Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to Streaming Quote Trader Fees, 17495-17498 [E5-1553]
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Federal Register / Vol. 70, No. 65 / Wednesday, April 6, 2005 / Notices
to its members to direct losses caused by
NSCC’s gross negligence, willful
misconduct, or violation of Federal
securities laws for which there is a
private right of action would: (1)
Memorialize an appropriate commercial
standard of care that will protect NSCC
from undue liability; 8 (2) permit the
resources of NSCC to be appropriately
utilized for promoting the accurate
clearance and settlement of securities;
and (3) would be consistent with similar
rules adopted by other self-regulatory
organizations and approved by the
Commission.9
NSCC believes that the proposed rule
change is consistent with the
requirements of Section 17A of the
Act 10 and the rules and regulations
thereunder applicable to NSCC because
it will permit the resources of NSCC to
be appropriately utilized for promoting
the accurate clearance and settlement of
securities.
(B) Self-Regulatory Organization’s
Statement on Burden on Competition
NSCC does not believe that the
proposed rule change will impose a
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Act.
Settling Member, Data Services Only Member, TPA
Member, TPA Settling Entity, Mutual Fund
Processor or Fund Member through Fund/Serv, nor
for any errors, omissions or delays which may occur
in the transmission of a transaction or instruction
to or from a Settling Member, Data Services Only
Member, TPA Member, TPA Settling Entity, Mutual
Fund Processor or Fund Member.
(f) The Corporation will not be responsible for the
completeness or accuracy of any IPS Data and
Repository Data received from or transmitted to an
Insurance Carrier Member, Member or Data Services
Only Member through IPS nor for any errors,
omissions or delays which may occur in the
transmission of such IPS Data and Repository Data
to or from an Insurance Carrier Member, or Data
Services Only Member.
8 NSCC has always operated under a gross
negligence standard of care and both internal and
external counsel have consistently advised
members that this is the case. NSCC is seeking to
eliminate any confusion due to the absence of a
clear standard set forth in its rules and to
memorialize its historical practice. In addition,
NSCC has in effect a service agreement with the
Fixed Income Clearing Corporation (‘‘FICC’’)
pursuant to which FICC provides services for
NSCC’s fixed income products. This service
agreement provides for a gross negligence standard
of care. In the absence of this proposed rule, NSCC
could be in the position of having to pay for losses
caused by FICC that are not recoverable under the
agreement.
9 See, e.g., Securities Exchange Act Release Nos.
37421 (July 11, 1996), 61 FR 37513 [File No. SR–
CBOE–96–02]; 37563 (August 14, 1996), 61 FR
43285 [File No. SR–PSE–96–21]; 48201 (July 21,
2003), 68 FR 44128 [File No. SR–GSCC–2002–10];
and 49373 (March 8, 2004), 69 FR 11921 [File No.
SR–FICC–2003–09].
10 15 U.S.C. 78q–1.
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(C) Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
NSCC has not solicited or received
any written comments on this proposal.
NSCC will notify the Commission of any
written comments it receives.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within thirty-five days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
ninety days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve such proposed
rule change or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
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 rulecomments@sec.gov. Please include File
Number SR–NSCC–2004–09 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–NSCC–2004–09. 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
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17495
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
Section, 450 Fifth Street, NW.,
Washington, DC 20549. Copies of such
filing also will be available for
inspection and copying at the principal
office of NSCC and on NSCC’s Web site
at https://www.nscc.com/legal. 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–NSCC–2004–09 and should
be submitted on or before April 26,
2005.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.11
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–1566 Filed 4–5–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51453; File No. SR–Phlx–
2005–16]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change and Amendment No. 1 Thereto
Relating to Streaming Quote Trader
Fees
March 30, 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 February
28, 2005, the Philadelphia Stock
Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’)
submitted to 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 Phlx. On
March 30, 2005, Phlx filed Amendment
No. 1 to the proposed rule change.3 The
Exchange filed the proposed rule change
pursuant to section 19(b)(3)(A) of the
11 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Amendment No. 1 clarified the proposed SQT
fees in response to comments received from
Commission staff.
