Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Imposing Licensing Fees in Connection with the Firm-Related Equity Option and Index Option Fee Cap, 9186-9188 [E6-2457]

Download as PDF 9186 Federal Register / Vol. 71, No. 35 / Wednesday, February 22, 2006 / Notices Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2006–09 on the subject line. Paper Comments cprice-sewell on PROD1PC66 with NOTICES • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53287; File No. SR–Phlx– 2006–10] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Imposing Licensing Fees in Connection with the Firm-Related Equity Option and Index Option Fee Cap February 14, 2006. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 All submissions should refer to File notice is hereby given that on February Number SR–CBOE–2006–09. This file 2, 2006, the Philadelphia Stock number should be included on the subject line if e-mail is used. To help the Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission process and review your Commission (‘‘Commission’’) the comments more efficiently, please use proposed rule change as described in only one method. The Commission will Items I, II and III below, which Items post all comments on the Commission’s have been prepared by the Phlx. The Internet Web site (http://www.sec.gov/ Phlx has designated this proposal as one rules/sro.shtml). Copies of the establishing or changing a due, fee, or submission, all subsequent other charge imposed by a selfamendments, all written statements regulatory organization pursuant to with respect to the proposed rule section 19(b)(3)(A)(ii) of the Act 3 and change that are filed with the Rule 19b–4(f)(2) thereunder,4 which Commission, and all written renders the proposal effective upon communications relating to the filing with the Commission. The proposed rule change between the Commission is publishing this notice to Commission and any person, other than solicit comments on the proposed rule those that may be withheld from the change from interested persons. public in accordance with the I. Self-Regulatory Organization’s provisions of 5 U.S.C. 552, will be Statement of the Terms of Substance of available for inspection and copying in the Proposed Rule Change the Commission’s Public Reference The Phlx proposes to amend its Room. Copies of such filing also will be schedule of fees to adopt a license fee available for inspection and copying at of $.10 for options traded on the the principal office of the CBOE. All following products: 5 (1) State Street comments received will be posted Global Advisors’, a division of State without change; the Commission does Street Bank and Trust Company not edit personal identifying (‘‘SSGA’’), streetTracks based on the information from submissions. You Dow Jones & Co., Inc. (‘‘Dow Jones’’) should submit only information that Global Titans 50 IndexSM, traded under you wish to make available publicly. All the symbol DGT; (2) SSGA’s submissions should refer to File streetTracks based on the Dow Jones Number SR–CBOE–2006–09 and should Wilshire 5000 IndexSM, traded under be submitted on or before March 15, the symbol TMW; (3) BGI’s iShares Dow 2006. Jones Select Dividend IndexSM, traded under the symbol DVY; (4) iShares Dow For the Commission, by the Division of Jones U.S. Total Market IndexSM, traded Market Regulation, pursuant to delegated 5 under the symbol IYY; (5) iShares Dow authority. Jones U.S. Basic Materials IndexSM, Nancy M. Morris, traded under the symbol IWM; (6) Secretary. iShares Dow Jones U.S. Consumer [FR Doc. E6–2439 Filed 2–21–06; 8:45 am] Services Sector IndexSM, traded under BILLING CODE 8010–01–P 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 5 This fee will be charged only to Exchange Members. 2 17 5 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 14:35 Feb 21, 2006 Jkt 208001 PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 the symbol IYC; (7) iShares Dow Jones U.S. Financial Sector IndexSM, traded under the symbol IYF; (8) iShares Dow Jones U.S. Financial Services Sector IndexSM, traded under the symbol IYG; (9) iShares Dow Jones U.S. Healthcare Sector IndexSM, traded under the symbol IYH; (10) iShares Dow Jones U.S. Industrial Sector IndexSM, traded under the symbol IYJ; (11) iShares Dow Jones U.S. Consumer Goods Sector IndexSM, traded under the symbol IYK; (12) iShares Dow Jones U.S. Real Estate Sector IndexSM, traded under the symbol IYR; (13) iShares Dow Jones U.S. Technology Sector IndexSM, traded under the symbol IYW; (14) iShares Dow Jones U.S. Telecommunications Sector IndexSM, traded under the symbol IYZ; (15) iShares Dow Jones U.S. Utilities