Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Implementation of a Cancellation Fee for Equities and ETFs, 58496-58498 [E5-5469]
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58496
Federal Register / Vol. 70, No. 193 / Thursday, October 6, 2005 / Notices
to its authorized Money Pool limit. The
Money Pool represents an economic
alternative for HWP’s short-term
funding needs. Applicants request an
increase in HWP’s Money Pool limit
from $10 million to $35 million.
NAESC, which seeks authority to
participate in the NU Money Pool,
formerly operated the Seabrook Nuclear
Station, which was sold in 2002.
NAESC currently retains cash against
certain future obligations, and
Applicants state that NU’s cash
management system will be enhanced
by the addition of NAESC to the NU
Money Pool on the terms and conditions
set forth in the 2004 Order.
NU states that at all times during the
Authorization Period it will maintain
common equity (as reflected in the most
recent Form 10–K or Form 10–Q filed
with the Commission) of at least 30% of
its consolidated capitalization (net of
securitization debt). The term
‘‘consolidated capitalization’’ is defined
to include, where applicable, common
stock equity (comprised of common
stock, additional paid in capital,
retained earnings, accumulated other
comprehensive income or loss, and/or
treasury stock), minority interest,
preferred stock, preferred securities,
equity linked securities, long-term debt,
short-term debt and current maturities
(net of securitization debt).
NU states that, as of June 30, 2005,
NU’s consolidated capitalization (net of
securitization debt) consisted of 38.6%
common equity, 2.1% preferred stock,
59.3% long-term and short-term debt.
When securitization debt (Rate
Reduction Bonds) is included, NU’s
consolidated capitalization as of June
30, 2005, was 30.5% common equity,
1.7% preferred stock and 46.8% debt,
21.0% Rate Reduction Bonds.
The proceeds from the issuance of
short-term debt as requested in this
Amendment will be used for (i) general
corporate purposes, including
investments by and capital expenditures
of NU and its subsidiaries, including,
without limitation, the funding of future
investments in exempt wholesale
generators (‘‘EWGs’’), foreign utility
companies (‘‘FUCOs’’) (each to the
extent permitted under the Act or
Commission order), energy-related
companies (‘‘Rule 58 Subsidiaries’’) to
the extent permitted under the Act or
Commission order, and exempt
telecommunications companies
(‘‘ETCs’’), (ii) the repayment,
redemption, refunding or purchase by
NU or any subsidiary of any of its own
securities from non-affiliates under rule
42, and (iii) financing working capital
requirements of NU and its subsidiaries.
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19:52 Oct 05, 2005
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For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. E5–5475 Filed 10–5–05; 8:45 am]
comments on the proposed rule change,
as amended, from interested parties.
BILLING CODE 8010–01–P
Amex proposes to establish a fee
based on the number of order
cancellations in equities, Exchange
Traded Fund Shares and Trust Issued
Receipts (hereinafter referred to as
‘‘equities and ETFs’’) routed through
Amex systems. Below is the text of the
proposed rule change, as amended.
Proposed new language is italicized;
proposed deletions are in [brackets].
*
*
*
*
*
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52533; File No. SR–Amex–
2005–085]
Self-Regulatory Organizations;
American Stock Exchange LLC; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change Relating to
the Implementation of a Cancellation
Fee for Equities and ETFs
September 29, 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
September 20, 2005, the American Stock
Exchange LLC (‘‘Amex’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II and III below, which Items
have been prepared by Amex. On
September 23, 2005, Amex filed
Amendment No. 1 to the proposed rule
change.3 On September 26, 2005, Amex
filed Amendment No. 2 to the proposed
rule change.4 Amex has designated this
proposal as one establishing or changing
a due, fee, or other charge imposed by
Amex under Section 19(b)(3)(A)(ii) of
the Act,5 and Rule 19b–4(f)(2)
thereunder,6 which renders the proposal
effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 In Amendment No. 1, the Exchange: (1) Clarified
that cancellations resulting from ‘‘Immediate or
Cancel’’ and ‘‘Fill or Kill’’ orders will not be
counted when determining the amount of the
cancellation fee to be charged to an executing
clearing member and updated the corresponding
proposed rule text; and (2) stated that Amex plans
to begin billing the cancellation fee in November
2005 based on order cancellations and executions
occurring in October 2005.