1 15
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Federal Register / Vol. 70, No. 65 / Wednesday, April 6, 2005 / Notices
Act 4 which renders it effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change, as amended, 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 adopt a fee schedule for
Streaming Quote Traders (‘‘SQTs’’).5
The complete text of the proposed rule
change is available on Phlx’s Web site
(https://www.phlx.com), at the Phlx’s
principal office, and at the
Commission’s Public Reference Room.
SQT fees and credits would apply as
follows: 6
Category I ..........................................................................................................................................................
SQT is eligible to trade: 6
• Up to 200 equity and index options issues.
• Not eligible for a permit credit.
Category II .........................................................................................................................................................
SQT is eligible to trade:
• Up to 400 equity and index options issues.
• Maximum permit credit is $2200.00 per calendar month.
Category III .......................................................................................................................................................
SQT is eligible to trade:
• Up to 600 equity and index options issues.
• Maximum permit credit is $3200.00 per calendar month.
Category IV .......................................................................................................................................................
SQT is eligible to trade:
• Up to 800 equity and index options issues.
• Maximum permit credit is $4200.00 per calendar month.
Category V ........................................................................................................................................................
SQT is eligible to trade:
• Up to 1000 equity and index options issues.
• Maximum permit credit is $5200.00 per calendar month.
Category VI .......................................................................................................................................................
SQT is eligible to trade:
• Up to 1200 equity and index options issues.
• Maximum permit credit is $6200.00 per calendar month.
Category VII ......................................................................................................................................................
SQT is eligible to trade:
• All listed equity and index options.
• Maximum permit credit is $7200.00 per calendar month.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Phlx 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.
1. Purpose
4 15
U.S.C. 78s(b)(3)(A).
SQT is a Registered Options Trader (‘‘ROT’’)
who has received permission from the Exchange to
generate and submit option quotations
electronically through an electronic interface with
the Exchange’s automated options market
(‘‘AUTOM’’) via an Exchange approved proprietary
electronic quoting device in eligible options to
which the SQT is assigned. See Exchange Rule
1014(b)(ii). In July 2004, the Exchange began
trading equity options on Phlx XL, the Exchange’s
electronic trading platform for options, followed by
index options in December 2004.
5A
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The Exchange proposes to adopt a fee
schedule for SQTs in order to provide
competitive fees for SQTs. The
Exchange believes that the proposed
SQT fee schedule creates an incentive
for SQTs to remain on the Exchange’s
options floor, thereby providing the
necessary liquidity for floor-brokered
orders traded in-crowd. Currently, all
Phlx listed equity options and index
options trade on Phlx XL, and SQTs
have had the opportunity to acclimate
themselves to the electronic trading
environment. Thus, the Exchange
6 A member organization will be assessed an SQT
fee based on the aggregate amount of equity options
and index options traded by the SQTs in that
member organization.
7 The amount of the credit is based on $1200 for
the first ROT (acting as a SQT) permit and $1000
for each additional ROT (acting as a SQT) permit,
subject to the maximum permit credit allowed for
each category. For example, if a member
organization is assessed a monthly Category II SQT
fee of $2200.00 per calendar month, that member
organization would be eligible to receive a permit
credit against the $2200.00 SQT fee depending on
the number of permits held by ROTs acting as SQTs
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No Charge.
$2200.00 per calendar month.
$3200.00 per calendar month.
$4200.00 per calendar month.
$5200.00 per calendar month.
$6200.00 per calendar month.
$7200.00 per calendar month.
believes that it is now appropriate to
assess the proposed SQT fees.
Each member organization will be
assessed per month a SQT fee based on
the total number of options in which all
SQTs in the same member organization
are assigned. A member organization
will be assessed a SQT fee based on the
aggregate amount of equity options and
index options traded by the SQTs in
that member organization. However,
credits may be earned to offset the
amount of the SQT fee assessed on the
member organization. The amount of
credit that can be earned by each
member organization on a monthly basis
is based on the number of permit
holders, who are also SQTs, per member
organization, subject to a maximum
allowable permit credit applicable to
each SQT category.7 Thus, the member
within that member organization. Thus, if the
member organization only had one SQT, it would
receive a credit of $1200 per calendar month and
would be assessed a reduced SQT fee of $1000.00
for that calendar month. However, if the member
organization had two SQTs within its organization,
it would receive a total credit of $2200.00 per
calendar month ($1200 for the first ROT acting as
a SQT and $1000 for the second ROT acting as a
SQT) and would be charged a reduced SQT fee of
$0.00 for that calendar month. A member
organization may receive credit only for an ROT
permit fee when such ROT is acting as a SQT
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Federal Register / Vol. 70, No. 65 / Wednesday, April 6, 2005 / Notices
organization will be eligible to receive
credit against the SQT fee for the
number of actual permits issued to the
member organization that are utilized by
an SQT, resulting in a reduced SQT fee.
