[Federal Register Volume 65, Number 9 (Thursday, January 13, 2000)]
[Notices]
[Pages 2215-2216]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-780]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-42317; File No. SR-Phlx-99-48]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change by the
Philadelphia Stock Exchange, Inc. Amending the Exchange's Certificate
of Incorporation
January 5, 2000.
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 November 18, 1999, the Philadelphia Stock Exchange, Inc. (``Phlx''
or ``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III, below, which Items have been prepared by the
Exchange. The Phlx filed an amendment to the proposal on November 23,
1999.\3\ The Commission is publishing this notice and order 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\ See Letter from Cynthia Hoekstra, Counsel, Phlx to Richard
Strasser, Assistant Director, Division of Market Regulation,
Commission, dated November 22, 1999 (``Amendment No. 1''). The Phlx
originally filed two new Articles to its Certificate of
Incorporation, Article Nineteenth and Article Twentieth. Amendment
No. 1 removes from consideration the adoption of Article Nineteenth.
On November 22, 1999, the Phlx filed SR-Phlx-99-50 proposing the
adoption of Article Nineteenth which provides, in part, that in
addition to all other powers granted to the Phlx Board of Governors
(``Board'') by law, the Certificate of Incorporation or otherwise,
the Board shall have the power to determine whether, and under what
terms and conditions, memberships may be leased, and to adopt by
resolution or to set forth in the Rules of the Board such rules with
respect to leases, lessors and lessees as the Board determines to be
advisable.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
Proposed Article Twentieth would give the Board the power (1) to
assess fees, dues, and other charges upon members, lessors and lessees
of memberships, and holders of permits as the Board may from time to
time adopt by resolution or set forth in the Rules of the Board, and
(2) to assess penalties for failure to pay any fees, dues, or other
charges owed to the Exchange, including cancellation of a membership or
permit and forfeiture of all rights as a member, lessor, lessee, or
holder of a permit. The Board may delegate powers of the Board with
respect to the assessment of fees, dues, other charges, and penalties
to any committee or the Chairman of the Board. The text of the new
Article Twentieth is available at the office of Secretary, the Phlx,
and at the Commission.
II. Self-Regulatory Organization's Statement Regarding the Purpose
of, and the Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item III 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
The purpose of the proposed rule change is to amend the Exchange's
Certificate of Incorporation to provide Phlx's Board the specific
authority to impose fees, dues, and charges upon members, lessors, and
lessees of memberships, and holders of permits. Article Twentieth will
permit the Board to more equitably allocate dues, fees, and charges
among the Exchange's various constituents, thereby ensuring appropriate
distribution of costs relating to maintaining and enhancing the
competitive operations of the Exchange.
For these reasons, the Exchange believes that the proposed rule
change is consistent with section 6(b) \4\ of the Act, in general, and
with section 6(b)(4),\5\ in particular, in that it provides for the
equitable allocation of reasonable dues, fees, and other charges among
its members, issuers, and other persons using its facilities.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that the proposed rule change imposes no
burden on competition.
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 written comments on
the proposed rule change.\6\
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\6\ Written comments were received in response to rule filing
SR-Phlx-99-43 in which Phlx proposed to charge a $1,500 monthly
capital funding fee on each exchange seat owner. On November 17,
1999, the Phlx withdrew SR-Phlx-99-43. On November 26, 1999, the
Phlx filed SR-Phlx-99-49, proposing a three-month pilot of the
$1,500 monthly capital funding fee, and SR-Phlx-99-51, requesting
permanent approval of that proposal. Phlx has also proposed a
monthly credit of up to $1,000 to be applied against certain
fees,dues, charges, and other amounts owed to the Exchange by an
owner who is also a member of the Exchange (SR-Phlx-99-54). In
addition, the Exchange has indicated that it intends to submit rule
filings relating to trading permits.
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III. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609.
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 U.S.C. 552, will be available for inspection and copying in the
Commission's Public Reference Room, 450 Fifth Street, NW, Washington,
DC 20549-0609. Copies of such filing will also be available for
inspection and copying at the principal office of the Phlx. All
submissions should refer to File No. SR-Phlx-99-48 and should be
submitted by [insert 21 days from date of publication].
IV. Commission's Findings and Order Granting Accelerated Approval
of Proposed Rule Change
After careful consideration, the Commission finds, for the reasons
set forth below, that the Phlx's proposal is consistent with the
requirements of the act and the rules and regulations
[[Page 2216]]
thereunder. Specifically, the Commission finds that the proposal is
consistent with Section 6(b)(4) of the Act.\7\ Section 6(b)(4) of the
Act requires that the rules of a national securities exchange provide
for the equitable allocation of reasonable dues, fees, and other
charges among its members and issuers and other persons using its
facilities. The proposal is consistent with Section 6(b)(4) because it
will permit the Phlx Board to more equitably allocate dues, fees, and
other charges among the Exchange's various constituents, thereby
helping to ensure appropriate distribution of costs necessary to
maintain and enhance the competitive operations of the Exchange.
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\7\ 15 U.S.C. 78f(b)(4).
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The Commission finds good cause for approving the proposed rule
change prior to the 30th day after the date of publication of notice
thereof in the Federal Register. The Phlx has represented that to
compete in the current capital market environment the Board must have
specific authority to assess fees, dues, and other charges upon
members, lessors and lessees of memberships, and holders of permits if
and when such permits are proposed by the Phlx and approved by the
Commission.\8\ Article Twentieth provides that authority. In the
context of heightened competition in the options markets the Commission
believes it is important for the Phlx to have the necessary authority
to respond quickly to competitive pressures. Therefore, the Commission
finds good cause for approving the proposed rule change on an
accelerated basis.
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\8\ This approval order should not be interpreted as suggesting
that the Commission is predisposed to approving any pending Phlx
filing to assess fees under the authority of Article Twentieth.
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\9\ that the proposed rule change (SR-Phlx-99-48) is hereby
approved on an accelerated basis. In approving this proposal, the
Commission has considered its impact on efficiency, competition, and
capital formation.\10\
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\9\ 15 U.S.C. 78s(b)(2).
\10\ 15 U.S.C. 78c(f).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-780 Filed 1-12-00; 8:45 am]
BILLING CODE 8010-01-M
