Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval to a Proposed Rule Change and Amendment No. 1 Thereto Relating to Fees Applicable to Linkage P and P/A Orders, 10736-10738 [E5-878]

Download as PDF 10736 Federal Register / Vol. 70, No. 42 / Friday, March 4, 2005 / Notices notes that it previously approved the listing and trading of the Shares on NYSE.28 The Commission also believes that the proposal is consistent with Rule 12f–5 under the Act,29 which provides that an exchange shall not extend UTP to a security unless the exchange has in effect a rule or rules providing for transactions in the class or type of security to which the exchange extends UTP. The Exchange represented that it meets this requirement because it deems the Shares to be equity securities, thus rendering trading in the Shares subject to the existing rules of the Exchange governing the trading of equity securities, including rules relating to trading hours, trading halts, odd lots, and the minimum trading increment. The Commission further believes that the proposal is consistent with Section 11A(a)(1)(C)(iii) of the Act,30 which sets forth Congress’s finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities. Quotations for and last sale information regarding GLD are disseminated through the Consolidated Quotation System. Furthermore, as noted by the Exchange, various means exist for investors to obtain reliable gold price information exist and thereby monitor the underlying spot market in gold relative to the NAV of their Shares. Additionally, the Trust’s Web site will also provide an updated IIV at least every 15 seconds. If the Trust ceases to maintain or to calculate the IIV or if the value of the index ceases to be widely available, the Exchange would cease trading GLD. The Commission notes that, if GLD were to be delisted by NYSE, the Exchange would no longer have authority to trade GLD pursuant to this order. In support of the proposal, the Exchange made the following representations: 1. The Exchange’s surveillance procedures are adequate to deter manipulation and that its existing surveillance procedures for investment the security is registered on that exchange pursuant to Section 12 of the Act. Section 12(f) of the Act excludes from this restriction trading in any security to which an exchange ‘‘extends UTP.’’ When an exchange extends UTP to a security, it allows its members to trade the security as if it were listed and registered on the exchange even though it is not so listed and registered. 28 See NYSE Approval Order, supra note 3. 29 17 CFR 240.12f–5. 30 15 U.S.C. 78k–1(a)(1)(C)(iii). VerDate jul<14>2003 19:07 Mar 03, 2005 Jkt 205001 company units will be utilized for the Shares. Among other things, the Exchange entered into an MOU with NYMEX for the sharing of information related to any financial instrument based, in whole or in part, upon an interest in or performance of gold. 2. The Exchange will distribute an information circular to its ETP Holders prior to the commencement of trading of GLD on the Exchange that explains its terms, characteristics, and risks of trading. 3. The Exchange will require an ETP Holder with a customer that purchases the Shares on the Exchange to provide that customer with a product prospectus and will note this prospectus delivery requirement in the information circular. This approval order is conditioned on the Exchange’s adherence to these representations. Finally, the Commission believes that the Exchange’s rules imposing trading restrictions and information barriers on ETP Holder acting as a registered Market Maker in the Shares in GLD are reasonable and consistent with the Act. These rules generally require an ETP Holder acting as a registered Market Maker in the Shares to provide to the Exchange with information relating to its trading in physical gold, gold futures contracts, options on gold futures, or any other gold derivatives. Further, an ETP Holder acting as a registered Market Maker in the Shares is prohibited from using any material nonpublic information received from any person associated with an ETP Holder or employee of such person regarding trading by such person or employee in physical gold, gold futures contracts, options on gold futures, or any other gold derivatives. The Commission finds good cause for approving the proposal, as amended, prior to the 30th day after the date of publication of the notice of filing thereof in the Federal Register. As noted previously, the Commission previously found that the listing and trading of GLD on NYSE is consistent with the Act.31 The Commission presently is not aware of any regulatory issue that should cause the Commission to revisit that earlier finding or preclude the trading of GLD on the Exchange pursuant to UTP. Therefore, accelerating approval of the proposal should benefit investors by creating, without undue delay, additional competition in the market for GLD. PO 00000 31 See supra note 3. Frm 00146 Fmt 4703 Sfmt 4703 V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,32 that the proposed rule change (SR–PCX–2004– 117), is approved on an accelerated basis. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.33 Margaret H. McFarland, Deputy Secretary. [FR Doc. E5–880 Filed 3–3–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–51257; File No. SR–Phlx– 2005–10] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval to a Proposed Rule Change and Amendment No. 1 Thereto Relating to Fees Applicable to Linkage P and P/A Orders February 25, 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 January 28, 2005, 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 and II below, which Items have been prepared by the Exchange. On February 16, 2005, 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 and is granting accelerated approval of the proposed rule change, as amended, on a pilot basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its schedule of fees to: (1) Reduce from $.45 per contract to $.15 per contract the Exchange’s equity option transaction charge 4 applicable to Principal Orders 32 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Form 19b–4 dated February 16, 2005 (‘‘Amendment No. 1’’). Amendment No. 1 replaced and superseded the original filing in its entirety. 