The proposed SQT fees and
corresponding credits will be assessed
on a monthly basis. The highest
applicable SQT fee will be assessed
based on the highest SQT category level
in which the SQT was qualified at any
time during a particular calendar
month. For example, if a SQT is eligible
to trade at any time in a given calendar
month as a Category I SQT, and
sometime during that same calendar
month becomes qualified and eligible to
trade as a Category II SQT, the SQT
member organization will be assessed
the fee applicable to a Category II SQT,
regardless of when such SQT became
eligible to trade at the Category II level,
and regardless if, during that same
calendar month, the SQT resumed
eligibility as a Category I SQT.8
SQTs are assigned to trade options by
the Exchange’s Options Allocation,
Evaluation, and Securities Committee
(‘‘OAESC’’).9 Once assigned in an
option by the OAESC, the Exchange’s
Financial Automation Department 10
activates the connections necessary for
access to the Exchange’s systems
respecting the option symbol(s) assigned
to the SQT. Thus, a SQT could not trade
options in which it is not assigned, and
could not thereby function as a SQT in
because the Exchange has determined, based on
current permit statistics, that member organizations
with ROT permits do not apply for other types of
permits, unlike the Remote Streaming Quote Trader
(‘‘RSQT’’) fee and corresponding credit. See
Securities Exchange Act Release No. 51428 (March
24, 2005), 70 FR 16325 (March 30, 2005) (SR–Phlx–
2005–12).
8 For example, if a member organization’s SQT is
eligible to trade up to 200 equity and index options
issues at any time in a given month, and is thus
qualified as a Category I SQT, and sometime during
that month becomes eligible to trade up to 400
equity and index options issues during that same
month, and is thus qualified as a Category II SQT,
the member organization employing that SQT will
be assessed the fee applicable to a Category II SQT,
regardless of when, during that month, the SQT
became eligible to trade at the Category II level.
9 See Exchange Rule 507. The OAESC has
jurisdiction over the allocation, retention and
transfer of the privileges to deal in all options to,
by and among members on the options and foreign
currency options trading floors. See Exchange ByLaw Article X, Section 10–7.
10 The Exchange’s Financial Automation
Department is responsible for the design,
development, implementation, testing and
maintenance of the Exchange’s automated trading
systems, surveillance systems, and back office
systems, and for monitoring the quality of
performance and operational readiness of such
systems, in addition to user training and validation
of user technology as it pertains to such users’
interfacing with the Exchange’s systems.
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18:17 Apr 05, 2005
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a higher category level without being
assessed the appropriate SQT fee.
All other applicable Exchange fees
will continue to apply, such as
transaction and comparison charges.
The proposed SQT fees are scheduled to
become effective for transactions
settling on or after March 1, 2005.
The Exchange is also proposing to
make minor technical changes to
renumber certain footnotes. The
purpose of renumbering the footnotes is
to update the fee schedule to reflect
certain footnotes that were recently
added to the exchange’s fee schedule.
2. Statutory Basis
The Exchange believes that its
proposal to amend its schedule of fees
is consistent with 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 provides for the
equitable allocation of reasonable fees
among its members. The proposed SQT
fees are lower than RSQT fees 13 because
SQTs have more out-of-pocket costs
associated with their streaming quote
systems. For example, SQTs generally
have to purchase additional software
programs and hardware from outside
vendors to support their streaming
quote systems, in addition to incurring
additional costs associated with market
data (known as Hyperfeed) to enable
them to price options within their
particular options pricing model.
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.
U.S.C. 78f.
U.S.C. 78f(b)(4).