Sector IndexSM, traded under the symbol IDU; and (16) First Trust’s ETF based on the Dow Jones Select Microcap IndexSM, traded under the symbol FDM, (collectively ‘‘Dow Jones products’’) 6 to be assessed per contract side for equity option ‘‘firm’’ transactions (comprised of equity option firm/proprietary comparison transactions, equity option firm/ proprietary transactions and equity option firm/proprietary facilitation transactions). This license fee will be imposed only after the Exchange’s $60,000 ‘‘firm-related’’ equity option and index option comparison and transaction charge cap, described more fully below, is reached. Currently, the Exchange imposes a cap of $60,000 per member organization 7 on all ‘‘firm-related’’ 6 ‘‘Dow Jones’’ and ‘‘SSGA’s streetTracks based on the Dow Jones Global Titans 50 IndexSM’’, ‘‘SSGA’s streetTracks based on the Dow Jones Wilshire 5000 IndexSM’’, ‘‘BGI’s iShares Dow Jones Select Dividend IndexSM’’, ‘‘iShares Dow Jones U.S. Total Market IndexSM’’, ‘‘iShares Dow Jones U.S. Basic Materials IndexSM’’, ‘‘iShares Dow Jones U.S. Consumer Services Sector IndexSM’’, ‘‘iShares Dow Jones U.S. Financial Sector IndexSM’’, ‘‘iShares Dow Jones U.S. Financial Services Sector IndexSM’’, ‘‘iShares Dow Jones U.S. Healthcare Sector IndexSM’’, ‘‘iShares Dow Jones U.S. Industrial Sector IndexSM’’, ‘‘iShares Dow Jones U.S. Consumer Goods Sector IndexSM’’, ‘‘iShares Dow Jones U.S. Real Estate Sector IndexSM’’, ‘‘iShares Dow Jones U.S. Technology Sector IndexSM’’, ‘‘iShares Dow Jones U.S. Telecommunications Sector IndexSM’’, ‘‘iShares Dow Jones U.S. Utilities Sector IndexSM’’, and ‘‘First Trust’s ETF based on the Dow Jones Select Microcap IndexSM’’, are service marks of Dow Jones & Company, Inc. and have been licensed for use for certain purposes by the Philadelphia Stock Exchange, Inc. The Dow Jones products are not sponsored, endorsed, sold or promoted by Dow Jones, and Dow Jones makes no representation regarding the advisability of investing in such product(s). 7 The firm/proprietary comparison or transaction charge applies to member organizations for orders for the proprietary account of any member or nonmember broker-dealer that derives more than 35% of its annual, gross revenues from commissions and principal transactions with customers. Member E:\FR\FM\22FEN1.SGM 22FEN1 Federal Register / Vol. 71, No. 35 / Wednesday, February 22, 2006 / Notices cprice-sewell on PROD1PC66 with NOTICES equity option and index option comparison and transaction charges combined.8 Specifically, ‘‘firm-related’’ charges include equity option firm/ proprietary comparison charges, equity option firm/proprietary transaction charges, equity option firm/proprietary facilitation transaction charges, index option firm/proprietary comparison charges, index option firm/proprietary transaction charges, and index option firm/proprietary facilitation transaction charges (collectively the ‘‘firm-related charges’’). Thus, such firm-related charges in the aggregate for one billing month may not exceed $60,000 per month per member organization. The Exchange also imposes a license fee of $0.10 per contract side for equity option and index option ‘‘firm’’ transactions on certain licensed products (collectively ‘‘licensed products’’) after the $60,000 cap, as described above, is reached.9 Therefore, when a member organization exceeds the $60,000 cap (comprised of combined firm-related charges), the member organization is charged $60,000, plus license fees of $0.10 per contract side for any contracts in licensed products (if any) over those that were included in reaching the $60,000 cap. In other words, if the cap is reached, the $0.10 license fee is imposed on all subsequent equity option and index option firm transactions; these license fees are charged in addition to the $60,000 cap. The Exchange proposes to adopt a $.10 license fee per contract side for the Dow Jones products for equity option firm transactions, which will be imposed after the $60,000 cap is reached in the same way as the current licensed product fees are assessed. Thus, when a member organization exceeds the $60,000 cap, the member organization will be charged $60,000 plus any applicable license fees for trades of licensed products, including the Dow Jones products, over those organizations will be required to verify this amount to the Exchange by certifying that they have reached this threshold by submitting a copy of their annual report, which was prepared in accordance with Generally Accepted Accounting Principles (‘‘GAAP’’). In the event that a member organization has not been in business for one year, the most recent quarterly reports, prepared in accordance with GAAP, will be accepted. See Securities Exchange Act Release No. 43558 (November 14, 2000), 65 FR 69984 (November 21, 2000) (SR–Phlx– 00–85). 