Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Increasing the Firm-Related Equity Option and Index Option Comparison and Transaction Cap, 3088-3089 [E5-176]
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3088
Federal Register / Vol. 70, No. 12 / Wednesday, January 19, 2005 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5–178 Filed 1–18–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51024; File No. SR-Phlx2004-94]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to Increasing the
Firm-Related Equity Option and Index
Option Comparison and Transaction
Cap
January 11, 2005.
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, 2004, 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 prepared by the Exchange.
Phlx filed this proposal pursuant to
Section 19(b)(3)(A)(ii) 3 of the Act and
Rule 19b–4(f)(2) 4 thereunder as a
proposal establishing or changing a due,
fee, or other charge imposed by the selfregulatory organization, 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Phlx proposes to amend its schedule
of fees to increase the current cap of
$50,000 per month per member
organization to $60,000, to be imposed
on all ‘‘firm-related’’ equity option and
index option comparison and
transaction charges combined.
This proposal is scheduled to become
effective for transactions settling on or
after January 3, 2005. The text of the
proposed rule change is available at
Phlx and at the Commission.
13 17
CFR 200.30–3(a)(12).
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).
1 15
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15:11 Jan 18, 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,
Phlx included statements concerning
the purpose of and basis for its proposal
and discussed any comments it received
on the proposal. The text of these
statements may be examined at the
places specified in Item IV below. The
Phlx 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 imposes a
cap of $50,000 per member organization
on all ‘‘firm-related’’ equity option and
index option comparison and
transaction charges combined.5
Specifically, ‘‘firm-related’’ charges
include equity option firm/proprietary
comparison charges, equity option firm/
proprietary transaction charges, equity
option firm/proprietary facilitation
transaction charges, index option firm
(proprietary and customer executions)
comparison charges, index option firm/
proprietary transaction charges, and
index option firm/proprietary
facilitation transaction charges
(collectively ‘‘firm-related charges’’).
Thus, such firm-related charges for
equity options and index options, in the
aggregate for one billing month, may not
exceed $50,000 per month per member
organization. Certain options are not
subject to the cap.6
5 The firm/proprietary comparison or transaction
charge applies to member organizations for orders
for the proprietary account of any member or nonmember broker-dealer that derives more than 35%
of its annual, gross revenues from commissions and
principal transactions with customers. Member
organizations will be required to verify this amount
to the Exchange by certifying that they have reached
this threshold by submitting a copy of their annual
report, which was prepared in accordance with
Generally Accepted Accounting Principles
(‘‘GAAP’’). In the event that a member organization
has not been in business for one year, the most
recent quarterly reports, prepared in accordance
with GAAP, will be accepted. See Securities
Exchange Act Release No. 43558 (November 14,
2000), 65 FR 69984 (November 21, 2000) (SR–Phlx–
00–85).
6 Variable (not fixed) firm-related charges are
imposed on the following three options: Full-size
index options (‘‘QCX’’) and Mini index options
(‘‘QCE’’) on the Nasdaq Composite Index, Inc. and
options listed on the iShares FTSE/Xinhua China
25 Index Fund (‘‘FXI Options’’), an exchange-traded
fund. In addition, certain license fees per contract
side may be imposed after the $50,000 cap is
reached. See Securities Exchange Act Release No.
50836 (December 10, 2004), 69 FR 75584 (December
17, 2004) (SR-Phlx-2004-70).
PO 00000
Frm 00094
Fmt 4703
Sfmt 4703
Pursuant to this proposal, the cap
would increase from $50,000 to $60,000.
No other changes to the firm-related
equity option and index option cap are
being proposed at this time.
The purpose of the proposed rule
change is to raise revenue, while
continuing to promote equity option
and index option business on the Phlx.
Specifically, the Exchange believes that
imposing a cap of $60,000 (rather than
$50,000) will continue to offer an
incentive for member organizations to
transact more volume on the Phlx floor.
An increase in firm orders should
provide more trading opportunities for
floor members, thereby increasing
revenue potential to the membership, in
addition to increasing revenue to the
Exchange. Because the $50,000 cap was
established over one year ago,7 the
Exchange believes that it is now
appropriate to raise it by $10,000.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act 8 in general, and
furthers the objectives of Section 6(b)(4)
of the Act 9 in particular, in that it is an
equitable allocation of reasonable fees
among Exchange members.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any inappropriate 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 either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing proposal has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act 10 and Rule
19b–4(f)(2) 11 thereunder as a proposal
establishing or changing a due, fee, or
other charge imposed by the selfregulatory organization. At any time
within 60 days of 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
7 See Securities Exchange Act Release No. 48459
(September 8, 2003), 68 FR 54034 (September 15,
2003) (SR-Phlx-2003-61).
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(4).
10 15 U.S.C. 78s(b)(3)(A)(ii).
11 17 CFR 240.19b–4(f)(2).
E:\FR\FM\19JAN1.SGM
19JAN1
Federal Register / Vol. 70, No. 12 / Wednesday, January 19, 2005 / Notices
appropriate in the public interest, for
the protection of investors, or otherwise
in furtherance of the purposes of the
Act.
