Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to Transaction Fees in Connection With the iShares® FTSE/Xinhua China 25 Index Fund, 932-933 [05-128]

Download as PDF 932 Federal Register / Vol. 70, No. 3 / Wednesday, January 5, 2005 / Notices For the Commission, by the Division of Investment Management, pursuant to delegated authority. Margaret H. McFarland, Deputy Secretary. [FR Doc. 05–129 Filed 1–4–05; 8:45 am] BILLING CODE 8010–01–M SECURITIES AND EXCHANGE COMMISSION [Release No. 34–50940; File No. SR–Amex– 2004–102] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to Transaction Fees in Connection With the iShares FTSE/Xinhua China 25 Index Fund December 28, 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 December 13, 2004, the American Stock Exchange LLC (‘‘Amex’’ 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. On December 23, 2004, 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. 1. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to revise transaction fees for specialists and registered options traders (‘‘ROTs’’) in connection with transactions in the iShares FTSE/Xinhua China 25 Index Fund (‘‘FTSE/Xinhua Fund’’). The text of the proposed rule change is available at the office of The Secretary, Amex, and at the Commission. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 In Amendment No. 1, the Exchange: (1) Specified that the trading of the iShares FTSE/ Xinhua China 25 Index Fund commended on the Exchane on December 20, 2004; (2) clarified that the proposed transaction fee with respect to the iShares FTSE/Xinhua China 25 Index Fund is not changing; (3) made clarifying changes to the statement of the purpose of the proposed license fee; and (4) made technical changes to the proposed rule text. The Commission notes that Exhibit 4 of Amendment No. 1 included marked additions to the Amex Exchange Traded Funds and Trust Issued Receipts Fee Schedule that had already been indicated in the original proposal. 2 17 VerDate jul<14>2003 17:49 Jan 04, 2005 Jkt 205001 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The proposed rule change sets forth the manner in which the Exchange will charge transaction fees for the FTSE/ Xinhua Fund. The Amex launched the trading of the FTSE/Xinhua Fund on December 20, 2004.4 Transaction charges for specialists, ROTs, brokerdealers and customers in connection with the FTSE/Xinhua Fund would be billed at current rates existing for exchange traded funds (‘‘ETFs’’) without unreimbursed fees to a third party as set forth in Item #7 to the Exchange’s Equity Fee Schedule and Section 1 of the Amex Exchange Traded Funds and Trust Issued Receipts Fee Schedule. Accordingly, specialists would be charged a transaction fee of $.0033 per share ($0.33 per 100 shares), capped at $300 per trade (90,909 shares) while ROTs would be charged a transaction fee of $.0036 per share ($0.36 per 100 shares), capped at $300 per trade (83,333 shares). Transaction charges for specialists would be capped at $400,000 per month per specialist unit. Off-floor orders (i.e., customer and broker-dealer) would be charged a transaction fee of $.006 per share ($.60 per 100 shares), capped at $100 per trade (16,667 shares). These fees are not changing. In addition to the transaction charges set forth above, the Exchange would charge specialists and ROTs a license fee of $0.06 per 100 shares in connection with transactions in shares of the FTSE/Xinhua Fund. Thus, the total proposed fee for transactions in shares of the FTSE/Xinhua Fund is: (1) For specialists, $.0039 per share ($0.39 per 100 shares), capped at $300 per trade (76,923 shares); (2) for ROTs, 4 See Securities Exchange Act Release No. 50800 (December 6, 2004), 69 FR 72228 (December 13, 2004) (SR–Amex–2004–85). PO 00000 Frm 00156 Fmt 4703 Sfmt 4703 $.0042 per share ($0.42 per 100 shares), capped at $300 per trade (71,428 shares); and (3) for customers and brokers-dealers, $.006 per share ($0.60 per 100 shares), capped at $100 per trade (16,667 shares). The purpose of the proposed license fee is for the Exchange to recoup its costs in connection with the index license fee for the trading of shares of the FTSE/Xinhua Fund. The proposed licensing fee will be collected on every transaction of the FTSE/Xinhua Fund in which the specialist or ROT is a party. The Exchange believes that requiring the payment of a per contract licensing fee by those specialists units and ROTs that are the beneficiaries of the Exchange’s index license agreements is justified and consistent with the rules of the Exchange. In addition, passing along the license fee (on a per contract basis) to the specialist allocated to the FTSE/ Xinhua Fund and those ROTs trading such product is efficient and consistent with the intent of the Exchange to pass on its non-reimbursed costs to those market participants that are the beneficiaries. The Exchange notes that in recent years it has increased a number of member fees to better align Exchange fees with the actual cost of delivering services and reduce Exchange subsidies of such services.5 Implementation of this proposal is consistent with the reduction and/or elimination of theses subsidies. The Exchange submits that the proposed license fee is intended to recoup the costs associated with the trading of the FTSE/Xinhua Fund. The Exchange will monitor the revenue generated in connection with the FTSE/ Xinhua Fund license fee. In the event the revenue generated is greater than the Exchange’s cost to the index provider, the Exchange will seek to rebate the difference back to the affected specialists and ROTs. The Amex believes that this fee will help to allocate to those specialists and ROTs transacting in FTSE/Xinhua Fund shares a fair share of the related costs of offering such ETFs. Accordingly, the Exchange believes that the proposed fee is reasonable. 