[Federal Register Volume 61, Number 213 (Friday, November 1, 1996)]
[Notices]
[Pages 56597-56598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28076]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37874; File No. SR-PSE-96-38]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Pacific Stock Exchange
Relating to Transaction Fees
October 28, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on October 15, 1996, the
Pacific Stock Exchange, Inc. (``PSE'' 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 self-regulatory organization. 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The PSE hereby is proposing to adopt a new charge applicable to
Lead Market Makers (``LMMs'') who participate in the Exchange's LMM
Book Pilot 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 PSE 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 PSE 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
On March 29, 1996, the Exchange filed a proposal with the
Commission to adopt a pilot program under which a limited number of
LMMs would be able to assume operational responsibility for the options
public limit order book (``Book'') in a limited number of issues
(``Book Pilot Program'').\2\ The Commission approved the Book Pilot
Program as a one year pilot program on October 11, 1996.\3\ Under the
Book Pilot Program, the designated LMMs manage the Book function, take
responsibility for trading disputes and errors, set rates for book
execution, and pay the Exchange a fee for staffing and services. The
Book Pilot Program has been implemented on a limited basis, and will
involve no more than three LMMs and/or forty option symbols during the
one year pilot phase. During the pilot phase, the Exchange is providing
staffing to assist the LMM in the management of the Book function.
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\2\ Securities Exchange Act Release No. 37335 (June 19, 1996),
61 FR 33568.
\3\ Securities Exchange Act Release No. 37810 (October 11,
1996).
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The Exchange is now proposing to amend its Schedule of Rates to
establish a staffing charge to LMMs who participate in the Book Pilot
Program. The proposed charge is $.50 per contract for each contract
executed by the Book under the Book Pilot Program. LMMs would be
subject to a minimum monthly charge of $200 and a maximum monthly
charge of $16,000 for all issues in which the LMM is participating in
the Book Pilot Program.
The proposed charge is intended to cover the Exchange's cost of
providing staff who will assist the LMM in operating the Book during
the Book Pilot Program.
The Exchange believes that the proposed rule change is consistent
with Section 6 \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 charges among its members and persons using its facilities.
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\4\ 15 U.S.C. 78f.
\5\ 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 unnecessary or inappropriate
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 were neither solicited nor received with respect
to the proposed rule change.
[[Page 56598]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change establishes or changes a due, fee, or
other charge imposed by the Exchange and, therefore, has become
effective pursuant to Section 19(b)(3)(A) of the Act and subparagraph
(e) of Rule 19b-4 thereunder.\6\ 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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\6\ 15 U.S.C. 78s(b)(3)(A) and 17 CFR 19b-4(e).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 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 the provisions
of 5 U.S.C. 552, will be available for inspection and copying at the
Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such filing will also be available
for inspection and copying at the principal office of the Exchange. All
submissions should refer to File No. SR-PSE-96-38 and should be
submitted by November 22, 1996.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-28076 Filed 10-31-96; 8:45 am]
BILLING CODE 8010-01-M