IV. Solicitation of Comments
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.12
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5–176 Filed 1–18–05; 8:45 am]
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:
BILLING CODE 8010–01–P
Electronic Comments
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to an Electronic Audit
Trail for Orders in Options Overlying
the Standard and Poor’s Depositary
Receipts
• 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-Phlx-2004-94 on the subject
line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51028; File No. SR-Phlx2005-04]
January 12, 2005.
Paper Comments
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
• Send paper comments in triplicate
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
to Jonathan G. Katz, Secretary,
notice is hereby given that on January
Securities and Exchange Commission,
11, 2005, the Philadelphia Stock
450 Fifth Street, NW., Washington, DC
Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’)
20549–0609.
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
All submissions should refer to File
proposed rule change as described in
Number SR-Phlx-2004-94. This file
Items I and II below, which Items have
number should be included on the
subject line if e-mail is used. To help the been prepared by the Phlx. The
Exchange has filed the proposal as a
Commission process and review your
‘‘non-controversial’’ rule change
comments more efficiently, please use
only one method. The Commission will pursuant to Section 19(b)(3)(A) of the 4
3
post all comments on the Commission’s Act, and Rule 19b–4(f)(6) thereunder,
which renders the proposal effective
Internet Web site (https://www.sec.gov/
upon filing with the Commission.5 The
rules/sro.shtml). Copies of the
Commission is publishing this notice to
submission, all subsequent
solicit comments on the proposed rule
amendments, all written statements
change from interested persons.
with respect to the proposed rule
I. Self-Regulatory Organization’s
change that are filed with the
Statement of the Terms of Substance of
Commission, and all written
the Proposed Rule Change
communications relating to the
proposed rule change between the
The Phlx proposes to amend Phlx
Commission and any person, other than Rule 1063, Responsibilities of Floor
those that may be withheld from the
Brokers, and Option Floor Procedure
Advice (‘‘OFPA’’) C–2, Options Floor
public in accordance with the
Broker Management System (‘‘FBMS’’),
provisions of 5 U.S.C. 552, will be
to extend the date on which Floor
available for inspection and copying in
Brokers would be required to create an
the Commission’s Public Reference
Room. Copies of such filing also will be electronic audit trail for non-electronic
orders in options overlying the Standard
available for inspection and copying at
and Poor’s Depositary Receipts
the principal office of the Phlx. All
(‘‘SPDRs’’) until March 28, 2005. The
comments received will be posted
text of the proposed rule change is
without change; the Commission does
not edit personal identifying
12 17 CFR 200.30–3(a)(12).
information from submissions. You
1 15 U.S.C. 78s(b)(1).
should submit only information that
2 17 CFR 240.19b–4.
you wish to make available publicly. All
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
submissions should refer to File
5 The Phlx asked the Commission to waive the 30Number SR-Phlx-2004-94 and should be
submitted on or before February 9, 2005. day operative delay. See Rule 19b–4(f)(6)(iii). 17
CFR 240.19b–4(f)(6)(iii).
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15:11 Jan 18, 2005
Jkt 205001
PO 00000
Frm 00095
Fmt 4703
Sfmt 4703
3089
below. Proposed new language is in
italics.
Responsibilities of Floor Brokers
Rule 1063. (a)–(d)—No change.
(e)(i) Options Floor Broker
Management System. In order to create
an electronic audit trail for options
orders represented by Floor Brokers on
the Exchange’s Options Floor, a Floor
Broker or such Floor Broker’s employees
shall, contemporaneously upon receipt
of an order and prior to the
representation of such an order in the
trading crowd, record all options orders
represented by such Floor Broker onto
the electronic Options Floor Broker
Management System (as described in
Rule 1080, Commentary .06). The
following specific information with
respect to orders represented by a Floor
Broker shall be recorded by such Floor
Broker or such Floor Broker’s
employees: (i) the order type (i.e.,
customer, firm, broker-dealer); (ii) the
option symbol; (iii) buy, sell, or cancel;
(iv) call, put, complex (i.e., spread,
straddle), or contingency order as
described in Rule 1066; (v) number of
contracts; (vi) limit price or market
order or, in the case of a complex order,
net debit or credit, if applicable; (vii)
whether the transaction is to open or
close a position; and (viii) The Options
Clearing Corporation (‘‘OCC’’) clearing
number of the broker-dealer that
submitted the order (collectively, the
‘‘required information’’). Upon the
execution of such an order, the Floor
Broker shall enter the time of execution
of the trade. Floor Brokers or their
employees shall enter clearing
information onto the Options Floor
Broker Management System no later
than five minutes after the execution of
a trade. In the event of a malfunction in
the Options Floor Broker Management
System, Floor Brokers shall record the
required information on trade tickets,
and shall not represent an order for
execution which has not been time
stamped with the time of entry on the
trading floor. Such trade tickets shall be
time stamped upon the execution of
such an order. Floor Brokers or their
employees shall enter the required
information that is recorded on such
trade tickets into AUTOM for inclusion
in the electronic audit trail.
