[Federal Register: December 27, 2002 (Volume 67, Number 249)]
[Notices]
[Page 79220-79221]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27de02-171]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-47065; File No. SR-PCX-2002-72]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc.
Relating to Changes in Marketing Fees
December 20, 2002.
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 November 25, 2002, the Pacific Exchange, Inc. (``PCX'') 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 PCX. 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 PCX is proposing to change its marketing fee for certain
options and to adopt new marketing fees for recently listed options.
The text of the proposed change is available at the PCX and at the
Commission.
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 PCX 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 PCX 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
Purpose
The PCX recently adopted a payment-for-order-flow program under
which it charges a marketing fee ranging from $0 to $1.00 per contract
on a per-issue basis.\3\ The PCX segregates the funds from this fee by
trading post and makes
[[Page 79221]]
the funds available to LMMs for their use in attracting orders in the
options traded at the posts. The PCX charges the marketing fees as set
forth in the Schedule of Rates.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 44830 (September 21,
2001), 66 FR 49728 (September 28, 2001) (SR-PCX-2001-37).
---------------------------------------------------------------------------
The PCX is proposing to change the marketing fee for certain
options as set forth in the Schedule of Rates beginning at the
commencement of the December trade month and continuing until further
notice. The PCX proposes to change only the amounts of the fees that it
charges for transactions in the options that are included in the
proposed Schedule of Rates. Any fees currently being charged for
transactions in options that are not listed in this change to the
Schedule of Rates would not be affected by the proposed rule change.
The PCX believes that its proposed rule change is reasonable and
equitable because it is designed to enable the PCX to compete with
other markets in attracting options business. Only the amount of the
fee is being changed.
Basis
The PCX believes that the proposal is consistent with Section 6(b)
of the Act,\4\ particularly Section 6(b)(4) of the Act,\5\ in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among its members.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The PCX 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 PCX 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 has become immediately effective pursuant
to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-4(f) thereunder \7\
because it changes the PCX fee schedule. At any time within 60 days
after the filing of such 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.
---------------------------------------------------------------------------
\6\ 615 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposal 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 PCX. All
submissions should refer to File No. SR-PCX-2002-72 and should be
submitted by January 17, 2003.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------
\8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-32792 Filed 12-26-02; 8:45 am]
BILLING CODE 8010-01-P