13 A RSQT is an Exchange ROT that is a member
or member organization of the Exchange with no
physical trading floor presence who has received
permission from the Exchange to generate and
submit option quotations electronically through
AUTOM in eligible options to which such RSQT
has been assigned. A RSQT may only submit such
quotations electronically from off the floor of the
Exchange. A RSQT may only trade in a market
making capacity in classes of options in which he
is assigned. See Exchange Rule 1014(b)(ii)(B). See
Securities Exchange Act Release Nos. 51126
(February 2, 2005), 70 FR 6915 (February 9, 2005)
(SR–Phlx–2004–90) and 51428 (March 24, 2005), 70
FR 16325 (March 30, 2005) (SR–Phlx–2005–12).
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11 15
12 15
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17497
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 14 and subparagraph (f)(2) of Rule
19b–4 thereunder.15 Accordingly, the
proposal will take effect upon filing
with the Commission. At any time
within 60 days of the filing of such 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
purpose of the Act.16
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as amended, 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 rulecomments@sec.gov. Please include File
Number SR–Phlx–2005–16 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–2005–16. 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
14 15
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
16 For purposes of calculating the 60-day
abrogation period, the Commission considers the
proposal to have been filed on March 30, 2005, the
date the Phlx filed Amendment No. 1.
15 17
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Federal Register / Vol. 70, No. 65 / Wednesday, April 6, 2005 / Notices
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–2005–16 and should
be submitted on or before April 27,
2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.17
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–1553 Filed 4–5–05; 8:45 am]
BILLING CODE 8010–01–P
DEPARTMENT OF STATE
[Public Notice 5039]
60-Day Notice of Proposed Information
Collection: Form DS–3053, Statement
of Consent or Special Circumstances:
Issuance of a Passport to a Minor
Under Age 14, OMB Control Number
1405–0129
Notice of request for public
comments.
ACTION:
SUMMARY: The Department of State is
seeking Office of Management and
Budget (OMB) approval for the
information collection described below.
The purpose of this notice is to allow 60
days for public comment in the Federal
Register preceding submission to OMB.
We are conducting this process in
accordance with the Paperwork
Reduction Act of 1995.
Title of Information Collection:
Statement of Consent or Special
Circumstances: Issuance of a Passport to
a Minor Under Age 14.
OMB Control Number: 1405–0129.
Type of Request: Revision of a
currently approved collection.
Originating Office: Bureau of Consular
Affairs, Department of State, Passport
Services, Office of Field Operations,
Field Coordination Division. CA/PPT/
FO/FC.
Form Number: DS–3053.
Respondents: Individuals or
Households.
Estimated Number of Respondents:
525,000 annually.
17 17
CFR 200.30–3(a)(12).
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18:17 Apr 05, 2005
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Estimated Number of Responses:
525,000 annually.
Average Hours Per Response: 1 hour.
Total Estimated Burden: 525,000
hours annually.
Frequency: On occasion.
Obligation to Respond: Required to
Obtain a Benefit.
DATES: The Department will accept
comments from the public up to 60 days
from April 6, 2005.
ADDRESSES: You may submit comments
by any of the following methods:
E-mail: Cowlishawsc@state.gov. You
must include the DS form number (if
applicable), information collection title,
and OMB control number in the subject
line of your message.
Mail (paper, disk, or CD–ROM
submissions): Susan Cowlishaw, US
Department of State, CA/PPT/FO/FC,
2100 Pennsylvania Avenue, NW, 3rd
Floor/Room 3040/SA–29, Washington
DC 20037.
FOR FURTHER INFORMATION CONTACT:
Direct requests for additional
information regarding the collection
listed in this notice, including requests
for copies of the proposed information
collection and supporting documents, to
Susan Cowlishaw, U.S. Department of
State, CA/PPT/FO/FC, 2100
Pennsylvania Avenue, NW., 3rd Floor/
Room 3040/ SA–29, Washington DC
20037, who may be reached on 202–
261–8957 or Cowlishawsc@state.gov.
SUPPLEMENTARY INFORMATION: We are
soliciting public comments to permit
the Department to:
• Evaluate whether the proposed
information collection is necessary for
the proper performance of our
functions.
• Evaluate the accuracy of our
estimate of the burden of the proposed
collection, including the validity of the
methodology and assumptions used.
• Enhance the quality, utility, and
clarity of the information to be
collected.
• Minimize the reporting burden on
those who are to respond, including the
use of automated collection techniques
or other forms of technology.