8 See Securities Exchange Act Release No. 51024 (January 11, 2005), 70 FR 3088 (January 19, 2005) (SR–Phlx–2004–94). 9 For a complete list of the licensed products that are assessed a $.10 license fee per contract side after the $60,000 cap is reached, see $60,000 ‘‘Firm Related’’ Equity Option and Index Option Cap on the Exchange’s fee schedule. See also, Securities Exchange Act Release No. 52220 (August 5, 2005), 70 FR 46899 (August 11, 2005) (SR–Phlx–2005–49). VerDate Aug<31>2005 14:35 Feb 21, 2006 Jkt 208001 trades that were counted in reaching the $60,000 cap.10 This proposal is scheduled to become effective for transactions settling on or after February 2, 2006. The text of the proposed rule change is available at the Commission’s Public Reference Room, at the Exchange and at the Exchange’s Web site: http:// www.phlx.com/exchange/ phlx_rule_fil.html. 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 proposal. 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 purpose of assessing the Dow Jones products license fee of $.10 per contract side after reaching the $60,000 cap as described in this proposal is to help defray licensing costs associated with the trading of these products, while still capping member organizations’ fees enough to attract volume from other exchanges. The cap operates this way in order to offer an incentive for additional volume without leaving the Exchange with significant out-of-pocket costs. 9187 dues, fees, and other charges among Exchange members. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes that the proposed rule change will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received comments on the proposed rule change. The Phlx has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective pursuant to section 19(b)(3)(A)(ii) of the Act,13 and paragraph (f)(2) of Rule 19b–4 thereunder 14 because it establishes or changes a due, fee, or other charge. 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. 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: 2. Statutory Basis Electronic Comments The Exchange believes that its proposal to amend its schedule of dues, fees and charges is consistent with section 6(b) of the Act 11 in general, and furthers the objectives of section 6(b)(4) of the Act 12 in particular, in that it is an equitable allocation of reasonable • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–Phlx–2006–10 on the subject line. 10 Consistent with current practice, when calculating the $60,000 cap, the Exchange first calculates all equity option and index option transaction and comparison charges for products without license fees and then equity option and index option transaction and comparison charges for products with license fees (i.e., QQQ license fees) that are assessed by the Exchange after the $60,000 cap is reached. See Securities Exchange Act Release No. 50836 (December 10, 2004), 69 FR 75584 (December 17, 2004) (SR–Phlx–2004–70). 11 15 U.S.C. 78f(b). 12 15 U.S.C. 78f(b)(4). PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–Phlx–2006–10. This file 13 15 14 17 E:\FR\FM\22FEN1.SGM U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). 22FEN1 9188 Federal Register / Vol. 71, No. 35 / Wednesday, February 22, 2006 / Notices 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 (http://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 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–2006–10 and should be submitted on or before March 15, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.15 Nancy M. Morris, Secretary. [FR Doc. E6–2457 Filed 2–21–06; 8:45 am] cprice-sewell on PROD1PC66 with NOTICES Notice Seeking Exemption Under Section 312 of the Small Business Investment Act, Conflicts of Interest Notice is hereby given that Gemini Investors IV, L.P. (‘‘Applicant’’), 20 William Street, Wellesley, MA 02481, an SBIC Applicant under the Small Business Investment Act of 1958, as amended (‘‘the Act’’), in connection with the financing of a small concern, has sought an exemption under section 312 of the Act and § 107.730, Financings which Constitute Conflicts of Interest, of the Small Business Administration (‘‘SBA’’) rules and regulations (13 CFR 107.730 (2004)). Gemini Investors IV, L.P. proposes to provide financing in the form of subordinated debt with warrant to purchase 5% of common stock of UMD Technology, Inc. (‘‘UMD’’), 1499 SE Tech Center Place, Suite 140, Vancouver, WA 98683. The