2. Statutory Basis The proposed fee change is consistent with section 6(b)(4) of the Act 6 regarding the equitable allocation of reasonable dues, fees, and other charges 5 See Securities Exchange Act Release Nos. 45360 (January 29, 2002), 67 FR 5626 (February 6, 2002) (SR–Amex–2001–102) and 44286 (May 9, 2001), 66 FR 27187 (May 16, 2001) (SR–Amex–2001–22). 6 15 U.S.C. 78f(b)(4). E:\FR\FM\05JAN1.SGM 05JAN1 Federal Register / Vol. 70, No. 3 / Wednesday, January 5, 2005 / Notices among Exchange members and other persons using Exchange facilities. B. Self-Regulatory Organization’s Statement on Burden on Competition 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. 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) of the Act 7 and subparagraph (f)(2) of Rule 19b–4 thereunder 8 because it establishes or changes a due, fee, or other charge imposed by the Exchange. At any time within 60 days of December 23, 2004, the Commission may summarily abrogate such proposed 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 the furtherance of the purposes of the Act.9 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: • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–Amex–2004–102 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549–0609. 7 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 9 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C), the Commission considers that period to have commenced on December 23, 2004, the date the Exchange filed Amendment No. 1 to the proposed rule change. 8 17 17:49 Jan 04, 2005 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.10 Margaret H. McFarland, Deputy Secretary. [FR Doc. 05–128 Filed 1–4–05; 8:45 am] BILLING CODE 8010–01–M Electronic Comments VerDate jul<14>2003 All submissions should refer to File Number SR–Amex–2004–102. 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 (https://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, 450 Fifth Street, NW., Washington, DC 20549. 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–Amex– 2004–102 and should be submitted on or before January 26, 2005. Jkt 205001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–50930; File No. SR–NASD– 2004–182] Self-Regulatory Organizations, National Association of Securities Dealers, Inc.; Notice of Filing of Proposed Rule Change Regarding Minor Modifications to the Nasdaq Opening Process for Nasdaq-Listed Stocks 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 13, 2004, the National Association of 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 Frm 00157 Fmt 4703 Securities Dealers, Inc. (‘‘NASD’’), through its subsidiary, The Nasdaq Stock Market, Inc. (‘‘Nasdaq’’), 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 Nasdaq. Nasdaq has designated the proposed rule change as ‘‘non-controversial’’ under section 19(b)(3)(A)3 of the Act and Rule 19b– 4(f)(6) thereunder,4 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Nasdaq is filing a proposed rule change to modify the process for calculating the Nasdaq Official Opening Price (‘‘NOOP’’). There is no new proposed rule language for this proposal. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq 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. Nasdaq 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 Nasdaq previously proposed to create two new voluntary opening processes— the Modified Opening Process and the Nasdaq Opening Cross—that together constitute the beginning of the trading day for all Nasdaq-listed securities. The Commission approved that proposal on September 16, 2004.5 Nasdaq has 3 15 December 27, 2004. PO 00000 933 Sfmt 4703 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 5 Securities Exchange Act Release No. 50405 (September 16, 2004) 69 FR 57118 (September 23, 2004) (approving SR–NASD–2004–071). The Commission notes that Nasdaq made minor amendments to the Modified Opening Process and the Nasdaq Opening Cross as of October 12, 2004, which were not reflected in this filing. The Commission has made changes to the filing to correct this oversight. See Securities Exchange Act 4 17 Continued E:\FR\FM\05JAN1.SGM 05JAN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 70, Number 3 (Wednesday, January 5, 2005)]
[Notices]
[Pages 932-933]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-128]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50940; File No. SR-Amex-2004-102]


Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto Relating to Transaction Fees in Connection 
With the iShares[supreg] FTSE/Xinhua China 25 Index Fund

December 28, 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 December 13, 2004, the American Stock Exchange LLC (``Amex'' 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. On 
December 23, 2004, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange: (1) Specified that the 
trading of the iShares[supreg] FTSE/Xinhua China 25 Index Fund 
commended on the Exchane on December 20, 2004; (2) clarified that 
the proposed transaction fee with respect to the iShares[supreg] 
FTSE/Xinhua China 25 Index Fund is not changing; (3) made clarifying 
changes to the statement of the purpose of the proposed license fee; 
and (4) made technical changes to the proposed rule text. The 
Commission notes that Exhibit 4 of Amendment No. 1 included marked 
additions to the Amex Exchange Traded Funds and Trust Issued 
Receipts Fee Schedule that had already been indicated in the 
original proposal.
---------------------------------------------------------------------------

1. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to revise transaction fees for specialists 
and registered options traders (``ROTs'') in connection with 
transactions in the iShares[supreg] FTSE/Xinhua China 25 Index Fund 
(``FTSE/Xinhua Fund''). The text of the proposed rule change is 
available at the office of The Secretary, Amex, 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The proposed rule change sets forth the manner in which the 
Exchange will charge transaction fees for the FTSE/Xinhua Fund. The 
Amex launched the trading of the FTSE/Xinhua Fund on December 20, 
2004.\4\ Transaction charges for specialists, ROTs, broker-dealers and 
customers in connection with the FTSE/Xinhua Fund would be billed at 
current rates existing for exchange traded funds (``ETFs'') without 
unreimbursed fees to a third party as set forth in Item 7 to 
the Exchange's Equity Fee Schedule and Section 1 of the Amex Exchange 
Traded Funds and Trust Issued Receipts Fee Schedule. Accordingly, 
specialists would be charged a transaction fee of $.0033 per share 
($0.33 per 100 shares), capped at $300 per trade (90,909 shares) while 
ROTs would be charged a transaction fee of $.0036 per share ($0.36 per 
100 shares), capped at $300 per trade (83,333 shares). Transaction 
charges for specialists would be capped at $400,000 per month per 
specialist unit. Off-floor orders (i.e., customer and broker-dealer) 
would be charged a transaction fee of $.006 per share ($.60 per 100 
shares), capped at $100 per trade (16,667 shares). These fees are not 
changing.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 50800 (December 6, 
2004), 69 FR 72228 (December 13, 2004) (SR-Amex-2004-85).
---------------------------------------------------------------------------

    In addition to the transaction charges set forth above, the 
Exchange would charge specialists and ROTs a license fee of $0.06 per 
100 shares in connection with transactions in shares of the FTSE/Xinhua 
Fund. Thus, the total proposed fee for transactions in shares of the 
FTSE/Xinhua Fund is: (1) For specialists, $.0039 per share ($0.39 per 
100 shares), capped at $300 per trade (76,923 shares); (2) for ROTs, 
$.0042 per share ($0.42 per 100 shares), capped at $300 per trade 
(71,428 shares); and (3) for customers and brokers-dealers, $.006 per 
share ($0.60 per 100 shares), capped at $100 per trade (16,667 shares).
    The purpose of the proposed license fee is for the Exchange to 
recoup its costs in connection with the index license fee for the 
trading of shares of the FTSE/Xinhua Fund. The proposed licensing fee 
will be collected on every transaction of the FTSE/Xinhua Fund in which 
the specialist or ROT is a party. The Exchange believes that requiring 
the payment of a per contract licensing fee by those specialists units 
and ROTs that are the beneficiaries of the Exchange's index license 
agreements is justified and consistent with the rules of the Exchange. 
In addition, passing along the license fee (on a per contract basis) to 
the specialist allocated to the FTSE/Xinhua Fund and those ROTs trading 
such product is efficient and consistent with the intent of the 
Exchange to pass on its non-reimbursed costs to those market 
participants that are the beneficiaries.
    The Exchange notes that in recent years it has increased a number 
of member fees to better align Exchange fees with the actual cost of 
delivering services and reduce Exchange subsidies of such services.\5\ 
Implementation of this proposal is consistent with the reduction and/or 
elimination of theses subsidies.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release Nos. 45360 (January 29, 
2002), 67 FR 5626 (February 6, 2002) (SR-Amex-2001-102) and 44286 
(May 9, 2001), 66 FR 27187 (May 16, 2001) (SR-Amex-2001-22).
---------------------------------------------------------------------------

    The Exchange submits that the proposed license fee is intended to 
recoup the costs associated with the trading of the FTSE/Xinhua Fund. 
The Exchange will monitor the revenue generated in connection with the 
FTSE/Xinhua Fund license fee. In the event the revenue generated is 
greater than the Exchange's cost to the index provider, the Exchange 
will seek to rebate the difference back to the affected specialists and 
ROTs. The Amex believes that this fee will help to allocate to those 
specialists and ROTs transacting in FTSE/Xinhua Fund shares a fair 
share of the related costs of offering such ETFs. Accordingly, the 
Exchange believes that the proposed fee is reasonable.
2. Statutory Basis
    The proposed fee change is consistent with section 6(b)(4) of the 
Act \6\ regarding the equitable allocation of reasonable dues, fees, 
and other charges

[[Page 933]]

among Exchange members and other persons using Exchange facilities.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    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. 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) of the Act \7\ and subparagraph (f)(2) of Rule 19b-4 
thereunder \8\ because it establishes or changes a due, fee, or other 
charge imposed by the Exchange. At any time within 60 days of December 
23, 2004, the Commission may summarily abrogate such proposed 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 the furtherance of the purposes of the Act.\9\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(2).
    \9\ For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change under 
Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C), the 
Commission considers that period to have commenced on December 23, 
2004, the date the Exchange filed Amendment No. 1 to the proposed 
rule change.
---------------------------------------------------------------------------

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 (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-Amex-2004-102 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-Amex-2004-102. 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 (https://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, 450 Fifth 
Street, NW., Washington, DC 20549. 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-
Amex-2004-102 and should be submitted on or before January 26, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 05-128 Filed 1-4-05; 8:45 am]
BILLING CODE 8010-01-M

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