4 In Amendment No. 2, the Exchange made
technical corrections to the proposed rule text. The
effective date of the original proposed rule change
is September 20, 2005, the effective date of
Amendment No. 1 is September 23, 2005, and the
effective date of Amendment No. 2 is September 26,
2005. For purposes of calculating the 60-day period
within which the Commission may summarily
abrogate the proposed rule change under Section
19(b)(3)(C) of the Act, the Commission considers
the period to commence on September 23, 2005, the
date on which Amex filed Amendment No. 1. See
15 U.S.C. 78s(b)(3)(C).
5 15 U.S.C. 78s(b)(3)(A)(ii).
6 17 CFR 240.19b–4(f)(2).
2 17
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Amex Equity Fee Schedule
I. Transaction Charges
No change.
II. Equities Order Cancellation Fee
The executing clearing member is
charged $0.25 for every equities and
ETF order sent for a mnemonic and
cancelled through Amex systems in a
given month when the total number of
equities and ETF orders executed for
that mnemonic is less than or equal to
10% of equities and ETF orders
cancelled through Amex systems for
that mnemonic in that same month. The
fee does not apply to mnemonics for
which fewer than 100,000 orders were
cancelled through Amex systems and
does not apply to the first 100,000
cancellations submitted for a
mnemonic. In addition, cancellations
resulting from ‘‘Immediate or Cancel’’ or
‘‘Fill or Kill’’ orders will not be counted
towards the number of cancellations
used to determine whether the fee
should be applied to a mnemonic and
will not be counted when determining
the amount of the cancellation fee
charged to an executing clearing
member. Executions of ‘‘Immediate or
Cancel’’ and ‘‘Fill or Kill’’ orders will
however be counted towards the number
of executions.
[II.] III. Regulatory Fee
No change.
*
*
*
*
*
Amex Exchange Traded Funds and
Trust Issued Receipts Fee Schedule
Exchange Traded Funds (ETFs)
include Portfolio Depositary Receipts,
Index Fund Shares and Trust Issued
Receipts. The fee imposed for executing
trades in these securities will vary
depending on for whom the trade is
executed as follows:
I. Transaction Charges for ETFs Without
Unreimbursed Fees to a Third Party
No change.
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Federal Register / Vol. 70, No. 193 / Thursday, October 6, 2005 / Notices
II. Transaction Charges for ETFs for
which the Exchange Pays Unreimbursed
Fees to a Third Party
No change.
III. Transaction Charges for SPDR OStrip
No change.
IV. Transaction Charges for iShares
FTSE/Xinhua China 25 Index Fund
No change.
Notes:
No change.
V. ETF Order Cancellation Fee
The executing clearing member is
charged $0.25 for every equities and
ETF order sent for a mnemonic and
cancelled through Amex systems in a
given month when the total number of
equities and ETF orders executed for
that mnemonic is less than or equal to
10% of equities and ETF orders
cancelled through Amex systems for
that mnemonic in that same month. The
fee does not apply to mnemonics for
which fewer than 100,000 orders were
cancelled through Amex systems and
does not apply to the first 100,000
cancellations submitted for a
mnemonic. In addition, cancellations
resulting from ‘‘Immediate or Cancel’’ or
‘‘Fill or Kill’’ orders will not be counted
towards the number of cancellations
used to determine whether the fee
should be applied to a mnemonic and
will not be counted when determining
the amount of the cancellation fee
charged to an executing clearing
member. Executions of ‘‘Immediate or
Cancel’’ and ‘‘Fill or Kill’’ orders will
however be counted towards the number
of executions.
[II.] VI. Regulatory Fee
No charge.
Note:
1. This exemption does not apply to
System Orders of a member or member
organization trading as agent for the
account of a non-member competing
market maker, who will be charged
$.000075 × Total Value
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
Amex 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. Amex has prepared
summaries, set forth in Sections A, B,
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19:52 Oct 05, 2005
Jkt 208001
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 establish a
fee on the cancellation of orders in
equities and ETFs. The Amex believes
that this fee is necessary given the often
disproportionate number of order
cancellations received relative to order
executions and the increased costs
associated with the practice of
immediately following an order routed
through exchange systems with a cancel
request for that order. These order
cancellations utilize system capacity
and may require manual processing by
specialist unit personnel, which may
unnecessarily distract specialist staff
from other responsibilities.