VerDate Aug<31>2005 14:35 Feb 21, 2006 Jkt 208001 BILLING CODE 8025–01–P DEPARTMENT OF TRANSPORTATION National Highway Traffic Safety Administration [Docket No. NHTSA–2004–19485; Notice 2] National Highway Traffic Safety Administration, DOT. ACTION: Notice of decision by the National Highway Traffic Safety Administration that nonconforming 2004 Jeep Liberty multipurpose passenger vehicles manufactured for the Mexican market are eligible for importation. AGENCY: SMALL BUSINESS ADMINISTRATION CFR 200.30–3(a)(12). ` Jaime Guzman-Fournier, Associate Administrator for Investment. [FR Doc. E6–2430 Filed 2–21–06; 8:45 am] Decision That Nonconforming 2004 Jeep Liberty Multipurpose Passenger Vehicles Manufactured for the Mexican Market Are Eligible for Importation BILLING CODE 8010–01–P 15 17 financing is contemplated for growth, modernization, working capital and business expansion of UMD. This investment requires an exemption from the prohibitions in 13 CFR 107.730, Conflicts of Interest, because an affiliated SBIC, Gemini Investors III, L.P. (‘‘Gemini III’’), has a controlling equity interest (66% preclosing, 62.7% post closing) in UMD. Therefore, UMD Technology, Inc. is considered an Associate of the Applicant as defined in § 107.50 of the Regulations. Notice is hereby given that any interested person may submit written comments on the transaction to the Associate Administrator for Investment, U.S. Small Business Administration, 409 Third Street, SW., Washington, DC 20416. SUMMARY: This document announces a decision by the National Highway Traffic Safety Administration (NHTSA) that certain 2004 Jeep Liberty multipurpose passenger vehicles manufactured for the Mexican market that were not originally manufactured to comply with all applicable Federal motor vehicle safety standards (FMVSS) are eligible for importation into the United States because they are substantially similar to vehicles originally manufactured for sale in the United States and that were certified by their manufacturer as complying with the safety standards (the U.S. certified version of the 2004 Jeep Liberty multipurpose passenger vehicle), and they are capable of being readily altered to conform to the standards. PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 This decision was effective January 26, 2005. The agency notified the petitioner at that time that the subject vehicles are eligible for importation. This document provides public notice of the eligibility decision. FOR FURTHER INFORMATION CONTACT: Coleman Sachs, Office of Vehicle Safety Compliance, NHTSA (202–366–3151). SUPPLEMENTARY INFORMATION: DATES: Background Under 49 U.S.C. 30141(a)(1)(A), a motor vehicle that was not originally manufactured to conform to all applicable FMVSS shall be refused admission into the United States unless NHTSA has decided that the motor vehicle is substantially similar to a motor vehicle originally manufactured for importation into and sale in the United States, certified as required under 49 U.S.C. 30115, and of the same model year as the model of the motor vehicle to be compared, and is capable of being readily altered to conform to all applicable FMVSS. Petitions for eligibility decisions may be submitted by either manufacturers or importers who have registered with NHTSA pursuant to 49 CFR part 592. As specified in 49 CFR 593.7, NHTSA publishes notice in the Federal Register of each petition that it receives, and affords interested persons an opportunity to comment on the petition. At the close of the comment period, NHTSA decides, on the basis of the petition and any comments that it has received, whether the vehicle is eligible for importation. The agency then publishes this decision in the Federal Register. Wallace Environmental Testing Laboratories, Inc. (WETL) of Huston, Texas (Registered Importer 90–005), petitioned NHTSA to decide whether 2004 Jeep Liberty multipurpose passenger vehicles manufactured for the Mexican market are eligible for importation into the United States. NHTSA published notice of the petition on November 3, 2004 (69 FR 64129) to afford an opportunity for public comment. The reader is referred to that notice for a thorough description of the petition. One comment was received in response to the notice of petition, from DaimlerChrysler Corporation (DCC), the vehicle’s original manufacturer. DCC addressed issues concerning the absence of advanced airbag systems on the vehicles that are the subject of this petition. DCC observed that the petition states that the Mexican model’s passive restraint system is identical to that installed on the U.S.-model. DCC E:\FR\FM\22FEN1.SGM 22FEN1

