[Federal Register Volume 68, Number 120 (Monday, June 23, 2003)]
[Notices]
[Pages 37188-37189]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-15713]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-48028; File No. SR-PCX-2003-26]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc.
Relating to Changes in Marketing Fees
June 13, 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 May 30, 2003, the Pacific Exchange, Inc. (``PCX'') filed with the
Securities and Exchange Commission the proposed rule change as
described in Items I, II, and III below, which the PCX has prepared.
The Commission is publishing this notice to solicit comments on 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.
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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 had 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 37189]]
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. The PCX's marketing fee program applies
only to option issues classified by the PCX as the Top 250 issues. The
PCX defines a Top 250 issue as one of the 250 most actively traded
option issues on a national basis. For each current month, the PCX's
determination of whether an equity option ranks in the top 250 most
active issues will be based on volume statistics for the three calendar
months of trading activity beginning four months prior to the current
month.
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\3\ See Securities Act Release No. 44830 (September 21, 2001),
66 FR 49728 (September 28, 2001) (PCX-2001-37).
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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 June 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 amendment 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\ and section 6(b)(4) of the Act \5\ in particular in that
it provides for the equitable allocation of reasonable fees among its
members.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(4).
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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 effective pursuant to Section
19(b)(3)(A)(ii) of the Act \6\ and Rule 19b-4(f)(2) thereunder \7\
because it changes the PCX fee schedule. At any time within 60 days
after the filing of this proposed rule change, the Commission may
summarily abrogate the 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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\6\ 15 U.S.C. 78s(b)(3)(A)(ii).
\7\ 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 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 the 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-2003-26 and should
be submitted by July 14, 2003.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-15713 Filed 6-20-03; 8:45 am]
BILLING CODE 8010-01-P