Cancellations often come in large
numbers creating backlogs in Amex
systems, increasing Exchange costs,
adversely impacting public customers,
their clearing firms and specialists and
resulting in less than timely executions
of customer orders. The large volume of
order cancellations requires an increase
in Exchange spending on systems and
related hardware used to process
increased message traffic.
The cancellation fee for equities and
ETFs is similar in structure to the
options order cancellation fee adopted
by the Exchange in 2001.7 The fee will
apply to the executing clearing member
when the number of cancellations of
equity and ETF orders exceeds certain
parameters. The cancellation fee for
equities and ETFs will be calculated and
applied on a ‘‘mnemonic-by-mnemonic’’
basis for each clearing member.
Mnemonics are reference numbers or
codes used by executing clearing
members to designate: (1) Either the
branch, trading desk or account from
which orders, cancellations or other
messages are sent to Amex; or (2) the
types of products for which orders,
cancellations or other types of messages
are sent to Amex. For example, some
clearing firms use one mnemonic to
send equity orders and cancellations
and another mnemonic to send ETF
orders and cancellations. Each
executing clearing member has at least
one mnemonic, while many executing
clearing members have two or more.
Calculating and applying the
cancellation fee for equities and ETFs
on a mnemonic-by-mnemonic basis
7 See Securities Exchange Act Release No. 45110
(November 27, 2001), 66 FR 63080 (December 4,
2001).
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58497
provides a more precise way of billing
executing clearing members.
Specifically, an executing clearing
member will be charged $0.25 for every
equities and ETF order sent for a
mnemonic and cancelled through Amex
systems in a given month when the total
number of equities and ETF orders
executed for that mnemonic is less than
or equal to 10% of the equities and ETF
orders cancelled through Amex systems
for that mnemonic in that same month.
The fee does not apply to mnemonics
for which fewer than 100,000 orders
were cancelled through Amex systems
and does not apply to the first 100,000
cancellations submitted for a
mnemonic. For example, in August
2005, an executing clearing member
submitted, for one mnemonic, 313,511
orders in Amex equities. For that same
mnemonic, the executing clearing
member cancelled 286,556 of those
orders and executed 26,955. Pursuant to
the proposed cancellation fee, the
executing clearing member would have
been subject to a fee of $46,639
(286,556×100,000 × $0.25) for that
mnemonic. Cancellations resulting from
‘‘Immediate or Cancel’’ or ‘‘Fill or Kill’’
orders 8 will not be counted towards the
number of cancellations, since those
order types, which combine an order
with its cancellation in one message, do
not add to the message traffic sent
through Exchange systems.
Cancellations resulting from
‘‘Immediate or Cancel’’ and ‘‘Fill or
Kill’’ orders will not be counted when
determining the amount of the
cancellation fee charged to an executing
clearing member. Executions of
‘‘Immediate or Cancel’’ and ‘‘Fill or
Kill’’ orders will, however, be counted
towards the number of executions.9
Amex plans to begin billing the
cancellation fee in November 2005
based on order cancellations and
executions occurring in October 2005.10
2. Statutory Basis
Amex believes that the proposed rule
change, as amended, is consistent with
Section 6(b) of the Act,11 in general, and
furthers the objectives of Section 6(b)(4)
8 A ‘‘Fill or Kill’’ order is a market or limited price
order which is to be executed in its entirety as soon
as it is represented in the trading crowd, and such
order, if not so executed, is to be treated as
cancelled. An ‘‘Immediate or Cancel’’ order is a
market or limited price order which is to be
executed in whole or in part as soon as such order
is represented in the trading crowd, and the portion
not so executed, is to be treated as cancelled. See
Amex Rules 131(i) and (k).
9 See Amendment No. 1, supra note 3.
10 Id.
11 15 U.S.C. 78f(b).
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58498
Federal Register / Vol. 70, No. 193 / Thursday, October 6, 2005 / Notices
of the Act,12 in particular, in that it is
designed to provide for the equitable
allocation of reasonable dues, fees, and
other charges among its members and
issuers and other persons using its
facilities. In particular, Amex believes
that the proposed cancellation fee will
allow the Exchange to more equitably
recover systems capacity costs from its
members.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Amex does not believe that the
proposed rule change, as amended, will
impose any burden on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 13 and subparagraph (f)(2) of
Rule 19b-4 thereunder 14 since it
establishes or changes a due, fee or
other charge imposed by the Exchange.
