[Federal Register Volume 68, Number 199 (Wednesday, October 15, 2003)]
[Notices]
[Pages 59439-59440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-26041]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-48597; File No. SR-PCX-2003-57]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc.
Relating to the Exchange's Schedule of Fees and Charges for Exchange
Services
October 7, 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 September 29, 2003, the Pacific Exchange, Inc. (``PCX'' or
``Exchange'') 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 Exchange. 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 Exchange 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 rule 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 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 Exchange is proposing to make changes to its Schedule of Fees
and Charges with respect to the following fees effective for the
October 2003 trading month: (i) PCX Membership Fees relating to Options
Orientation; (ii) PCX Options and Equities Regulatory Fees relating to
termination of Registration Fees; (iii) PCX Options Ticket Data Entry
Fee; (iv) Broker Dealer Surcharge Fee, and (v) PCX Options Floor,
Market Maker and Remote Market Maker Fees.
Orientation and Testing Fees
Orientation and testing fees are comprised of different components
including orientation and examination administration, background
investigations and fingerprinting. Currently, the Exchange's Schedule
of Fees and Charges--General Membership Fees--includes a $1,000 Options
Orientation Fee. In connection with the launch of PCX Plus,\3\ the
Exchange has reconfigured a development and delivery process for the
Exchange's Orientation and Testing program. The Exchange plans to
execute a transition plan to facilitate an orderly transfer of the
responsibilities relating to the orientation and testing from a third-
party provider to the PCX and the NASD. Pursuant to the revised
[[Page 59440]]
structure, the Exchange will develop orientation and testing content,
and the NASD will administer the examination process. This arrangement
will result in the elimination of certain third-party related charges.
Therefore, as a result of reduced third-party costs incurred by the
Exchange, the Exchange proposes to allow separate charges for
background investigations ($125) and fingerprinting ($35), as
applicants may only require these independent services from the
Exchange.
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\3\ See Securities Exchange Act Release No. 47838 (May 13,
2003), 68 FR 27129 (May 19, 2003) (order approving PCX 2002-36).
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PCX General Membership Fees--Registration Fee (Termination)
The Exchange proposes to amend its Schedule of Fees and Charges to
adopt a Registered Representative Termination Fee of $30.00. The
Exchange represents that the revenue generated by this fee will help to
offset the cost of increased regulatory efforts by the Exchange. The
Exchange further represents that this fee is comparable to the fee
imposed by the Chicago Board Options Exchange, Inc. and the American
Stock Exchange, LLC.\4\
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\4\ See Securities Exchange Act Release Nos. 46266 (July 25,
2002), 67 FR 49969 (August 1, 2002) (SR-CBOE-2002-37) and 44286 (May
9, 2001), 66 FR 27187 (May 16, 2001) (SR-Amex-2001-22). Both
Exchanges have a $30 registered representative termination fee.
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PCX Options Ticket Data Entry Fee
The Exchange currently charges Ticket Data Entry Fees of $0.25 per
firm trade and $0.50 per Market Maker trade. The Exchange charges the
fee for every manual ticket transaction that an Exchange Staff member
enters into the PCX's Pacific Options Exchange Trading System for the
Market Maker. The Exchange proposes to eliminate this fee because, due
to electronic order entry, the Exchange believes this fee for manual
handling is inconsequential and no longer necessary.
Broker Dealer Surcharge
Currently, the Exchange assesses a $0.20 per contract side Broker
Dealer Auto-Ex surcharge on orders that a Broker Dealer or Market Maker
enters and which the Exchange executes on the Exchange's Member Firm
Interaction system (without floor broker representation). The Exchange
proposes to modify its Schedule of Fees and Charges and apply the same
$0.20 per contract rate to comparable PCX Plus transactions. That is,
under the PCX Plus, Broker Dealer and Market Maker orders that are
routed electronically and executed without a floor broker will also be
subject to the $0.20 per contract surcharge.
PCX Options Floor, Market Maker and Remote Market Maker Fees
In connection with PCX Plus, the Exchange has created a new
category of member known as Remote Market Makers (``RMMs'').\5\ The
Exchange currently charges a $130 per month Options Floor Access Fee
for all registered floor members and personnel. The PCX proposes to
modify its rate schedule to add an RMM Access Fee in the amount of $130
per month to be assessed on those RMMs who do not pay a floor access
fee. The Exchange believes that it is appropriate to assess the same
fee on those members who choose to access PCX markets electronically
rather than through a physical presence on the floor.
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\5\ See Securities Exchange Act Release No. 47838 (May 13,
2003), 68 FR 27129 (May 19, 2003) (SR-PCX 2002-36).
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2. Statutory Basis
The Exchange believes that the proposal is consistent with Section
6(b) of the Act,\6\ in general, and Section 6(b)(4) of the Act,\7\ in
particular, in that it provides for the equitable allocation of
reasonable dues, fees and other charges among its members.
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\6\ 15 U.S.C. 78f(b).
\7\ 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 proposed rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \8\ and subparagraph (f)(2) of Rule 19b-4
thereunder,\9\ because it establishes or changes a due, fee, or other
charge imposed by the Exchange. At any time within 60 days after the
filing of the 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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\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 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 such filing will also be
available for inspection and copying at the principal office of the
PCX. All submissions should refer to file number SR-PCX-2003-57 and
should be submitted by November 5, 2003.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-26041 Filed 10-14-03; 8:45 am]
BILLING CODE 8010-01-U