[Federal Register Volume 63, Number 220 (Monday, November 16, 1998)]
[Notices]
[Pages 63766-63767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-30497]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40644; File No. SR-PCX-98-44]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change and Amendment No. 1 to the
Proposed Rule Change by the Pacific Exchange, Inc. Relating to Fees for
the Use of Exchange-Sponsored Hand Held Terminals for Options Floor
Brokers
November 5, 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 11, 1998, the Pacific Exchange, Inc. (``PCX'' 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. On October 29, 1998, the Exchange filed Amendment No. 1 to
the proposal.\3\ 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 Robert Pacileo, Staff Attorney, Regulatory
Policy, PCX, to David Sieradzki, Attorney, Division of Market
Regulation, SEC dated October 27, 1998 (``Amendment No. 1''). In
Amendment No. 1. the Exchange clarifies the proposal to indicate
that these fees are for exchange-sponsored hand held terminals only.
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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 change its Schedule of Fees and
Charges for Exchange Services by adding charges for the use of
exchange-sponsored hand held terminals for options floor brokers.
The text of the proposed rule change is available at the Office of
the Secretary, PCX and at the Commission.
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 PCX 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
Background. With the use of hand held terminals, PCX Member Firms
have the advantage of sending their orders electronically to either (1)
a floor broker's exchange-sponsored terminal located in the trading
crowd; \4\ (2) a Member Firm booth located on the trading floor; or (3)
to POETS,\5\ where they will be automatically executed by Auto-Ex \6\
or maintained in Auto-Book.\7\
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\4\ See Securities Exchange Act Release No. 39970 (May 7, 1998),
63 FR 26662 (May 13, 1998) (Order approving File No. SR-PCX-97-28).
\5\ The Pacific Option Exchange Trading System (``POETS'') is
the Exchange's automated options trading system. See generally
Securities Exchange Act Release No. 27633 (Jan. 18, 1990), 55 FR
2466 (Jan. 24, 1990) (Order approving File No. SR-PSE-89-26).
\6\ Orders executed by Auto-Ex may be automatically executed at
the disseminated bid or offering price. Id.
\7\ Auto-Book maintains non-marketable limit orders based on
limit price and time of receipt. Id.
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Proposal. The Exchange proposes to charge a monthly equipment fee
of $200 for each exchange-sponsored hand held terminal to be billed to
the Floor Broker registered to use it. In addition, the Exchange
proposes to charge $0.03 per contract for orders of 10 contracts or
less which are not directed to POETS through a Member Firm Interface
(``MFT''),\8\ and are executed via the exchange-sponsored hand held
terminal. This per contract charge will be billed to the order flow
provider.
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\8\ The MFI is an electronic order delivery and reporting system
that allows member firms to route orders for execution by the
automatic execution feature of POETS as well as to route limit
orders to the Options Public Limit Order Book. Orders that do not
reach those two destinations are defaulted to a member firm booth.
MFI also provides member firms with instant confirmation of
transactions to their systems.
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) \9\ of the Act, in general, and furthers the objectives of
Section 6(b)(4),\10\ in particular, because it provides for the
equitable allocation of reasonable dues, fees, and other charges among
its members and issuers and other persons using its facilities.
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\9\ 15 U.S.C. 78f(b).
\10\ 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 inappropriate 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.
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 and, therefore, has become effective pursuant to Section
19(b)(3)(A) of the Act \11\ and subparagraph (e)(2) of Rule 19b-4
thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(e)(2).
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At any time within 60 days of the filing of the amended 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 and Amendment No. 1 are consistent with the Act. 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 Room. Copies of such
filing also will be available for inspection and copying at the
principal office of the Exchange.
[[Page 63767]]
All submissions should refer to File No. SR-PCX-98-44 and should be
submitted by December 1, 1998.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-30497 Filed 11-13-98; 8:45 am]
BILLING CODE 8010-01-M