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 appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.15
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-Amex-2005–085 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
U.S.C. 78f(b)(4).
U.S.C. 78s(b)(3)(A).
14 17 CFR 240.19b-4(f)(2).
15 See supra note 4.
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–9303.
All submissions should refer to File
Number SR-Amex-2005–085. 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 Amex. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–Amex–2005–085 and
should be submitted on or before
October 27, 2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.16
Jonathan G. Katz,
Secretary.
[FR Doc. E5–5469 Filed 10–5–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52532; File No. SR–CBOE–
2005–75]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Inc.; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change and Amendment No. 1 Thereto
Relating to Remote Market-Maker
Transaction Fees
September 29, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
12 15
13 15
VerDate Aug<31>2005
19:52 Oct 05, 2005
16 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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notice is hereby given that on
September 9, 2005, the Chicago Board
Options Exchange, Inc. (‘‘CBOE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which items have been
prepared by the Exchange. On
September 26, 2005, the CBOE
submitted Amendment No. 1 to the
proposed rule change.3 The CBOE has
filed the proposed rule change as one
establishing or changing a due, fee, or
other charge imposed by the CBOE
under Section 19(b)(3)(A)(ii) of the Act 4
and Rule 19b–4(f)(2) thereunder,5 which
renders the proposal, as amended,
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
The CBOE proposes to amend its Fees
Schedule to establish a Remote MarketMaker transaction fee for index options,
options on exchange-traded funds
(‘‘ETFs’’) and options on Holding
Company Depositary Receipts
(‘‘HOLDRs’’). Below is the text of the
proposed rule change. Proposed new
language is italicized; proposed
deletions are in [brackets].
*
*
*
*
*
Chicago Board Options Exchange, Inc.;
Fees Schedule
September [1]9, 2005
1. Options Transaction Fees
(1)(3)(4)(7)(16): Per Contract
Equity Options (13): I.–IX.
Unchanged.
QQQQ and SPDR Options: I.–VII.
Unchanged.
Index Options (includes Dow Jones
DIAMONDS, OEF and other ETF and
HOLDRs options):
I.–VIII. Unchanged.
IX. Remote Market-Maker—$.26
2. Marketing Fee (6)(16): Unchanged.
3. Floor Brokerage Fee (1)(5)(16):
Unchanged.
4. RAES Access Fee (Retail Automatic
Execution System) (1)(4)(16):
Unchanged.
Footnotes: (1)–(16) Unchanged.
3 In Amendment No. 1, CBOE revised the purpose
section of the proposed rule change to clarify the
rationale for the distinction between the transaction
fee for on-floor market-makers and remote marketmakers.
4 15 U.S.C. 78s(b)(3)(A)(ii).
5 17 CFR 240.19b–4(f)(2)
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]]>Agencies
[Federal Register Volume 70, Number 193 (Thursday, October 6, 2005)]
[Notices]
[Pages 58496-58498]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-5469]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52533; File No. SR-Amex-2005-085]
Self-Regulatory Organizations; American Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to the Implementation of a Cancellation Fee for Equities and
ETFs
September 29, 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 September 20, 2005, the American Stock Exchange LLC (``Amex'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by Amex. On September 23,
2005, Amex filed Amendment No. 1 to the proposed rule change.\3\ On
September 26, 2005, Amex filed Amendment No. 2 to the proposed rule
change.\4\ Amex has designated this proposal as one establishing or
changing a due, fee, or other charge imposed by Amex under Section
19(b)(3)(A)(ii) of the Act,\5\ and Rule 19b-4(f)(2) thereunder,\6\
which renders the proposal effective upon filing with the Commission.
The Commission is publishing this notice to solicit comments on the
proposed rule change, as amended, from interested parties.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In Amendment No. 1, the Exchange: (1) Clarified that
cancellations resulting from ``Immediate or Cancel'' and ``Fill or
Kill'' orders will not be counted when determining the amount of the
cancellation fee to be charged to an executing clearing member and
updated the corresponding proposed rule text; and (2) stated that
Amex plans to begin billing the cancellation fee in November 2005
based on order cancellations and executions occurring in October
2005.
