereto by the Pacific Exchange, Inc. Relating to the Extension of a
Linkage Fee Pilot Program
July 26, 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 July 15, 2004, the Pacific Exchange, Inc. (``PCX'' 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 Exchange. On July 21, 2004, the PCX filed
Amendment No. 1 to the proposed rule change.\3\ The Commission is
publishing this notice to solicit comments on the proposed rule change,
as amended, from interested persons and is approving the proposed rule
change, as amended, on an accelerated basis.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ CFR 240.19b-4.
\3\ See letter from Steven B. Matlin, Senior Counsel, Regulatory
Policy, PCX to Nancy Sanow, Assistant Director, Commission, dated
July 20, 2004 (``Amendment No. 1''). In Amendment No. 1, the
Exchange proposes to make technical corrections to the Schedule of
Fees and Charges for Exchange Services, originally submitted as
Exhibit A to the proposed rule change.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to amend its Schedule of Fees and Charges
For Exchange Services to extend until July 31, 2005 the current pilot
program regarding transaction fees charged for trades executed through
the intermarket options linkage (``Linkage''). The text of the proposed
fee schedule is available at the principal office of Exchange and at
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, 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 III below. The self-regulatory organization 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 this proposed rule change is to extend for one year
the pilot program establishing PCX fees for Principal (``P'') Orders
and Principal Acting as Agent (``P/A'') Orders executed through
Linkage. The fees currently are effective for a pilot program set to
expire on July 31, 2004, and this filing would extend the fees through
July 31, 2005. The two fees the PCX charges for P and P/A Orders are:
the $.21 per contract side basic execution fees for trading on the PCX
and a $.05 comparison fee per contract side. These are the same fees
that all PCX Option Trading Permit Holders pay for non-customer
transactions executed on the Exchange. The Exchange does not charge for
the execution of Satisfaction Orders sent through Linkage and is not
proposing to charge for such orders.
2. Statutory Basis
The Exchange believes that the proposal is consistent with section
6(b) of the Act,\4\ in general, and section 6(b)(4),\5\ in particular,
in that it provides for the equitable allocation of dues, fees and
other charges among its members and other persons using its facilities
for the purpose of executing P and P/A Orders that are routed to the
Exchange from other market centers.
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\4\ 15 U.S.C. 78f(b).
\5\ 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 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
The Exchange has neither solicited nor received written comments on
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 proposed rule
change is consistent with 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 rule-comments@sec.gov. Please include
File Number SR-PCX-2004-68 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW.,
Washington, DC 20549-0609.
All submissions should refer to File Number SR-PCX-2004-68. 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 Section, 450 Fifth
Street, NW., Washington, DC 20549. Copies of such filing also will be
available for inspection and copying at the principal office of the
PCX. 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-PCX-
2004-68 and should be submitted on or before August 20, 2004.
IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change
After careful consideration, the Commission finds that the proposed
rule change is consistent with the requirements of the Act and the
rules
[[Page 45876]]
and regulations thereunder, applicable to a national securities
exchange,\6\ and, in particular, with the requirements of section 6(b)
of the Act \7\ and the rules and regulations thereunder. The Commission
finds that the proposed rule change, as amended, is consistent with
section 6(b)(4) of the Act,\8\ which requires that the rules of the
Exchange provide for the equitable allocation or reasonable dues, fees
and other charges among its members and other persons using its
facilities. The Commission believes that the extension of the Linkage
fee pilot until July 31, 2005 will give the Exchange and the Commission
further opportunity to evaluate whether such fees are appropriate.
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\6\ In approving this rule, the Commission notes that it has
considered its impact on efficiency, competition and capital
formation. 15 U.S.C. 78c(f).
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
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The Commission finds good cause, pursuant to section 19(b)(2) of
the Act,\9\ for approving the proposed rule change, as amended, prior
to the thirtieth day after the date of publication of the notice of the
filing thereof in the Federal Register. The Commission believes that
granting accelerated approval will preserve the Exchange's existing
pilot program for Linkage fees without interruption as the PCX and the
Commission further consider the appropriateness of Linkage fees.
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\9\ 15 U.S.C. 78s(b)(2).
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V. Conclusion
It is therefore ordered, pursuant to section 19(b)(2) of the Act
\10\ that the proposed rule change, as amended, (SR-PCX-2004-68) is
hereby approved on an accelerated basis for a pilot period to expire on
July 31, 2005.
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\10\ Id.
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).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-17386 Filed 7-29-04; 8:45 am]
BILLING CODE 8010-01-P