Abstract of proposed collection: The
Statement of Consent or Special
Circumstances: Issuance of a Passport to
a Minor Under Age 14 is used by the
parent(s) or legal guardian(s) of a minor
U.S. citizen or non-citizen national
under the age of 14 to document the
written notarized consent to issuance of
a U.S. passport to the minor of a parent
or legal guardian who is not present at
the time the application is made, or to
document the existence of exigent or
special family circumstances. This form
is used in conjunction with Form DS–
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Fmt 4703
Sfmt 4703
11, Application for a U.S. Passport or
Registration.
Methodology: Passport Services
collects the information from U.S.
citizens or non-citizen nationals when
they voluntarily complete and submit
the Statement of Consent or Special
Circumstances: Issuance of a Passport to
a Minor Under Age 14. Passport
applicants can either download the form
from the Internet or pick one up from
an Acceptance Facility/Passport
Agency. The form must be completed
and then signed in the presence of a
notary. The notary will complete his/her
portion of the form and affix the notary
seal. The form is then submitted along
with the Form DS–11 Application for a
U.S. Passport.
Dated: February 16, 2005.
Frank Moss,
Deputy Assistant Secretary for Passport
Services, Bureau of Consular Affairs,
Department of State.
[FR Doc. 05–6936 Filed 4–5–05; 8:45 am]
BILLING CODE 4710–06–P
DEPARTMENT OF STATE
[Public Notice 5038]
Guidelines for the Exercise of the Law
Enforcement Authorities by Special
Agents of the Diplomatic Security
Service
SUMMARY: In accordance with section
202 (c) of the Foreign Relations
Authorization Act, Fiscal Year 2003,
which amended section 37 of the State
Department Basic Authorities Act (22
U.S.C. 2709), notice is hereby given that
pursuant to letters dated March 7, 2005,
the State Department advised
appropriate congressional committee
members that the Secretary of the
Department of Homeland Security and
the Attorney General approved the
Guidelines for the Exercise of Law
Enforcement Authorities by Special
Agents of the Diplomatic Security
Service. This new subsection of 22
U.S.C. 2709 expands authority for
special agents of the Department of State
and the Foreign Service to obtain and
execute subpoenas and arrest warrants
and to make arrests without warrant
subject to guidelines approved by the
Secretary of State, the Secretary of
Treasury (and now the Secretary of
Homeland Security per the Homeland
Security Act of 2002) and the Attorney
General. The approved set of guidelines
constitutes a statement of policy that
will govern such activities by special
agents of the Bureau of Diplomatic
Security to the United States pursuant
to 22 U.S.C. 2709.
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]]>Agencies
[Federal Register Volume 70, Number 65 (Wednesday, April 6, 2005)]
[Notices]
[Pages 17495-17498]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-1553]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51453; File No. SR-Phlx-2005-16]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
and Amendment No. 1 Thereto Relating to Streaming Quote Trader Fees
March 30, 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 February 28, 2005, the Philadelphia Stock Exchange, Inc. (``Phlx''
or ``Exchange'') submitted to 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 Phlx. On March 30,
2005, Phlx filed Amendment No. 1 to the proposed rule change.\3\ The
Exchange filed the proposed rule change pursuant to section 19(b)(3)(A)
of the
[[Page 17496]]
Act \4\ which renders it effective upon filing with the Commission. The
Commission is publishing this notice to solicit comments on the
proposed rule change, as amended, from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 clarified the proposed SQT fees in response
to comments received from Commission staff.
\4\ 15 U.S.C. 78s(b)(3)(A).
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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 adopt a fee schedule
for Streaming Quote Traders (``SQTs'').\5\ The complete text of the
proposed rule change is available on Phlx's Web site (https://
www.phlx.com), at the Phlx's principal office, and at the Commission's
Public Reference Room.
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\5\ A SQT is a Registered Options Trader (``ROT'') who has
received permission from the Exchange to generate and submit option
quotations electronically through an electronic interface with the
Exchange's automated options market (``AUTOM'') via an Exchange
approved proprietary electronic quoting device in eligible options
to which the SQT is assigned. See Exchange Rule 1014(b)(ii). In July
2004, the Exchange began trading equity options on Phlx XL, the
Exchange's electronic trading platform for options, followed by
index options in December 2004.
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SQT fees and credits would apply as follows: \6\
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\6\ A member organization will be assessed an SQT fee based on
the aggregate amount of equity options and index options traded by
the SQTs in that member organization.