\4\ In Amendment No. 2, the Exchange made technical corrections
to the proposed rule text. The effective date of the original
proposed rule change is September 20, 2005, the effective date of
Amendment No. 1 is September 23, 2005, and the effective date of
Amendment No. 2 is September 26, 2005. For purposes of calculating
the 60-day period within which the Commission may summarily abrogate
the proposed rule change under Section 19(b)(3)(C) of the Act, the
Commission considers the period to commence on September 23, 2005,
the date on which Amex filed Amendment No. 1. See 15 U.S.C.
78s(b)(3)(C).
\5\ 15 U.S.C. 78s(b)(3)(A)(ii).
\6\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Amex proposes to establish a fee based on the number of order
cancellations in equities, Exchange Traded Fund Shares and Trust Issued
Receipts (hereinafter referred to as ``equities and ETFs'') routed
through Amex systems. Below is the text of the proposed rule change, as
amended. Proposed new language is italicized; proposed deletions are in
[brackets].
* * * * *
Amex Equity Fee Schedule
I. Transaction Charges
No change.
II. Equities Order Cancellation Fee
The executing clearing member is charged $0.25 for every equities
and ETF order sent for a mnemonic and cancelled through Amex systems in
a given month when the total number of equities and ETF orders executed
for that mnemonic is less than or equal to 10% of equities and ETF
orders cancelled through Amex systems for that mnemonic in that same
month. The fee does not apply to mnemonics for which fewer than 100,000
orders were cancelled through Amex systems and does not apply to the
first 100,000 cancellations submitted for a mnemonic. In addition,
cancellations resulting from ``Immediate or Cancel'' or ``Fill or
Kill'' orders will not be counted towards the number of cancellations
used to determine whether the fee should be applied to a mnemonic and
will not be counted when determining the amount of the cancellation fee
charged to an executing clearing member. Executions of ``Immediate or
Cancel'' and ``Fill or Kill'' orders will however be counted towards
the number of executions.
[II.] III. Regulatory Fee
No change.
* * * * *
Amex Exchange Traded Funds and Trust Issued Receipts Fee Schedule
Exchange Traded Funds (ETFs) include Portfolio Depositary Receipts,
Index Fund Shares and Trust Issued Receipts. The fee imposed for
executing trades in these securities will vary depending on for whom
the trade is executed as follows:
I. Transaction Charges for ETFs Without Unreimbursed Fees to a Third
Party
No change.
[[Page 58497]]
II. Transaction Charges for ETFs for which the Exchange Pays
Unreimbursed Fees to a Third Party
No change.
III. Transaction Charges for SPDR O-Strip
No change.
IV. Transaction Charges for iShares FTSE/Xinhua China 25 Index Fund
No change.
Notes:
No change.
V. ETF Order Cancellation Fee
The executing clearing member is charged $0.25 for every equities
and ETF order sent for a mnemonic and cancelled through Amex systems in
a given month when the total number of equities and ETF orders executed
for that mnemonic is less than or equal to 10% of equities and ETF
orders cancelled through Amex systems for that mnemonic in that same
month. The fee does not apply to mnemonics for which fewer than 100,000
orders were cancelled through Amex systems and does not apply to the
first 100,000 cancellations submitted for a mnemonic. In addition,
cancellations resulting from ``Immediate or Cancel'' or ``Fill or
Kill'' orders will not be counted towards the number of cancellations
used to determine whether the fee should be applied to a mnemonic and
will not be counted when determining the amount of the cancellation fee
charged to an executing clearing member. Executions of ``Immediate or
Cancel'' and ``Fill or Kill'' orders will however be counted towards
the number of executions.
[II.] VI. Regulatory Fee
No charge.
Note:
1. This exemption does not apply to System Orders of a member or
member organization trading as agent for the account of a non-member
competing market maker, who will be charged $.000075 x Total Value
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Amex 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. Amex 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 establish a fee on the cancellation of
orders in equities and ETFs. The Amex believes that this fee is
necessary given the often disproportionate number of order
cancellations received relative to order executions and the increased
costs associated with the practice of immediately following an order
routed through exchange systems with a cancel request for that order.
These order cancellations utilize system capacity and may require
manual processing by specialist unit personnel, which may unnecessarily
distract specialist staff from other responsibilities. Cancellations
often come in large numbers creating backlogs in Amex systems,
increasing Exchange costs, adversely impacting public customers, their
clearing firms and specialists and resulting in less than timely
executions of customer orders. The large volume of order cancellations
requires an increase in Exchange spending on systems and related
hardware used to process increased message traffic.
