[Federal Register: August 12, 1999 (Volume 64, Number 155)] [Notices] [Page 44073-44074] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr12au99-118] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-41711; File No. SR-PHLX-99-24] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Philadelphia Stock Exchange, Inc. Relating to the Establishment of a Fee to Members for Receiving On-line Options Information August 5, 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 June 29, 1999, the Philadelphia Stock Exchange, Inc. (``Phlx'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission'' or ``SEC'') 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Phlx proposes to adopt a real-time, trade information fee of $.0025 per trade for members receiving option trade information on-line (i.e., electronically) from the Exchange, beginning on July 1, 1999. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with Commission, the Phlx 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 Phlx has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. [[Page 44074]] A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Recently, the Exchange implemented an automation enhancement to the options floor that provides option trade information on-line (i.e. electronically) on a real-time basis. Members can now choose to connect and log on to an interface to the options risk management system to receive options (equity and index options) transaction information real-time. Specifically, once transaction information is in the AUTOM System, \3\ it becomes available to members such as clearing firms, who may connect to the feature; clearing firms may determine to offer such information to floor traders electronically, but the Exchange is not proposing to do so at this time. The transaction information covered by this feature includes the type of information generally captured in Exchange systems as a trade.\4\ Currently, such information is made available to members in hard-copy (paper ticket) form, which can be confirmed against floor trader positions. The Exchange has created this new electronic link to facilitate electronic position monitoring for options. The feature is voluntary and does not replace the current hard-copy printing of transaction information. Members choosing to log on to the feature will be charged $.0025 per trade.\5\ --------------------------------------------------------------------------- \3\ AUTOM is the Phlx Automatic Options Market System. See Phlx Rule 1080. \4\ This information includes the symbol, volume, price, time and clearing information of the traded security. Telephone conversation between Nandita Yagnik, Council, Phlx, and Heather Traeger, Attorney, Division of Market Regulation (``Division''), SEC, on July 16, 1999. \5\ The Exchange chose to charge a user fee rather than a flat fee to encourage more firms, including small firms, to use the feature because it is an important risk management tool. Telephone conversation between Nandita Yagnik, Council, Phlx, and Heather Traeger, Attorney, Division, SEC, on July 19, 1999. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes the proposed rule change is consistent with Section 6(b)(4) of the Act \6\ in that it provides for the equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- 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. 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. 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 imposed by the Exchange, has become effective pursuant to Section 19(b)(3)(A) of the Act \7\ and subparagraph (f)(2) of Rule 19b-4 thereunder.\8\ The Exchange implemented the fee on July 1, 1999. 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. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78s(b)(3)(A). \8\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- 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 also will be available for inspection and copying at the principal office of the Phlx. All submissions should refer to File No. SR-PHLX-99-24 and should be submitted by September 2, 1999. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\9\ --------------------------------------------------------------------------- \9\ 17 CFR 240.30-2(a)(12). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 99-20850 Filed 8-11-99; 8:45 am] BILLING CODE 8010-01-M