4 The equity option transaction charge would apply to equity options and to options overlying Exchange-Traded Fund Shares. 33 17 E:\FR\FM\04MRN1.SGM 04MRN1 Federal Register / Vol. 70, No. 42 / Friday, March 4, 2005 / Notices (‘‘P Orders’’) sent to the Exchange via the Intermarket Options Linkage (‘‘Linkage’’) pursuant to the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage (‘‘Plan’’); 5 and (2) adopt a $.15 per contract equity option transaction charge for Linkage Principal Acting as Agent Orders (‘‘P/A Orders’’).6 The Exchange would charge the clearing member firm of the sender of inbound Linkage P and P/A Orders. Consistent with current practice and with the Plan, the Exchange would not charge for the execution of Satisfaction Orders sent through Linkage. The Exchange intends to incorporate this new fee structure as part of an existing pilot program, which is scheduled to expire July 31, 2005.7 The text of the proposed rule change is available on the Phlx’s Web site (https://www.phlx.com), at the Phlx’s Office of the Secretary, and at the Commission’s Public Reference Room. 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 had received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Phlx has prepared summaries, set forth in Sections A, B, and C below, of the 5 See Securities Exchange Act Release Nos. 43086 (July 28, 2000), 65 FR 48023 (August 4, 2000); (order approving the Plan); and 43573 (November 16, 2000), 65 FR 70851 (November 28, 2000) (order approving Phlx as a participant in the Plan). 6 Under Section 2(16) of the Plan and Exchange Rule 1083(k), a ‘‘Linkage Order’’ means an Immediate or Cancel order routed through the Linkage as permitted under the Plan. There are three types of Linkage Orders: (i) ‘‘Principal Acting as Agent Order,’’ which is an order for the principal account of a specialist (or equivalent entity on another Participant Exchange that is authorized to represent Public Customer orders), reflecting the terms of a related unexecuted Public Customer order for which the specialist is acting as agent; (ii) ‘‘Principal Order,’’ which is an order for the principal account of an Eligible Market Maker and is not a P/A Order; and (iii) ‘‘Satisfaction Order,’’ which is an order sent through the Linkage to notify a member of another Participant Exchange of a Trade-Through and to seek satisfaction of the liability arising from that Trade-Through. 7 See Securities Exchange Act Release No. 50125 (July 30, 2004), 69 FR 47479 (August 5, 2004) (SR– Phlx–2004–44). In that filing, the Exchange established, on a pilot basis, a fee of $.45 per contract for inbound P Orders. The instant proposed rule change would reduce the fee for inbound P Orders from $.45 per contract to $.15 per contract, and would establish, as part of the pilot, a fee of $.15 per contract for inbound P/A Orders. VerDate jul<14>2003 19:07 Mar 03, 2005 Jkt 205001 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 purpose of reducing the charge for P Orders from $.45 to $.15 is to encourage additional order flow to the Exchange and remain competitive. The purpose of adopting a $.15 fee for P/A Orders is to raise revenue for the Exchange. The Exchange notes that other exchanges that are participants in the Plan (‘‘Participants’’) also charge fees for P and P/A Orders.8 The Exchange specifically requests that the Commission approve the proposal such that it would apply to transactions that settle on or after February 1, 2005. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act 9 in general, and furthers the objectives of Section 6(b)(4) of the Act 10 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 Written comments on the proposed rule change were neither solicited nor received. III. 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: 8 See e.g., Securities Exchange Act Release Nos. 50124 (July 30, 2004), 69 FR 47963 (August 6, 2004) (SR–BSE–2004–32); 50010 (July 13, 2004), 69 FR 43649 (July 21, 2004) (SR–ISE–2004–25); 50048 (July 20, 2004), 69 FR 45102 (July 28, 2004) (SR– CBOE–2004–40); 50082 (July 26, 2004), 69 FR 45875 (July 30, 2004) (SR–PCX–2004–68); and 50116 (July 29, 2004), 69 FR 47473 (August 5, 2004) (SR–Amex–2004–54). 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(4). PO 00000 Frm 00147 Fmt 4703 Sfmt 4703 10737 Electronic Comments • 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–2005–10 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–2005–10. 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 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 publicly available. All submissions should refer to File Number SR–Phlx–2005–10 and should be submitted on or before March 25, 2005. IV. Commission’s Findings and Order Granting Accelerated Approval of Proposed Rule Change After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder, applicable to a national securities exchange,11 and, in particular, the requirements of Section 6(b) of the Act 12 and the rules 11 In approving this proposal, the Commission notes that it has considered the proposal’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 12 15 U.S.C. 78f(b). E:\FR\FM\04MRN1.SGM 04MRN1 10738 Federal Register / Vol. 70, No. 42 / Friday, March 4, 2005 / Notices and regulations thereunder. The Commission finds that the proposed rule change is consistent with Section 6(b)(4) of the Act,13 which requires that the rules of the Exchange provide for the equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. The Commission believes that lowering the fee for inbound P Orders retroactively to transactions that settled on or after February 1, 2005 should reduce a financial disincentive to send P Orders to the Phlx. The Commission also believes that implementing a fee for inbound P/A Orders is consistent with the practices of the other Participants. The Commission believes that approving the proposed rule change, as amended, on a pilot basis, until July 31, 2005, will give the Exchange and the Commission further opportunity to evaluate whether Linkage fee are appropriate. The Commission believes that the proposed rule change, as amended, is generally consistent with the practices of other Participants and presents no new regulatory issues. Accordingly, the Commission finds good cause pursuant to Section 19(b)(2) of the Act,14 for approving this proposed rule change, as amended, prior to the thirtieth day after publication of notice thereof in the Federal Register. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,15 that the proposed rule change (SR–Phlx–2005– 10), as amended, is hereby approved on an accelerated basis for a pilot period to expire on July 31, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.16 Margaret H. McFarland, Deputy Secretary. [FR Doc. E5–878 Filed 3–3–05; 8:45 am] BILLING CODE 8010–01–P 13 15 U.S.C. 78f(b)(4). U.S.C. 78s(b)(2). 15 15 U.S.C. 78s(b)(2). 16 17 CFR 200.30–3(a)(12). 14 15 VerDate jul<14>2003 19:07 Mar 03, 2005 Jkt 205001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–51272; File No. SR–Phlx– 2004–75] Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the Philadelphia Stock Exchange, Inc. Relating to Floor Official Conflicts of Interest on a case-by-case basis, in determining the eligibility or ineligibility of a particular Floor Official to participate in a particular ruling due to a conflict of interest. * * * * * F–27 Floor Official Rulings—Options Floor Officials are empowered to render rulings on the trading floor to resolve trading disputes occurring on February 28, 2005. and respecting activities on the trading Pursuant to Section 19(b)(1) of the floor. All rulings rendered by Floor Securities Exchange Act of 1934 Officials are effective immediately and (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 must be complied with promptly. notice is hereby given that on November Failure to promptly comply with a 9, 2004, the Philadelphia Stock ruling concerning a trading dispute may Exchange, Inc. (‘‘Phlx’’ or the result in referral to the Business ‘‘Exchange’’) filed with the Securities Conduct Committee. Failure to and Exchange Commission (‘‘SEC’’ or promptly comply with other rulings ‘‘Commission’’) the proposed rule issued pursuant to Order and Decorum change as described in Items I, II, and Regulations or Floor Procedure Advices and not concerning a trading dispute III below, which Items have been may result in an additional violation. prepared by the Phlx. The Commission Floor Officials need not render is publishing this notice to solicit decisions in any instance where the comments on the proposed rule change request for a ruling was not made within from interested persons. a reasonable period of time. A Floor I. Self-Regulatory Organization’s Official should not render a decision or Statement of the Terms of Substance of authorize a citation where such Floor the Proposed Rule Change Official was involved in or affected by The Phlx proposes to amend the dispute, as well as in any situation Exchange Rule 124, Disputes, and where the Floor Official is not able to Option Floor Procedure Advices–27, objectively and fairly render a decision. Floor Official Rulings—Options (‘‘OFPA Floor Officials shall endeavor to be prompt in rendering decisions. F–27’’), to authorize Exchange staff to However, in any instance where a Floor determine that a Floor Official is Official has determined that the benefits ineligible to participate in a particular of further discovery as to the facts and ruling where it appears that such Floor circumstances of any matter under Official has a conflict of interest. Below is the amended text of the review outweigh the monetary risks of proposed rule change. Proposed new a delayed rulings, the Floor Official may language is in italics. determine to delay rendering the ruling until such time as that further discovery * * * * * is completed. In issuing decisions for Disputes the resolution of trading disputes, Floor Officials shall institute the course of Rule 124. (a)–(d) * * * No change. Commentary: action deemed by the ruling Floor .01. Exchange staff may determine Official to be more fair to all parties that a Floor Official is ineligible to under the circumstances at the time. A participate in a particular ruling where Floor Official may direct the execution it appears that such Floor Official has of an order on the floor, to adjust the a conflict of interest. For purposes of transaction terms or participants to an this Rule, and without limitation, a executed order on the floor. However, conflict of interest exists where a Floor two Floor Officials may nullify a Official: (a) is directly or indirectly transaction if they determine the affiliated with a party seeking a Floor transaction to have been in violation of Official ruling; (b) is a participant or is Rules 1014 (Obligations and Restrictions directly or indirectly affiliated with a Applicable to specialist and ROTs), participant in a transaction that is the 1015 (Quotation Guarantees), 1017 (Priority and Parity at Openings in subject of a Floor Official ruling; (c) is Options), 1033 (Bids and Offers) or 1080 a debtor or creditor of a party seeking (AUTOM). a Floor Official ruling; or (d) is an A minimum of three members of the immediate family member of a party seeking a Floor Official ruling. Exchange Sub-Committee on Rules and Rulings, a staff may consider other circumstances, sub-committee of the standing committee, or the Chairperson of the 1 15 U.S.C. 78s(b)(1). standing committee (or his designee) if 2 17 CFR 240.19b–4. three Sub-Committee members cannot PO 00000 Frm 00148 Fmt 4703 Sfmt 4703 E:\FR\FM\04MRN1.SGM 04MRN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 70, Number 42 (Friday, March 4, 2005)]
[Notices]
[Pages 10736-10738]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-878]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51257; File No. SR-Phlx-2005-10]


Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing and Order Granting Accelerated Approval to a Proposed 
Rule Change and Amendment No. 1 Thereto Relating to Fees Applicable to 
Linkage P and P/A Orders

February 25, 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 January 28, 2005, 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 and 
II below, which Items have been prepared by the Exchange. On February 
16, 2005, 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 and is 
granting accelerated approval of the proposed rule change, as amended, 
on a pilot basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Form 19b-4 dated February 16, 2005 (``Amendment No. 
1''). Amendment No. 1 replaced and superseded the original filing in 
its entirety.
---------------------------------------------------------------------------

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

    The Exchange proposes to amend its schedule of fees to: (1) Reduce 
from $.45 per contract to $.15 per contract the Exchange's equity 
option transaction charge \4\ applicable to Principal Orders

[[Page 10737]]

(``P Orders'') sent to the Exchange via the Intermarket Options Linkage 
(``Linkage'') pursuant to the Plan for the Purpose of Creating and 
Operating an Intermarket Option Linkage (``Plan''); \5\ and (2) adopt a 
$.15 per contract equity option transaction charge for Linkage 
Principal Acting as Agent Orders (``P/A Orders'').\6\
---------------------------------------------------------------------------

    \4\ The equity option transaction charge would apply to equity 
options and to options overlying Exchange-Traded Fund Shares.
    \5\ See Securities Exchange Act Release Nos. 43086 (July 28, 
2000), 65 FR 48023 (August 4, 2000); (order approving the Plan); and 
43573 (November 16, 2000), 65 FR 70851 (November 28, 2000) (order 
approving Phlx as a participant in the Plan).
    \6\ Under Section 2(16) of the Plan and Exchange Rule 1083(k), a 
``Linkage Order'' means an Immediate or Cancel order routed through 
the Linkage as permitted under the Plan. There are three types of 
Linkage Orders:
    (i) ``Principal Acting as Agent Order,'' which is an order for 
the principal account of a specialist (or equivalent entity on 
another Participant Exchange that is authorized to represent Public 
Customer orders), reflecting the terms of a related unexecuted 
Public Customer order for which the specialist is acting as agent;
    (ii) ``Principal Order,'' which is an order for the principal 
account of an Eligible Market Maker and is not a P/A Order; and
    (iii) ``Satisfaction Order,'' which is an order sent through the 
Linkage to notify a member of another Participant Exchange of a 
Trade-Through and to seek satisfaction of the liability arising from 
that Trade-Through.
---------------------------------------------------------------------------

