[Federal Register: February 5, 2004 (Volume 69, Number 24)]
[Notices]
[Page 5619-5620]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05fe04-150]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-49145; File No. SR-Amex-2004-03]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change by the American
Stock Exchange LLC Relating to the Extension of a Linkage Fee Pilot
Program
January 29, 2004.
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 January 14, 2004, the American Stock Exchange LLC (``Exchange'' or
``Amex'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II 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 and is approving the
proposed rule change on an accelerated basis.
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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 extend for six (6) months, until July 31,
2004, the current pilot program regarding transaction fees for trades
executed through the intermarket options linkage (the ``Linkage'') on
the Exchange.
The proposed fee schedule is available at the Exchange 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 Amex 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 III 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
The Amex is proposing to extend for six (6) months, until July 31,
2004, the current pilot program establishing Exchange fees for
Principal Orders (``P Orders'') and Principal Acting As Agent Orders
(``P/A Orders'') executed through the Linkage. The fees in connection
with the pilot program are scheduled to expire on January 31, 2004.\3\
The fees charged by the Amex under the pilot program consist of a $0.26
per contract transaction fee, a $0.05 comparison fee, and a $0.05 floor
brokerage fee. In addition to the previously approved fees, Amex is
proposing to subject incoming P and P/A orders for certain licensed
index products to a licensing fee \4\ as part of the pilot.\5\ These
are the same fees charged to specialists and Registered Options Traders
(``ROTs'') for transactions executed on the Exchange. Consistent with
the Linkage Plan, the Amex does not charge for the execution of
Satisfaction Orders sent through the Linkage.\6\
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\3\ See Securities Exchange Act Release No. 47822 (May 9, 2003),
68 FR 27115 (May 19, 2003) (SR-Amex-2003-14).
\4\ For example, specialists and registered options traders on
the Exchange are subject to a $.10 per contract fee for transactions
in QQQ options.
\5\ Telephone conversation between Jeffrey Burns, Associate
General Counsel, Amex, and Jennifer Colihan, Special Counsel,
Division of Market Regulation, Commission on January 23, 2004
clarifying that the previous approval of fees for Linkage Orders
(see note 3, supra) did not include the Options Licensing Fee.
\6\ See Securities Exchange Act Release No. 47298 (January 31,
2003), 68 FR 6524 (February 7, 2003) (File No. 4-429).
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As was the case in its filing for the original pilot program, the
Exchange believes that the existing fee amount for equity options that
currently is charged to Exchange specialists and ROTs should apply to
executions resulting from Linkage Orders. Market makers from other
option exchanges accessing the liquidity of the Exchange by sending P
or P/A Orders accordingly pay the same fees applicable to Amex
specialists and ROTs for such executions.
Based on the limited experience operating the Linkage, the Exchange
believes that an extension of the pilot program for six (6) months
until July 31, 2004 is appropriate. During this time, the Exchange
intends to study the effect of Linkage fees and prepare to file a
permanent Linkage fee proposal.
2. Statutory Basis
The Amex believes the proposed rule change is consistent with
Section 6(b)(4) of the Act \7\ regarding the equitable allocation of
reasonable dues, fees and other charges among exchange members and
other persons using exchange facilities.
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\7\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that the proposed rule change will impose no
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 with respect to the
proposed rule change.
III. 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-Amex-2004-03. This file number should be included on the
subject line if e-mail is used. To help the Commission process and
review your comments more efficiently, comments should be sent in
hardcopy or by e-mail but not by both methods. Copies of the
submission, all subsequent
[[Page 5620]]
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 Exchange. All
submissions should be submitted by February 26, 2004.
IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change
After careful consideration, the Commission finds that the proposed
rule change is consistent with the requirements of the Act and the
rules and regulations thereunder, applicable to a national securities
exchange,\8\ and, in particular, with the requirements of section 6(b)
of the Act \9\ and the rules and regulations thereunder. The Commission
finds that the proposed rule change is consistent with section 6(b)(4)
of the Act,\10\ which requires that the rules of the Exchange provide
for the equitable allocation of reasonable dues, fees, and other
charges among its members and other persons using its facilities. The
Commission believes that the extension of the Exchange's Linkage fee
pilot program until July 31, 2004 will give the Exchange and the
Commission further opportunity to evaluate whether such fees are
appropriate.
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\8\ In approving this rule, the Commission notes that it has
considered its impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4).
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The Commission finds good cause, pursuant to section 19(b)(2) of
the Act,\11\ for approving the proposed rule change prior to the
thirtieth day after the date of publication of the notice of the filing
thereof in the Federal Register. The Commission believes that granting
accelerated approval will preserve the Exchange's existing pilot
program for Linkage fees without interruption as the Amex and the
Commission further consider the appropriateness of Linkage fees.
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\11\ 15 U.S.C. 78s(b)(2).
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V. Conclusion
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\12\ that the proposed rule change (SR-Amex-2004-03) is hereby
approved on an accelerated basis for a pilot period to expire on July
31, 2004.
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\12\ Id.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 04-2358 Filed 2-4-04; 8:45 am]
BILLING CODE 8010-01-P