Category I...................................... No Charge.
SQT is eligible to trade: \6\
Up to 200 equity and index
options issues.
Not eligible for a permit
credit.
Category II..................................... $2200.00 per calendar month.
SQT is eligible to trade:
Up to 400 equity and index
options issues.
Maximum permit credit is
$2200.00 per calendar month.
Category III.................................... $3200.00 per calendar month.
SQT is eligible to trade:
Up to 600 equity and index
options issues.
Maximum permit credit is
$3200.00 per calendar month.
Category IV..................................... $4200.00 per calendar month.
SQT is eligible to trade:
Up to 800 equity and index
options issues.
Maximum permit credit is
$4200.00 per calendar month.
Category V...................................... $5200.00 per calendar month.
SQT is eligible to trade:
Up to 1000 equity and index
options issues.
Maximum permit credit is
$5200.00 per calendar month.
Category VI..................................... $6200.00 per calendar month.
SQT is eligible to trade:
Up to 1200 equity and index
options issues.
Maximum permit credit is
$6200.00 per calendar month.
Category VII.................................... $7200.00 per calendar month.
SQT is eligible to trade:
All listed equity and index
options.
Maximum permit credit is
$7200.00 per calendar month.
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 Phlx included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to adopt a fee schedule for SQTs in order to
provide competitive fees for SQTs. The Exchange believes that the
proposed SQT fee schedule creates an incentive for SQTs to remain on
the Exchange's options floor, thereby providing the necessary liquidity
for floor-brokered orders traded in-crowd. Currently, all Phlx listed
equity options and index options trade on Phlx XL, and SQTs have had
the opportunity to acclimate themselves to the electronic trading
environment. Thus, the Exchange believes that it is now appropriate to
assess the proposed SQT fees.
Each member organization will be assessed per month a SQT fee based
on the total number of options in which all SQTs in the same member
organization are assigned. A member organization will be assessed a SQT
fee based on the aggregate amount of equity options and index options
traded by the SQTs in that member organization. However, credits may be
earned to offset the amount of the SQT fee assessed on the member
organization. The amount of credit that can be earned by each member
organization on a monthly basis is based on the number of permit
holders, who are also SQTs, per member organization, subject to a
maximum allowable permit credit applicable to each SQT category.\7\
Thus, the member
[[Page 17497]]
organization will be eligible to receive credit against the SQT fee for
the number of actual permits issued to the member organization that are
utilized by an SQT, resulting in a reduced SQT fee.
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\7\ The amount of the credit is based on $1200 for the first ROT
(acting as a SQT) permit and $1000 for each additional ROT (acting
as a SQT) permit, subject to the maximum permit credit allowed for
each category. For example, if a member organization is assessed a
monthly Category II SQT fee of $2200.00 per calendar month, that
member organization would be eligible to receive a permit credit
against the $2200.00 SQT fee depending on the number of permits held
by ROTs acting as SQTs within that member organization. Thus, if the
member organization only had one SQT, it would receive a credit of
$1200 per calendar month and would be assessed a reduced SQT fee of
$1000.00 for that calendar month. However, if the member
organization had two SQTs within its organization, it would receive
a total credit of $2200.00 per calendar month ($1200 for the first
ROT acting as a SQT and $1000 for the second ROT acting as a SQT)
and would be charged a reduced SQT fee of $0.00 for that calendar
month. A member organization may receive credit only for an ROT
permit fee when such ROT is acting as a SQT because the Exchange has
determined, based on current permit statistics, that member
organizations with ROT permits do not apply for other types of
permits, unlike the Remote Streaming Quote Trader (``RSQT'') fee and
corresponding credit. See Securities Exchange Act Release No. 51428
(March 24, 2005), 70 FR 16325 (March 30, 2005) (SR-Phlx-2005-12).