    The Exchange would charge the clearing member firm of the sender of 
inbound Linkage P and P/A Orders. Consistent with current practice and 
with the Plan, the Exchange would not charge for the execution of 
Satisfaction Orders sent through Linkage.
    The Exchange intends to incorporate this new fee structure as part 
of an existing pilot program, which is scheduled to expire July 31, 
2005.\7\
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 50125 (July 30, 
2004), 69 FR 47479 (August 5, 2004) (SR-Phlx-2004-44). In that 
filing, the Exchange established, on a pilot basis, a fee of $.45 
per contract for inbound P Orders. The instant proposed rule change 
would reduce the fee for inbound P Orders from $.45 per contract to 
$.15 per contract, and would establish, as part of the pilot, a fee 
of $.15 per contract for inbound P/A Orders.
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Phlx's Web 
site (https://www.phlx.com), at the Phlx's Office of the Secretary, and 
at the Commission's Public Reference Room.

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 had received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item III 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
    The purpose of reducing the charge for P Orders from $.45 to $.15 
is to encourage additional order flow to the Exchange and remain 
competitive. The purpose of adopting a $.15 fee for P/A Orders is to 
raise revenue for the Exchange. The Exchange notes that other exchanges 
that are participants in the Plan (``Participants'') also charge fees 
for P and P/A Orders.\8\
---------------------------------------------------------------------------

    \8\ See e.g., Securities Exchange Act Release Nos. 50124 (July 
30, 2004), 69 FR 47963 (August 6, 2004) (SR-BSE-2004-32); 50010 
(July 13, 2004), 69 FR 43649 (July 21, 2004) (SR-ISE-2004-25); 50048 
(July 20, 2004), 69 FR 45102 (July 28, 2004) (SR-CBOE-2004-40); 
50082 (July 26, 2004), 69 FR 45875 (July 30, 2004) (SR-PCX-2004-68); 
and 50116 (July 29, 2004), 69 FR 47473 (August 5, 2004) (SR-Amex-
2004-54).
---------------------------------------------------------------------------

    The Exchange specifically requests that the Commission approve the 
proposal such that it would apply to transactions that settle on or 
after February 1, 2005.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \9\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act \10\ in particular, in that it 
is an equitable allocation of reasonable fees among Exchange members.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 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

    Written comments on the proposed rule change were neither solicited 
nor received.

III. 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-2005-10 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-2005-10. 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 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 publicly available. All submissions should refer to 
File Number SR-Phlx-2005-10 and should be submitted on or before March 
25, 2005.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of the Act and the 
rules and regulations thereunder, applicable to a national securities 
exchange,\11\ and, in particular, the requirements of Section 6(b) of 
the Act \12\ and the rules

[[Page 10738]]

and regulations thereunder. The Commission finds that the proposed rule 
change is consistent with Section 6(b)(4) of the Act,\13\ which 
requires that the rules of the Exchange provide for the equitable 
allocation of reasonable dues, fees and other charges among its members 
and other persons using its facilities. The Commission believes that 
lowering the fee for inbound P Orders retroactively to transactions 
that settled on or after February 1, 2005 should reduce a financial 
disincentive to send P Orders to the Phlx. The Commission also believes 
that implementing a fee for inbound P/A Orders is consistent with the 
practices of the other Participants. The Commission believes that 
approving the proposed rule change, as amended, on a pilot basis, until 
July 31, 2005, will give the Exchange and the Commission further 
opportunity to evaluate whether Linkage fee are appropriate.
---------------------------------------------------------------------------

    \11\ In approving this proposal, the Commission notes that it 
has considered the proposal's impact on efficiency, competition, and 
capital formation. 15 U.S.C. 78c(f).
    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Commission believes that the proposed rule change, as amended, 
is generally consistent with the practices of other Participants and 
presents no new regulatory issues. Accordingly, the Commission finds 
good cause pursuant to Section 19(b)(2) of the Act,\14\ for approving 
this proposed rule change, as amended, prior to the thirtieth day after 
publication of notice thereof in the Federal Register.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\15\ that the proposed rule change (SR-Phlx-2005-10), as amended, 
is hereby approved on an accelerated basis for a pilot period to expire 
on July 31, 2005.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-878 Filed 3-3-05; 8:45 am]
BILLING CODE 8010-01-P

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