The cancellation fee for equities and ETFs is similar in structure
to the options order cancellation fee adopted by the Exchange in
2001.\7\ The fee will apply to the executing clearing member when the
number of cancellations of equity and ETF orders exceeds certain
parameters. The cancellation fee for equities and ETFs will be
calculated and applied on a ``mnemonic-by-mnemonic'' basis for each
clearing member. Mnemonics are reference numbers or codes used by
executing clearing members to designate: (1) Either the branch, trading
desk or account from which orders, cancellations or other messages are
sent to Amex; or (2) the types of products for which orders,
cancellations or other types of messages are sent to Amex. For example,
some clearing firms use one mnemonic to send equity orders and
cancellations and another mnemonic to send ETF orders and
cancellations. Each executing clearing member has at least one
mnemonic, while many executing clearing members have two or more.
Calculating and applying the cancellation fee for equities and ETFs on
a mnemonic-by-mnemonic basis provides a more precise way of billing
executing clearing members.
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\7\ See Securities Exchange Act Release No. 45110 (November 27,
2001), 66 FR 63080 (December 4, 2001).
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Specifically, an executing clearing member will be charged $0.25
for every equities and ETF order sent for a mnemonic and cancelled
through Amex systems in a given month when the total number of equities
and ETF orders executed for that mnemonic is less than or equal to 10%
of the equities and ETF orders cancelled through Amex systems for that
mnemonic in that same month. The fee does not apply to mnemonics for
which fewer than 100,000 orders were cancelled through Amex systems and
does not apply to the first 100,000 cancellations submitted for a
mnemonic. For example, in August 2005, an executing clearing member
submitted, for one mnemonic, 313,511 orders in Amex equities. For that
same mnemonic, the executing clearing member cancelled 286,556 of those
orders and executed 26,955. Pursuant to the proposed cancellation fee,
the executing clearing member would have been subject to a fee of
$46,639 (286,556x100,000 x $0.25) for that mnemonic. Cancellations
resulting from ``Immediate or Cancel'' or ``Fill or Kill'' orders \8\
will not be counted towards the number of cancellations, since those
order types, which combine an order with its cancellation in one
message, do not add to the message traffic sent through Exchange
systems. Cancellations resulting from ``Immediate or Cancel'' and
``Fill or Kill'' orders will not be counted when determining the amount
of the cancellation fee charged to an executing clearing member.
Executions of ``Immediate or Cancel'' and ``Fill or Kill'' orders will,
however, be counted towards the number of executions.\9\
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\8\ A ``Fill or Kill'' order is a market or limited price order
which is to be executed in its entirety as soon as it is represented
in the trading crowd, and such order, if not so executed, is to be
treated as cancelled. An ``Immediate or Cancel'' order is a market
or limited price order which is to be executed in whole or in part
as soon as such order is represented in the trading crowd, and the
portion not so executed, is to be treated as cancelled. See Amex
Rules 131(i) and (k).
\9\ See Amendment No. 1, supra note 3.
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Amex plans to begin billing the cancellation fee in November 2005
based on order cancellations and executions occurring in October
2005.\10\
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\10\ Id.
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2. Statutory Basis
Amex believes that the proposed rule change, as amended, is
consistent with Section 6(b) of the Act,\11\ in general, and furthers
the objectives of Section 6(b)(4)
[[Page 58498]]
of the Act,\12\ in particular, in that it is designed to provide for
the equitable allocation of reasonable dues, fees, and other charges
among its members and issuers and other persons using its facilities.
In particular, Amex believes that the proposed cancellation fee will
allow the Exchange to more equitably recover systems capacity costs
from its members.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Amex does not believe that the proposed rule change, as amended,
will impose any burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \13\ and subparagraph (f)(2) of Rule 19b-4
thereunder \14\ since it establishes or changes a due, fee or other
charge imposed by the Exchange.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(2).
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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 appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.\15\
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\15\ See supra note 4.
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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-Amex-2005-085 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-9303.
All submissions should refer to File Number SR-Amex-2005-085. 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 Amex. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-Amex-2005-085 and should be submitted on or before
October 27, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. E5-5469 Filed 10-5-05; 8:45 am]
BILLING CODE 8010-01-P