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The proposed SQT fees and corresponding credits will be assessed on
a monthly basis. The highest applicable SQT fee will be assessed based
on the highest SQT category level in which the SQT was qualified at any
time during a particular calendar month. For example, if a SQT is
eligible to trade at any time in a given calendar month as a Category I
SQT, and sometime during that same calendar month becomes qualified and
eligible to trade as a Category II SQT, the SQT member organization
will be assessed the fee applicable to a Category II SQT, regardless of
when such SQT became eligible to trade at the Category II level, and
regardless if, during that same calendar month, the SQT resumed
eligibility as a Category I SQT.\8\
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\8\ For example, if a member organization's SQT is eligible to
trade up to 200 equity and index options issues at any time in a
given month, and is thus qualified as a Category I SQT, and sometime
during that month becomes eligible to trade up to 400 equity and
index options issues during that same month, and is thus qualified
as a Category II SQT, the member organization employing that SQT
will be assessed the fee applicable to a Category II SQT, regardless
of when, during that month, the SQT became eligible to trade at the
Category II level.
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SQTs are assigned to trade options by the Exchange's Options
Allocation, Evaluation, and Securities Committee (``OAESC'').\9\ Once
assigned in an option by the OAESC, the Exchange's Financial Automation
Department \10\ activates the connections necessary for access to the
Exchange's systems respecting the option symbol(s) assigned to the SQT.
Thus, a SQT could not trade options in which it is not assigned, and
could not thereby function as a SQT in a higher category level without
being assessed the appropriate SQT fee.
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\9\ See Exchange Rule 507. The OAESC has jurisdiction over the
allocation, retention and transfer of the privileges to deal in all
options to, by and among members on the options and foreign currency
options trading floors. See Exchange By-Law Article X, Section 10-7.
\10\ The Exchange's Financial Automation Department is
responsible for the design, development, implementation, testing and
maintenance of the Exchange's automated trading systems,
surveillance systems, and back office systems, and for monitoring
the quality of performance and operational readiness of such
systems, in addition to user training and validation of user
technology as it pertains to such users' interfacing with the
Exchange's systems.
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All other applicable Exchange fees will continue to apply, such as
transaction and comparison charges. The proposed SQT fees are scheduled
to become effective for transactions settling on or after March 1,
2005.
The Exchange is also proposing to make minor technical changes to
renumber certain footnotes. The purpose of renumbering the footnotes is
to update the fee schedule to reflect certain footnotes that were
recently added to the exchange's fee schedule.
2. Statutory Basis
The Exchange believes that its proposal to amend its schedule of
fees is consistent with 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 provides for the equitable allocation of
reasonable fees among its members. The proposed SQT fees are lower than
RSQT fees \13\ because SQTs have more out-of-pocket costs associated
with their streaming quote systems. For example, SQTs generally have to
purchase additional software programs and hardware from outside vendors
to support their streaming quote systems, in addition to incurring
additional costs associated with market data (known as Hyperfeed) to
enable them to price options within their particular options pricing
model.
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\11\ 15 U.S.C. 78f.
\12\ 15 U.S.C. 78f(b)(4).
\13\ A RSQT is an Exchange ROT that is a member or member
organization of the Exchange with no physical trading floor presence
who has received permission from the Exchange to generate and submit
option quotations electronically through AUTOM in eligible options
to which such RSQT has been assigned. A RSQT may only submit such
quotations electronically from off the floor of the Exchange. A RSQT
may only trade in a market making capacity in classes of options in
which he is assigned. See Exchange Rule 1014(b)(ii)(B). See
Securities Exchange Act Release Nos. 51126 (February 2, 2005), 70 FR
6915 (February 9, 2005) (SR-Phlx-2004-90) and 51428 (March 24,
2005), 70 FR 16325 (March 30, 2005) (SR-Phlx-2005-12).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any 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 proposed rule change has been designated as a fee
change pursuant to section 19(b)(3)(A)(ii) of the Act \14\ and
subparagraph (f)(2) of Rule 19b-4 thereunder.\15\ Accordingly, the
proposal will take effect upon filing with the Commission. At any time
within 60 days of the filing of such 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
purpose of the Act.\16\
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\14\ 15 U.S.C. 78s(b)(3)(A)(ii).
\15\ 17 CFR 240.19b-4(f)(2).
\16\ For purposes of calculating the 60-day abrogation period,
the Commission considers the proposal to have been filed on March
30, 2005, the date the Phlx filed Amendment No. 1.
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, 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-2005-16 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-2005-16. 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
[[Page 17498]]
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-2005-16 and should be
submitted on or before April 27, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-1553 Filed 4-5-05; 8:45 am]
BILLING CODE 8010-01-P
