[Federal Register: August 13, 2003 (Volume 68, Number 156)]
[Notices]
[Page 48437-48438]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13au03-141]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-48287; File No. SR-SCCP-2003-05]
Self-Regulatory Organizations; Stock Clearing Corporation of
Philadelphia; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change Relating to Specialist Volume Level Discounts
August 5, 2003.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on June 27, 2003, the Stock
Clearing Corporation of Philadelphia (``SCCP'') 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 primarily by SCCP. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
parties.
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\1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change amends SCCP's fee schedule to allow SCCP
participant firms involved in mergers, consolidations, acquisitions or
other business combinations (collectively ``business combinations'') to
combine their volumes of trades cleared through SCCP margin accounts
for purposes of the SCCP specialist volume level discount. The proposal
is scheduled to be effective retroactively as of February 1, 2003, with
a rebate to be given from that date forward for any firms affected by
this proposal.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
In its filing with the Commission, SCCP included statements
concerning the purpose of and statutory basis for the proposed rule
change. The text of these statements may be examined at the places
specified in Item IV below. SCCP has prepared summaries, set forth in
sections (A), (B), and (C) below, of the most significant aspects of
such statements.\2\
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\2\ The Commission has modified parts of these statements.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The proposed rule change amends SCCP's schedule of dues, fees, and
charges to allow participant firms engaged in business combinations to
combine their trading volumes for purposes of determining their SCCP
specialist volume level discounts. From time to time, participant firms
may enter into some form of business combination. Prior to a business
combination, each component participant firm may take advantage of the
specialist volume level discount, depending on the firm's level of
trading activity in its SCCP margin account. Currently, however, when a
participant firm is involved in a business combination, the resulting
participant firm is penalized because the specialist volume level
discount is calculated for each participant firm in such business
combination rather than for both firms on a combined basis.
After a business combination, the resulting participant firm may be
eligible for a higher specialist volume level discount as a result of
the combination of the trading activity of its component firms. This
occurs because the resulting firm may have a higher volume of
transactions than each component firm and because the discount per side
increases as the volume levels increase. To establish parity in these
situations, SCCP is proposing that, in the month during which a
business combination occurs, the specialist volume level discounts of
each participant firm involved in such business combination may be
consolidated for purposes of determining the specialist volume level
discount of the resulting participant firm.
SCCP participants eligible for the combined discounts will be
required to request the combined volume level discounts within 30 days
after the issuance of the SCCP invoice for the month in which a
business combination occurs. The proposal is scheduled to be effective
as of February 1, 2003, with a rebate to be given from February 1, 2003
forward to any firms affected by this proposed fee change.
SCCP believes that the proposed rule change is consistent with
17A(b)(3)(D) of the Act \3\ which requires that the rules of a
registered clearing agency provide for equitable allocation of
reasonable dues, fees, and other charges for services which it provides
to its participants because the fee structure proposed herein applies
the volume discount applicable to combined firms in an equitable
manner.
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\3\ 15 U.S.C. 78q-1(b)(3)(D).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
SCCP 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
Because the foregoing rule change establishes or changes a due,
fee, or other charge imposed by SCCP, it has become effective pursuant
to Section 19(b)(3)(A)(ii) of the Act \4\ and Rule 19b-4(f)(2)
thereunder.\5\ At any time within sixty 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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\4\ 15 U.S.C. 78s(b)(3)(A)(ii).
\5\ 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 proposed rule
change 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-SCCP-2003-05. This file number should be included on the
subject line if e-mail is used. To help us process and review 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
[[Page 48438]]
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 SCCP.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-20546 Filed 8-12-03; 8:45 am]
BILLING CODE 8010-01-P