[Federal Register: November 15, 2002 (Volume 67, Number 221)]
[Notices]
[Page 69283-69284]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15no02-106]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-46784; File No. SR-PCX-2002-68]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. To
Amend Its Schedule of Fees and Charges To Increase the User Transaction
Credit for Certain Transactions in American Depositary Receipts
November 7, 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 October 8, 2002, the Pacific Exchange, Inc. (``PCX'' 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. On November 5, 2002, the Exchange filed Amendment No. 1 to
the proposed rule change.\3\ The Commission is publishing this notice
to solicit comments on the proposed rule change, as amended, 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 Peter D. Bloom, Director, Policy
Development, PCX to Rebekah Liu, Special Counsel, Division of Market
Regulation, Commission, dated November 5, 2002. In Amendment No. 1,
the Exchange corrected the fee schedule attached as Exhibit A to the
rule filing to accurately reflect that existing underlined text
would be double-underscored. Amendment No. 1 contained no
substantive changes to the fee schedule.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange through its wholly owned subsidiary PCX Equities, Inc.
(``PCXE''), proposes to amend its fee schedule to increase the user
transaction credit for ETP Holders and Sponsored Participants who
provide liquidity in exchange-listed American Depositary Receipts
(``ADRs'') that are traded on the Archipelago Exchange, the equities
trading facility of PCXE. The text of the proposed rule change 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 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
The purpose of the proposed rule change is to amend the Exchange's
fee schedule by increasing the level of the transaction credit paid to
ETP Holders \4\ and Sponsored Participants \5\ (collectively ``Users'')
who provide liquidity in exchange-listed ADRs that are traded on the
Archipelago Exchange (``ArcaEx'').
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\4\ See PCXE Rule 1.1(n).
\5\ A ``Sponsored Participant'' means ``a person which has
entered into a sponsorship arrangement with a Sponsoring ETP Holder
pursuant to [PCXE] Rule 7.29.'' See PCXE Rule 1.1(tt).
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Currently, Users who provide liquidity in ADRs by entering into the
ArcaEx Book \6\ resting limit orders that are subsequently executed
against incoming marketable orders, earn a credit of $0.001 per share.
The Exchange proposes to increase the level of the transaction credit
for ADRs from $0.001 to $0.002 per share. The increased credit of
$0.002 is the same amount that is currently applied to orders that
provide liquidity in Exchange-Traded Funds. This credit is intended to
create additional incentives to Users to provide liquidity in ADRs that
are traded on the ArcaEx facility.
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\6\ ArcaEx maintains an electronic file of orders, called the
ArcaEx Book, through which orders are displayed and matched. The
ArcaEx Book is divided into four components, called processes--the
Directed Order Process, the Display Order Process, the Working Order
Process, and the Tracking Order Process. See PCXE Rules 7.36 and
7.37 for a detailed description of these order execution processes.
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2. Basis
The Exchange believes that the proposal is consistent with Section
6(b) of the Act,\7\ in general, and Section 6(b)(4)\8\ of the Act in
particular, in that it provides for the equitable allocation of
reasonable dues, fees and other charges among its members.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
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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 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
Written comments on the proposed rule change were neither solicited
nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change establishes or changes a due, fee, or
other charge and, therefore, has become effective pursuant to Section
19(b)(3)(A) of the Act \9\ and subparagraph (f)(2) of Rule 19b-4
thereunder.\10\ At any time within 60 days of 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.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, 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
[[Page 69284]]
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
Exchange. All submissions should refer to File No. SR-PCX-2002-68 and
should be submitted by December 6, 2002.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-29042 Filed 11-14-02; 8:45 am]
BILLING CODE 8010-01-P