[Federal Register Volume 64, Number 222 (Thursday, November 18, 1999)]
[Notices]
[Pages 63098-63099]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30086]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-42122; File No. SR-Phlx-99-34]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Philadelphia Stock
Exchange, Inc. To Amend Registration Fees for Registered
Representatives
November 10, 1999.
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 August 26, 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. On October 25, 1999, the Phlx submitted to the Commission
Amendment No. 1 to the proposed rule change.\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 Jurij Trypupenko, Counsel, Phlx to Sharon
Lawrence, Senior Special Counsel, Division of Market Registration
(``Division''), Commission, dated October 21, 1999 (``Amendment No.
1''). Amendment No. 1 clarifies the purpose for the increase in
fees, the date on which the proposed fee increase will take effect,
and the NASD's role in billing and collecting the fees for the
Exchange. Because Amendment No. 1 is substantive, the Commission
deems the date of the filing to be October 25, 1999, the date of the
amendment was filed with the Commission.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Exchange proposes to amend its fee schedule for Registered
Representative registration. Specifically, the initial, maintenance,
and transfer registration fees pertaining to Registered Representative
registration will each be increased to $25.00, effective January 1,
2000. The text of the proposed rule change is available at the Phlx 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 Phlx 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 Phlx 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 Exchange proposes to increase its fees for the initial
registration, maintenance, and transfer of Registrated registrations
with the Exchange from $12.00 to $25.00. These fees, which were adopted
in 1993,\4\ and subsequently adjusted in 1995 \5\ and 1997,\6\ are
payable by member organizations that apply for, maintain, and transfer
Registered Representative registrations. The proposed fee increase
would become effective January 1, 2000, and would apply to Registered
Representative fees incurred on or after that date. Therefore, any
initial registration filed in 1999 would be subject to the current
$12.00 initial registration fee. Similarly, any maintenance or transfer
fees incurred in 1999 would be subject to the current $12.00
maintenance or transfer fee. The National Association of Securities
Dealers, Inc. (``NASD'') will bill for the year 2000 fees in November
1999 and, thereafter, will collect the fees for the Exchange.\7\
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\4\ Securities Exchange Act Release No. 32833 (September 14,
1993), 58 FR 48922 (September 20, 1993).
\5\ Securities Exchange Act Release No. 36348 (October 6, 1995),
60 FR 53450 (October 13, 1995).
\6\ Securities Exchange Act Release No. 39044 (September 10,
1997), 62 FR 48914 (September 17, 1997).
\7\ The Exchange represents that initial, transfer, and
maintenance Registered Representatives fees have traditionally been
billed and collected by the NASD. The NASD would continue to bill
for and collect these fees under the proposed rule change. Phone
message from Jurij Trypupenko, Counsel, Phlx, to Melinda Diller, Law
Clerk, Division, Commission, on October 28, 1999.
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The purpose of the proposed rule change is to address increased
costs associated with maintaining survelliance and regulatory programs
in a sophisticated trading environment. The Exchange continues to
believe that strong survelliance and regulatory
[[Page 63099]]
programs are essential for the Exchange to maintain a fair and orderly
market for the investment community.
According to the Exchange, general costs associated with the
Exchange's surveillance and regulatory programs have continued to rise.
Since the last Registered Representatives fee increase in 1997,\8\
costs associated with the Exchange's surveillance and regulatory
programs have increased in excess of 100%, a ten-fold increase over the
increase in costs during the prior two-year period.\9\ This increase in
costs is attributable to, among other things, inflationary and
competitive affects on the cost of staffing, equipment, and technology
and expansion of the Exchange's surveillance and regulatory
programs.\10\ Moreover, the Exchange has listed, and will likely to
continue to list, new issues and products, which may trigger
significant additional surveillance and regulatory costs.\11\
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\8\ See note 6, supra.
\9\ See Amendment No. 1, supra note 3.
\10\ Id.
\11\ Id.
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2. Statutory Basis
For these reasons, the Exchange believes the proposed rule change
is consistent with Section 6 of the Act, \12\ in general, and furthers
the objectives of Sections 6(b)(4) of the Act \13\ in particular, in
that it provides for the equitable allocation of reasonable dues, fees,
and other charges among its members and other persons using its
facilities. \14\
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\12\ 15 U.S.C. 78f.
\13\ 15 U.S.C. 78f(b)(4).
\14\ In reviewing this proposal, the Commission has considered
its impact on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
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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 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 neither solicited nor received written comments with
respect to the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
Because the foregoing rule change establishes or changes a due,
fee, or charge imposed by the Exchange, it has become effective
pursuant to Section 19(b)(3)(A)(ii) of the Act \15\ and subparagraph
(f)(2) of Rule 19b-4 thereunder.\16\ The Exchange intends to implement
the fee, effective January 1, 2000. 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.
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\15\ 15 U.S.C. 78s(b)(3)(A)(ii).
\16\ 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, as amended, is 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,
DC 20549-0609. Copies of the submission, all subsequent amendments, all
written statements with respect to the amended 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 principal office of the Phlx. All submissions should refer to
File No. SR-Phlx-99-34 and should be submitted by December 9, 1999.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-30086 Filed 11-17-99; 8:45 am]
BILLING CODE 8010-01-M