(ii) Orders in Options Overlying
Standard and Poor’s Depositary
Receipts (‘‘SPDRs’’). The requirements
of sub-paragraph (e)(i) above shall apply
to options overlying SPDRs beginning on
March 28, 2005.
(f) No change.
E:\FR\FM\19JAN1.SGM
19JAN1
]]>Agencies
[Federal Register Volume 70, Number 12 (Wednesday, January 19, 2005)]
[Notices]
[Pages 3088-3089]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-176]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51024; File No. SR-Phlx-2004-94]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Increasing the Firm-Related Equity Option and Index Option
Comparison and Transaction Cap
January 11, 2005.
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, 2004, 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 prepared by the Exchange. Phlx
filed this proposal pursuant to Section 19(b)(3)(A)(ii) \3\ of the Act
and Rule 19b-4(f)(2) \4\ thereunder as a proposal establishing or
changing a due, fee, or other charge imposed by the self-regulatory
organization, 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 amend its schedule of fees to increase the current
cap of $50,000 per month per member organization to $60,000, to be
imposed on all ``firm-related'' equity option and index option
comparison and transaction charges combined.
This proposal is scheduled to become effective for transactions
settling on or after January 3, 2005. The text of the proposed rule
change is available at Phlx 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, Phlx included statements
concerning the purpose of and basis for its proposal and discussed any
comments it received on the proposal. The text of these statements may
be examined at the places specified in Item IV below. The Phlx 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 imposes a cap of $50,000 per member
organization on all ``firm-related'' equity option and index option
comparison and transaction charges combined.\5\ Specifically, ``firm-
related'' charges include equity option firm/proprietary comparison
charges, equity option firm/proprietary transaction charges, equity
option firm/proprietary facilitation transaction charges, index option
firm (proprietary and customer executions) comparison charges, index
option firm/proprietary transaction charges, and index option firm/
proprietary facilitation transaction charges (collectively ``firm-
related charges''). Thus, such firm-related charges for equity options
and index options, in the aggregate for one billing month, may not
exceed $50,000 per month per member organization. Certain options are
not subject to the cap.\6\
---------------------------------------------------------------------------
\5\ The firm/proprietary comparison or transaction charge
applies to member organizations for orders for the proprietary
account of any member or non-member broker-dealer that derives more
than 35% of its annual, gross revenues from commissions and
principal transactions with customers. Member organizations will be
required to verify this amount to the Exchange by certifying that
they have reached this threshold by submitting a copy of their
annual report, which was prepared in accordance with Generally
Accepted Accounting Principles (``GAAP''). In the event that a
member organization has not been in business for one year, the most
recent quarterly reports, prepared in accordance with GAAP, will be
accepted. See Securities Exchange Act Release No. 43558 (November
14, 2000), 65 FR 69984 (November 21, 2000) (SR-Phlx-00-85).
\6\ Variable (not fixed) firm-related charges are imposed on the
following three options: Full-size index options (``QCX'') and Mini
index options (``QCE'') on the Nasdaq Composite Index, Inc.[reg] and
options listed on the iShares FTSE/Xinhua China 25 Index Fund (``FXI
Options''), an exchange-traded fund. In addition, certain license
fees per contract side may be imposed after the $50,000 cap is
reached. See Securities Exchange Act Release No. 50836 (December 10,
2004), 69 FR 75584 (December 17, 2004) (SR-Phlx-2004-70).
---------------------------------------------------------------------------
Pursuant to this proposal, the cap would increase from $50,000 to
$60,000. No other changes to the firm-related equity option and index
option cap are being proposed at this time.
The purpose of the proposed rule change is to raise revenue, while
continuing to promote equity option and index option business on the
Phlx. Specifically, the Exchange believes that imposing a cap of
$60,000 (rather than $50,000) will continue to offer an incentive for
member organizations to transact more volume on the Phlx floor. An
increase in firm orders should provide more trading opportunities for
floor members, thereby increasing revenue potential to the membership,
in addition to increasing revenue to the Exchange. Because the $50,000
cap was established over one year ago,\7\ the Exchange believes that it
is now appropriate to raise it by $10,000.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 48459 (September 8,
2003), 68 FR 54034 (September 15, 2003) (SR-Phlx-2003-61).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \8\ in general, and furthers the
objectives of Section 6(b)(4) of the Act \9\ in particular, in that it
is an equitable allocation of reasonable fees among Exchange members.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b).
\9\ 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 inappropriate 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 either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposal has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \10\ and Rule 19b-4(f)(2) \11\ thereunder as
a proposal establishing or changing a due, fee, or other charge imposed
by the self-regulatory organization. At any time within 60 days of 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
[[Page 3089]]
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-Phlx-2004-94 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-Phlx-2004-94. 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 (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. Copies of such
filing also will be available for inspection and copying at the
principal office of the Phlx. 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-2004-94 and should be submitted on or before
February 9, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------
\12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-176 Filed 1-18-05; 8:45 am]
BILLING CODE 8010-01-P