Agencies

[Federal Register Volume 71, Number 35 (Wednesday, February 22, 2006)]
[Notices]
[Pages 9186-9188]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-2457]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53287; File No. SR-Phlx-2006-10]


Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Imposing Licensing Fees in Connection with the Firm-Related Equity 
Option and Index Option Fee Cap

February 14, 2006.
    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 2, 2006, the Philadelphia Stock Exchange, Inc. (``Phlx'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II 
and III below, which Items have been prepared by the Phlx. The Phlx has 
designated this proposal as one establishing or changing a due, fee, or 
other charge imposed by a self-regulatory organization pursuant to 
section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ which renders the proposal effective upon filing with 
the Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Phlx proposes to amend its schedule of fees to adopt a license 
fee of $.10 for options traded on the following products: \5\ (1) State 
Street Global Advisors', a division of State Street Bank and Trust 
Company (``SSGA''), streetTracks based on the Dow Jones & Co., Inc. 
(``Dow Jones'') Global Titans 50 Index\SM\, traded under the symbol 
DGT; (2) SSGA's streetTracks based on the Dow Jones Wilshire 5000 
Index\SM\, traded under the symbol TMW; (3) BGI's iShares Dow Jones 
Select Dividend Index\SM\, traded under the symbol DVY; (4) iShares Dow 
Jones U.S. Total Market Index\SM\, traded under the symbol IYY; (5) 
iShares Dow Jones U.S. Basic Materials Index\SM\, traded under the 
symbol IWM; (6) iShares Dow Jones U.S. Consumer Services Sector 
Index\SM\, traded under the symbol IYC; (7) iShares Dow Jones U.S. 
Financial Sector Index\SM\, traded under the symbol IYF; (8) iShares 
Dow Jones U.S. Financial Services Sector Index\SM\, traded under the 
symbol IYG; (9) iShares Dow Jones U.S. Healthcare Sector Index\SM\, 
traded under the symbol IYH; (10) iShares Dow Jones U.S. Industrial 
Sector Index\SM\, traded under the symbol IYJ; (11) iShares Dow Jones 
U.S. Consumer Goods Sector Index\SM\, traded under the symbol IYK; (12) 
iShares Dow Jones U.S. Real Estate Sector Index\SM\, traded under the 
symbol IYR; (13) iShares Dow Jones U.S. Technology Sector Index\SM\, 
traded under the symbol IYW; (14) iShares Dow Jones U.S. 
Telecommunications Sector Index\SM\, traded under the symbol IYZ; (15) 
iShares Dow Jones U.S. Utilities Sector Index\SM\, traded under the 
symbol IDU; and (16) First Trust's ETF based on the Dow Jones Select 
Microcap Index\SM\, traded under the symbol FDM, (collectively ``Dow 
Jones products'') \6\ to be assessed per contract side for equity 
option ``firm'' transactions (comprised of equity option firm/
proprietary comparison transactions, equity option firm/proprietary 
transactions and equity option firm/proprietary facilitation 
transactions). This license fee will be imposed only after the 
Exchange's $60,000 ``firm-related'' equity option and index option 
comparison and transaction charge cap, described more fully below, is 
reached.
---------------------------------------------------------------------------

