[Federal Register Volume 63, Number 209 (Thursday, October 29, 1998)]
[Notices]
[Pages 58082-58083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29008]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40590; File No. SR-PCX-98-49]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc.
Relating to Specialist Post Fee Waiver Program Amendments
October 22, 1998.
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 24, 1998, as amended on October 13, 1998,\3\ the Pacific
Exchange, Inc. (``PCX'' or ``Exchange'') filed with the Securities and
Exchange Commission (``Commission'' or ``SEC'') the proposed rule
change as described in Items I, II and III below, which Items have been
prepared by the Exchange. 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\ See Letter from Michael Pierson, Senior Attorney, PCX, to
Joshua Kans, Attorney, Division of Market Regulation, Commission,
dated October 13, 1998 (``Amendment No. 1''). Amendment No. 1
eliminated a proposal to permit the Exchange's Executive Committee
to determine whether to allow otherwise eligible specialists to
participate in the Specialist Post Fee Waiver Program. Amendment No.
1 also clarified the scope of the rule change's future effect, and
clarified the Exchange's justification for the rule change's
immediate effectiveness.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Exchange is proposing to modify its Specialist Post Fee Waiver
Program (``Program'') by adding a requirement that any participating
firm must remain in the Program for a minimum of six months or forego
the benefits it has received during its participation in the Program.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it 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
On February 19, 1998, the Exchange's Specialist Post Fee Waiver
Program became effective upon filing.\4\ The Program is intended to
provide financial incentives and short-term cost relief for specialist
firms that are approved by the Exchange to operate specialist posts
that will no longer be operated by another firm. Under the Program, if
a specialist firm is approved to assume financial and operational
responsibility for a specialist post, the specialist firm's fixed
specialist fees are waived for three months. The Program also allows
participating specialist firms to earn fee credits, based on monthly
trading
[[Page 58083]]
volumes, once the original three months have passed and the firm's
fixed specialist fees have been reinstated. These fee credits, which
are available for three months, are intended to serve as incentives for
specialist firms to bring equity order flow to the Exchange.
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\4\ See Exchange Act Release No. 39745 (March 12, 1998), 63 FR
13440 (March 19, 1998) (notice of filing and immediate effectiveness
of SR-PCX-98-11).
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The Exchange is proposing to modify the Program so that a
specialist firm would need to maintain financial and operational
responsibility for the new post for a minimum of six months in order to
receive fee credits or fee waivers under the Program. This requirement
is intended to assure that firms will not take on a new post for less
than six months and then abandon it after having received the Program
benefits. Accordingly if the Exchange approves a firm for participation
in the Program, and the firm abandons the post before six months have
passed, the firm will be obligated to pay the fixed specialist fees
that otherwise would have applied while the firm was responsible for
the post.
The Exchange notes that the terms of this rule filing will only
apply to specialist firms that provide new backing to a specialist post
under the Program after the effective date of this rule filing.
(2) Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Act,\5\ in general, and furthers the objectives of
Section 6(b)(5),\6\ in particular, in that it is designed to promote
just and equitable principles of trade and to protect investors and the
public interest. The Exchange also believes that the proposal is
consistent with Section 6(b)(4) of the Act \7\ in that it is designed
to provide for the equitable allocation of dues, fees and other charges
among its members.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
\7\ 15 U.S.C 78f(b)(4).
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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 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
Written comments on the proposed rule change were neither solicited
nor received.
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 \8\ and subparagraph (e)(2) of Rule 19b-4
thereunder \9\ because it is establishing or changing a due, fee or
other charge. At any time within 60 days of the filing of such 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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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(e)(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.\10\ Persons making written
submissions should file six copies thereof with the Secretary,
Securities and Exchange Commission, 450 Fifth Street, NW., Washington,
DC 20549. 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
provisions of 5 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. Copies of such filing will also be available
for inspection and copying at the principal office of the PCX. All
submissions should refer to File No. SR-PCX-98-49 and should be
submitted by November 19, 1998.
\10\ In reviewing these rules, the Commission has considered the
proposed rule change's impact on efficiency, competition and capital
formation. 15 U.S.C. 78c(f).
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-29008 Filed 10-28-98; 8:45 am]
BILLING CODE 8010-01-M
