[Federal Register Volume 64, Number 22 (Wednesday, February 3, 1999)]
[Notices]
[Pages 5336-5337]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2535]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40959; File No. SR-PCX-98-65]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc.
Relating to Rescission of Fee Assessment for New Facilities
January 22, 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 January 15, 1999, the Pacific Exchange, Inc. (``PCX'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by PCX.\3\ The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ The filing was submitted January 4, 1999, however, the PCX
amended the filing after it was submitted. Therefore the effective
date of the filing is January 15, 1999. See letter from Robert P.
Pacileo, Staff Attorney, PCX, to Mike Walinskas, Deputy Associate
Director, SEC, dated January 14, 1999.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
PCX is proposing to rescind the special assessment that was
approved in January 1998. The assessment, which applied to each of the
552 PCX memberships, was intended to provide an equity base to fund new
facilities to house the Exchange's new trading floor, technology
facilities, associated office space and equipment.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, PCX included statements
concerning the purpose of, and basis for, the fee 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.
PCX has prepared summaries, set forth in sections A, B, and C below, of
the most significant aspects of such statements.
[[Page 5337]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Background: The Exchange received approval by the Commission to
assess the 552 PCX memberships $36,000, to be paid by each membership
in monthly installments of $1,000 per month.\4\ In the original
proposal, the Exchange stated that ``the purpose of the assessment is
to provide an equity base to finance land and facilities to house the
Exchange's new trading floors, technology facilities, associated office
space and equipment.'' In addition, the Exchange proposed that the
amount raised would serve as an equity base to aid in the process of
obtaining additional financing.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 39945 (May 1, 1998),
63 FR 25891 (May 11, 1998).
---------------------------------------------------------------------------
Proposed Fees: The Exchange proposes to rescind its $36,000 special
assessment of each of its 552 memberships. The Exchange proposes this
rescission for several reasons including: significant and rapid changes
in the industry, the entry of new, well-capitalized competitors, the
introduction of electronic trading, and other technological
enhancements. The Exchange believes that it must use its technological,
staff, and financial resources to aggressively respond to competitive
pressures, but it has been able to alter its facility requirements.
Although the Exchange still needs to expand and renovate its trading
facilities, technological enhancements will allow it to do so in a less
costly manner than the facilities proposed in the original filing.\5\
In conjunction with rescinding the assessment, the Exchange intends to
refund all payments collected as part of the assessment from the owners
of its 552 memberships.
---------------------------------------------------------------------------
\5\ Id.
---------------------------------------------------------------------------
2. Statutory Basis
The fee change is consistent with Section 6(b) \6\ of the Act in
general and furthers the objectives of Section 6(b)(4) \7\ in
particular because it provides for the equitable allocation of
reasonable dues, fees, and other charges among its members.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
PCX 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
PCX 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, which establishes or changes a due, fee,
or other charge applicable to members of the Exchange, has become
effective pursuant to Section 19(b)(3)(A) of the Act,\8\ and
subparagraph (e)(2) of Rule 19b-4 thereunder.\9\ At any time within 60
days of the filing of the 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.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(e)(2).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the foregoing 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. Copies of the
submission, all subsequent amendments, all written statements with
respect to the rule change that are filed with the Commission, and all
written communications relating to the 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 will also be available for
inspection and copying at the principal office of the PCX. All
submissions should refer to File No. SR-PCX-98-65 and should be
submitted by February 24, 1999.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-2535 Filed 2-2-99; 8:45 am]
BILLING CODE 8010-01-M