    \5\ This fee will be charged only to Exchange Members.
    \6\ ``Dow Jones'' and ``SSGA's streetTracks based on the Dow 
Jones Global Titans 50 Index\SM\'', ``SSGA's streetTracks based on 
the Dow Jones Wilshire 5000 Index\SM\'', ``BGI's iShares Dow Jones 
Select Dividend Index\SM\'', ``iShares Dow Jones U.S. Total Market 
Index\SM\'', ``iShares Dow Jones U.S. Basic Materials Index\SM\'', 
``iShares Dow Jones U.S. Consumer Services Sector Index\SM\'', 
``iShares Dow Jones U.S. Financial Sector Index\SM\'', ``iShares Dow 
Jones U.S. Financial Services Sector Index\SM\'', ``iShares Dow 
Jones U.S. Healthcare Sector Index\SM\'', ``iShares Dow Jones U.S. 
Industrial Sector Index\SM\'', ``iShares Dow Jones U.S. Consumer 
Goods Sector Index\SM\'', ``iShares Dow Jones U.S. Real Estate 
Sector Index\SM\'', ``iShares Dow Jones U.S. Technology Sector 
Index\SM\'', ``iShares Dow Jones U.S. Telecommunications Sector 
Index\SM\'', ``iShares Dow Jones U.S. Utilities Sector Index\SM\'', 
and ``First Trust's ETF based on the Dow Jones Select Microcap 
Index\SM\'', are service marks of Dow Jones & Company, Inc. and have 
been licensed for use for certain purposes by the Philadelphia Stock 
Exchange, Inc. The Dow Jones products are not sponsored, endorsed, 
sold or promoted by Dow Jones, and Dow Jones makes no representation 
regarding the advisability of investing in such product(s).
---------------------------------------------------------------------------

    Currently, the Exchange imposes a cap of $60,000 per member 
organization \7\ on all ``firm-related''

[[Page 9187]]

equity option and index option comparison and transaction charges 
combined.\8\ Specifically, ``firm-related'' charges include equity 
option firm/proprietary comparison charges, equity option firm/
proprietary transaction charges, equity option firm/proprietary 
facilitation transaction charges, index option firm/proprietary 
comparison charges, index option firm/proprietary transaction charges, 
and index option firm/proprietary facilitation transaction charges 
(collectively the ``firm-related charges''). Thus, such firm-related 
charges in the aggregate for one billing month may not exceed $60,000 
per month per member organization.
---------------------------------------------------------------------------

    \7\ The firm/proprietary comparison or transaction charge 
applies to member organizations for orders for the proprietary 
account of any member or non-member broker-dealer that derives more 
than 35% of its annual, gross revenues from commissions and 
principal transactions with customers. Member organizations will be 
required to verify this amount to the Exchange by certifying that 
they have reached this threshold by submitting a copy of their 
annual report, which was prepared in accordance with Generally 
Accepted Accounting Principles (``GAAP''). In the event that a 
member organization has not been in business for one year, the most 
recent quarterly reports, prepared in accordance with GAAP, will be 
accepted. See Securities Exchange Act Release No. 43558 (November 
14, 2000), 65 FR 69984 (November 21, 2000) (SR-Phlx-00-85).
    \8\ See Securities Exchange Act Release No. 51024 (January 11, 
2005), 70 FR 3088 (January 19, 2005) (SR-Phlx-2004-94).
---------------------------------------------------------------------------

