[Federal Register: May 13, 2003 (Volume 68, Number 92)]
[Notices]
[Page 25670-25671]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13my03-135]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-47799; File No. SR-Phlx-2003-28]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Philadelphia Stock Exchange, Inc. To Retroactively Apply
Its Broker-Dealer Transaction Fee for Equity Option Transactions for
the Period From April 1, 2003 to April 10, 2003
May 6, 2003.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(Act or Exchange Act),\1\ and rule 19b-4 thereunder,\2\ notice is
hereby given that on April 28, 2003, 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 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its schedule of dues, fees and
charges to apply the following reduced broker-dealer transaction fee
for block equity option transactions retroactively to equity options
transactions settling from April 1, 2003, to April 10, 2003: Broker/
Dealer \3\ (non-AUTO-X)
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\3\ This charge applies to members for transactions, received
from other than the floor of the Exchange, for any account (i) in
which the holder of beneficial interest is a member or non-member
broker-dealer or (ii) in which the holder of beneficial interest is
a person associated with or employed by a member or non-member
broker-dealer. This includes transactions for the account of an ROT
entered from off-floor.
Up to 2,000 contracts..................... $.35 per contract
Between 2,001 and 3,000 contracts......... $.25 per contract (for all
contracts)
Residual above 3,000 contracts............ $.20 per contract above
3,000 contracts (with the
first 3,000 contracts
charged $.25 per contract)
This fee is applied per transaction (not per month).\4\ This
revised fee became effective for trades settling on or after April 11,
2003. The Exchange now proposes to implement this fee on transactions
that have settled from April 1, 2003, to April 10, 2003.\5\ All other
equity option transaction charges will remain unchanged. The text of
the proposed rule change is available upon request from the Office of
the Secretary, the Commission, and the Exchange.
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\4\ Member organizations may need to file a form with the
Exchange to identify eligible block trades.
\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 28, 2001)(SR-Phlx-2002-32).
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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
On April 11, 2003, the Exchange filed a proposed rule change that
amended its schedule of dues, fees and charges to adopt decreases in
its broker-dealer transaction fee for equity option transactions.\6\
This fee change became effective for transactions settling on or after
April 11, 2003. This current proposal seeks to apply theses decreases
to the broker-dealer transaction fee to transactions that settled from
April 1, 2003, to April 10, 2003.\7\ The purpose of the proposed rule
change is to provide equivalent fee decreases to those broker-dealers
whose transactions would have qualified for discounted broker-dealer
transaction fees during the above-referenced ten-day period.
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\6\ See Securities Exchange Act Release No. 47715 (April 22,
2003), 68 FR 22446 (April 28, 2003)(SR-Phlx-2003-26).
\7\ The Phlx stated that from April 1, 2003, to April 10, 2003,
there were approximately seven transactions that would have
qualified for the lower ``block'' broker-dealer transaction fee.
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This proposal seeks to apply the current transaction levels set
forth above per to applicable broker-dealer transactions for trades
settling from April 1, 2003, to April 10, 2003. For example, under the
proposal (i) a transaction of 1,700 option contracts will be charged
$0.35 per contract, (ii) a transaction of 2,500 contracts will be
charged $0.25 per contract for all contracts, and (iii) a transaction
of 3,500 contracts will be charged $0.25 for each of the first 3,000
contracts and $0.20 for each of the remaining 500 contracts.\8\
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\8\ Of course, the contra-side to a transaction may also be
subject to transaction and other charges.
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2. Statutory Basis
The Exchange believes that its proposal to amend its schedule of
dues, fees and charges is consistent with section 6(b) of the Act \9\
in general, and furthers the objectives of section 6(b)(4) of the Act
\10\ in particular, in that it is an equitable allocation of reasonable
dues, fees, and other charges among Exchange members. The Exchange
believes the proposal is reasonable and equitable because it applies
the same fee decreases for broker-dealers executing equity options
transactions on the Exchange settling from April 1, 2003, to April 10,
2003, as those applicable to broker-dealers whose transactions settle
on or after April 11, 2003.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Phlx 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 solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding, or
[[Page 25671]]
(ii) as to which the Exchange consents, the Commission will:
A. By order approve such proposed rule change; or
B. Institute proceedings to determine whether the proposed rule
change should be disapproved.
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.
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 at 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 No. SR-Phlx-2003-28 and
should be submitted by June 3, 2003.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.03-(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-11880 Filed 5-12-03; 8:45 am]
BILLING CODE 8010-01-P