[Federal Register: May 5, 2003 (Volume 68, Number 86)]
[Notices]
[Page 23789-23790]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05my03-111]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-47750; File No. SR-Phlx-2003-16]
Self-Regulatory Organizations; Notice of Filing of Amendment No.
2 to Proposed Rule Change by the Philadelphia Stock Exchange, Inc.
Relating to Charges to Members for Orders Entered Through the
Intermarket Options Linkage
April 28, 2003.
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 March 18, 2003, the Philadelphia Stock Exchange, Inc. (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change,\3\ as described in Items I,
II, and III below, which Items have been prepared by the Phlx. On March
21, 2003, Phlx filed Amendment No. 1 to the proposed rule change.\4\
The proposed rule change, as amended by Amendment No. 1, was originally
published for comment in the Federal Register on April 2, 2003.\5\ On
April 23, 2003, Phlx filed Amendment No. 2 to the proposed rule
change.\6\ On April 23, 2003, Phlx filed a supplementary letter to
Amendment No. 2.\7\ The Commission is publishing this notice to solicit
comments on Amendment No. 2 to 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.
\3\ See letter from Richard S. Rudolph, Director and Counsel,
Phlx to Nancy Sanow, Assistant Director, Division of Market
Regulation (``Division''), Commission, dated March 17, 2003
(``Original Filing'').
\4\ See letter from Richard S. Rudolph, Director and Counsel,
Phlx to Jennifer Lewis, Attorney, Division, Commission, dated March
20, 2003 (``Amendment No. 1'').
\5\ See Securities Exchange Act Release No. 47561 (March 21,
2003), 68 FR 15250.
\6\ See letter from Richard S. Rudolph, Director and Counsel,
Phlx to Jennifer Lewis, Attorney, Division, Commission, dated April
22, 2003 (``Amendment No. 2'').
\7\ See letter from Richard S. Rudolph, Director and Counsel,
Phlx to Jennifer Lewis, Attorney, Division, Commission, dated April
22, 2003.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
In the Original Filing, Phlx proposed to amend its fee schedule to
set forth charges applicable to Principal Orders sent to the Exchange
via the Intermarket Options Linkage (``Linkage''). In the proposed fee
schedule attached to the Original Filing, floor brokerage assessments
(which do not apply to Linkage orders) were not accurately
described.\8\ In addition, in a separate filing, Phlx amended its fee
schedule on April 11, 2003 to modify the fees applicable to broker/
dealers for non-AUTO-X trades.\9\ Previously, the fee was $.35 per
contract. Now, the fee ranges from $.35 per contract to $.20 per
contract, depending on the number of contracts.\10\ In the Original
Filing, Phlx
[[Page 23790]]
stated that its proposed linkage fees were consistent with other fees
charged by the Exchange for non-Linkage Orders. In Amendment No. 2,
Phlx clarifies that due to the recent changes to the options
transaction charges applicable to broker-dealers discussed above, the
proposed fee applicable to Principal Orders sent to the Exchange via
the Linkage is no longer consistent with other fees charged by the
Exchange for non-Linkage Orders.
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\8\ In the Original Filing, the Option Floor Brokerage
Assessment was set forth as 5% of net floor brokerage income. The
current Option Floor Brokerage Assessment is 5% of net floor
brokerage income for brokers with monthly net brokerage income of $0
to $300,000; 6.5% of net floor brokerage income for brokers with
monthly net brokerage income of $301,000 to $500,000; and 7.5% of
net floor brokerage income for brokers with monthly net brokerage
income of $500,001 and over.
\9\ See Securities Exchange Act Release No. 47715 (April 23,
2003), 68 FR 22446 (April 28, 2003).
\10\ The fee is $.35 per contract for up to 2,000 contracts,
$.25 per contract for between 2,001 and 3,000 contracts; and $.20
per contract above 3,001 contracts (with the first 3,000 contracts
charged $.25 per contract).
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filings with the Commission, 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.\11\ The
text of these statements may be examined at the places specified in
Item IV below. Phlx has prepared summaries, set forth in sections A, B,
and C below, of the most significant aspects of such statements.\12\
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\11\ See Original Filing, note 5 supra.
\12\ Id.
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A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to modify the fee schedule to reflect changes
made to Phlx's fee schedule subsequent to the Original Filing and to
make a correction to the fee schedule.
2. Statutory Basis
Phlx believes that the proposed rule change, as amended, is
consistent with section 6(b) of the Act,\13\ in general, and furthers
the objectives of section 6(b)(4),\14\ in that it is an equitable
allocation of reasonable dues, fees, and other charges among Exchange
members who avail themselves of the linkage.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Phlx does not believe that the proposed rule change, as amended,
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
The Exchange has neither solicited nor received written comments on
the proposed rule change, as amended.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the 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 (ii) as to
which Phlx consents, the Commission will:
(A) by order approve the proposed rule change, as amended, or
(B) institute proceedings to determine whether the proposed rule
change, as amended, should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning Amendment No. 2, including whether Amendment No. 2
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 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 Phlx. All
submissions should refer to File Number SR-Phlx-2003-16 and should be
submitted by May 27, 2003.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-2(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-10958 Filed 5-2-03; 8:45 am]
BILLING CODE 8010-01-P