    The Exchange also imposes a license fee of $0.10 per contract side 
for equity option and index option ``firm'' transactions on certain 
licensed products (collectively ``licensed products'') after the 
$60,000 cap, as described above, is reached.\9\ Therefore, when a 
member organization exceeds the $60,000 cap (comprised of combined 
firm-related charges), the member organization is charged $60,000, plus 
license fees of $0.10 per contract side for any contracts in licensed 
products (if any) over those that were included in reaching the $60,000 
cap. In other words, if the cap is reached, the $0.10 license fee is 
imposed on all subsequent equity option and index option firm 
transactions; these license fees are charged in addition to the $60,000 
cap.
---------------------------------------------------------------------------

    \9\ For a complete list of the licensed products that are 
assessed a $.10 license fee per contract side after the $60,000 cap 
is reached, see $60,000 ``Firm Related'' Equity Option and Index 
Option Cap on the Exchange's fee schedule. See also, Securities 
Exchange Act Release No. 52220 (August 5, 2005), 70 FR 46899 (August 
11, 2005) (SR-Phlx-2005-49).
---------------------------------------------------------------------------

    The Exchange proposes to adopt a $.10 license fee per contract side 
for the Dow Jones products for equity option firm transactions, which 
will be imposed after the $60,000 cap is reached in the same way as the 
current licensed product fees are assessed. Thus, when a member 
organization exceeds the $60,000 cap, the member organization will be 
charged $60,000 plus any applicable license fees for trades of licensed 
products, including the Dow Jones products, over those trades that were 
counted in reaching the $60,000 cap.\10\
---------------------------------------------------------------------------

    \10\ Consistent with current practice, when calculating the 
$60,000 cap, the Exchange first calculates all equity option and 
index option transaction and comparison charges for products without 
license fees and then equity option and index option transaction and 
comparison charges for products with license fees (i.e., QQQ license 
fees) that are assessed by the Exchange after the $60,000 cap is 
reached. See Securities Exchange Act Release No. 50836 (December 10, 
2004), 69 FR 75584 (December 17, 2004) (SR-Phlx-2004-70).
---------------------------------------------------------------------------

    This proposal is scheduled to become effective for transactions 
settling on or after February 2, 2006.
    The text of the proposed rule change is available at the 
Commission's Public Reference Room, at the Exchange and at the 
Exchange's Web site: http://www.phlx.com/exchange/phlx_rule_
fil.html.

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 proposal. 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 purpose of assessing the Dow Jones products license fee of $.10 
per contract side after reaching the $60,000 cap as described in this 
proposal is to help defray licensing costs associated with the trading 
of these products, while still capping member organizations' fees 
enough to attract volume from other exchanges. The cap operates this 
way in order to offer an incentive for additional volume without 
leaving the Exchange with significant out-of-pocket costs.
2. Statutory Basis
    The Exchange believes that its proposal to amend its schedule of 
dues, fees and charges is consistent with section 6(b) of the Act \11\ 
in general, and furthers the objectives of section 6(b)(4) of the Act 
\12\ in particular, in that it is an equitable allocation of reasonable 
dues, fees, and other charges among Exchange 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

    The Exchange believes that the proposed rule change will not impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received comments on the 
proposed rule change. The Phlx has not received any unsolicited written 
comments from members or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change has become effective pursuant to 
section 19(b)(3)(A)(ii) of the Act,\13\ and paragraph (f)(2) of Rule 
19b-4 thereunder \14\ because it establishes or changes a due, fee, or 
other charge. 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.
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    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \14\ 17 CFR 240.19b-4(f)(2).
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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 is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-Phlx-2006-10 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-Phlx-2006-10. This file

[[Page 9188]]

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 (http://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 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-2006-10 
and should be submitted on or before March 15, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-2457 Filed 2-21-06; 8:45 am]
BILLING CODE 8010-01-P