[Federal Register Volume 73, Number 6 (Wednesday, January 9, 2008)]
[Notices]
[Pages 1659-1660]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-150]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57090; File No. SR-Phlx-2007-94]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Amending the Examinations Fee
January 3, 2008.
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 December 28, 2007, the Philadelphia Stock Exchange, Inc. (``Phlx''
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 substantially prepared by the
Exchange. The Exchange has designated this proposal as one establishing
or changing a due, fee, or other charge imposed by Phlx under section
19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\
which renders the proposal effective upon filing with the Commission.
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.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Phlx proposes to expand its current Examinations Fee in order to
assess this fee on: (1) Member organizations and participant
organizations,\5\ for whom the Exchange is the Designated Examining
Authority (``DEA''), that do not employ any off-floor traders; and (2)
``inactive organizations.'' While changes to the Exchange's fee
schedule pursuant to this proposal are effective upon filing, the
Exchange has designated that the proposed changes become operative
beginning January 1, 2008. The text of the proposed rule change is
available at the Exchange, on its Web site at http:// phlx.com/exchange/phlx_rule_fil.html, and at Commission's Public Reference
Room.
---------------------------------------------------------------------------
\5\ For purposes of this proposed rule change, the term
``participant organization'' means Foreign Currency Options
Participant Organization, as that term is defined in Section 1-1(l)
of Phlx's By-Laws. See telephone conversation between Cynthia
Hoekstra, Vice President, Phlx, and Christopher Chow, Special
Counsel, Division of Trading and Markets, Commission, on December
31, 2007.
---------------------------------------------------------------------------
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
Currently, the Exchange implements a tiered Examinations Fee based
on the number of off-floor traders in the same member/participant
organization for whom the Exchange is the DEA.\6\ Specifically, a
member/participant organization is assessed $2,100 per month for one to
ten off-floor traders; $2,600 per month for 11 to 50 off-floor traders;
$5,000 per month for 51 to 200 off-floor traders; and $12,500 per month
for over 200 off-floor traders. However, the following member
organizations are currently exempt from the assessment of the
Examinations Fee: (1) Inactive organizations; \7\ and (2) organizations
operating through one or more Phlx markets that demonstrated that 25%
or more of its revenue as reflected on the most recently submitted
FOCUS report or transactions as reflected on its purchase and sales
blotter are derived from securities transactions on the Phlx.
---------------------------------------------------------------------------
\6\ In connection with charges assessed in connection with the
trading of equity securities on XLE (the Exchange's equity trading
system), Sponsored Participants are not included in the calculation
of the number of off-floor traders in a Sponsoring Member
Organization. See Securities Exchange Act Release No. 54941
(December 14, 2006), 71 FR 77079 (December 22, 2006) (SR-Phlx-2006-
70).
\7\ An inactive organization is defined as one that has no
securities transaction revenue, as determined by Financial and
Operational Combined Uniform Single Report (``FOCUS reports'') or
other financial filings, as long as the member/participant
organization continues to have no such revenue each month.
---------------------------------------------------------------------------
The Exchange proposes to assess the Examinations Fee on those
member/participant organizations who do not have any off-floor traders
because the Exchange must examine those member/participant
organizations for whom the Exchange is the DEA.\8\ Member/
[[Page 1660]]
participant organizations with no off-floor traders in the same member/
participant organization would be assessed a monthly fee of $2,100,
which is the same fee that is currently assessed on member/participant
organizations with one to ten off-floor traders.
---------------------------------------------------------------------------
\8\ Member/participant organizations that have operated without
an off-floor trader generally rely on persons registered with
affiliated broker-dealers or operate utilizing a ``black box''
trading technology.
---------------------------------------------------------------------------
Additionally, the Exchange proposes to assess the Examinations Fee
on inactive organizations, thereby eliminating the current inactive
member/participant organization exemption.\9\ As a result, inactive
member/participant organizations for whom the Exchange is the DEA will
be assessed the Examinations Fee based on the number of off-floor
traders in that inactive member/participant organization.\10\
---------------------------------------------------------------------------
\9\ The Exchange represents that it will continue to conduct
examinations of member/participant organizations that have chosen to
elect an ``inactive status.'' See telephone conversation between
Cynthia Hoekstra, Vice President, Phlx, and Christopher Chow,
Special Counsel, Division of Trading and Markets, Commission, on
January 2, 2008.
\10\ Member organizations operating through one or more Phlx
markets that demonstrated that 25% or more of its revenue as
reflected on the most recently submitted FOCUS report or
transactions as reflected on its purchase and sales blotter are
derived from securities transactions on Phlx will continue to be
exempt from the assessment of the Examinations Fee.
---------------------------------------------------------------------------
The Exchange intends to implement the Examinations Fee as set forth
in this proposal beginning January 1, 2008.
The Exchange states that the purpose of revising the Examinations
Fee is to more efficiently and effectively assess member/participant
organizations for costs in connection with conducting examinations of
member/participant organizations that do not have any off-floor traders
for whom the Exchange is the DEA and for those that choose to elect an
``inactive status.''
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of section 6 of the Act \11\ in general, and
furthers the objectives of section 6(b)(4) of the Act \12\ in
particular, in that it is designed to provide for the equitable
allocation of reasonable dues, fees, and other charges among its
members and other persons using its facilities. According to the
Exchange, assessing member/participant organizations an Examinations
Fee as set forth in this proposal should more efficiently and
effectively charge those member/participant organizations for costs
associated with conducting examinations of these organizations.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
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 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
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change has been designated as a fee
change pursuant to section 19(b)(3)(A)(ii) of the Act \13\ and Rule
19b-4(f)(2) \14\ thereunder, because it establishes or changes a due,
fee, or other charge imposed by the Exchange. Accordingly, the proposal
took effect upon filing with the Commission. 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.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78s(b)(3)(A)(ii).
\14\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-Phlx-2007-94 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2007-94. 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,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 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, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-Phlx-2007-94 and should be
submitted on or before January 30, 2008.
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-150 Filed 1-8-08; 8:45 am]
BILLING CODE 8011-01-P