[Federal Register Volume 69, Number 76 (Tuesday, April 20, 2004)]
[Notices]
[Pages 21174-21176]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8891]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-49560; File No. SR-PCX-2004-23]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by
the Pacific Exchange, Inc. Relating to Exchange Fees and Charges
April 13, 2004.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(''Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby given
that on March 24, 2004, the Pacific Exchange, Inc. (``PCX'') 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 the PCX. On April 1, 2004, the PCX filed
Amendment No. 1 to the proposed rule change, which replaces the
original filing in its entirety.\3\ The PCX filed the proposal pursuant
to Section 19(b)(3)(A) of the Act,\4\ and Rule 19b-4(f)(6)
thereunder,\5\ which renders the proposal effective upon filing with
the Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change, as amended, 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 Tania Blanford, Staff Attorney, Regulatory
Policy, PCX, to Nancy J. Sanow, Assistant Director, Division of
Market Regulation (``Division''), Commission, dated March 31, 2004.
In Amendment No. 1, the PCX redesignated the filing from a filing
under subparagraph (f)(2) of Rule 19b-4 to a filing under
subparagraph (f)(6) of Rule 19b-4, as well as made a technical
correction to the rule text. The substance of Amendment No. 1 is
incorporated in this notice.
\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The PCX, through its wholly-owned subsidiary PCX Equities, Inc.
(''PCXE''), proposes to amend its fee schedule for services provided to
ETP Holders \6\ that use the Archipelago Exchange (``ArcaEx'') in order
to correct a technical error in the fee schedule. The text of the
proposed rule change, as amended, is set forth below. Proposed new
language is in italics; proposed deletions are in [brackets].
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\6\ See PCXE Rule 1.1(n) (defining ``ETP Holder'').
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* * * * *
SCHEDULE OF FEES AND CHARGES FOR EXCHANGE SERVICES
ARCHIPELAGO EXCHANGE: TRADE RELATED CHARGES
EXCHANGE TRANSACTIONS
ETP Holders [and Sponsored Participants] \1\
* * * * * * *
ARCHIPELAGO EXCHANGE: OTHER FEES AND CHARGES
* * * * * * *
[USER] ETP HOLDER TRANSACTION CREDIT
* * * * * * *
MARKET DATA REVENUE SHARING CREDIT \2\
Tape A Securities:
Cross Order.................................................... 50% tape revenue credit per qualifying trade
(applicable to any Cross Order, as defined
in PCXE Rule 7.31(s), where the ETP Holder
[or Sponsored Participant] represents all of
one side of the transaction and all or a
portion of the other side).
Tape B Securities:
Liquidity Provider Credit...................................... 50% tape revenue credit per qualifying trade
(applicable to limit orders that are
residing in the Book and that execute
against inbound marketable orders).
Directed Order................................................. 50% tape revenue credit per qualifying trade
(applicable to any market maker that
executes against a Directed Order within the
Directed Order Process, as defined in PCXE
Rule 7.37(a)).
Cross Order.................................................... 50% tape revenue credit per qualifying trade
(applicable to any Cross Order, as defined
in PCXE Rule 7.31(s), where the ETP Holder
[or Sponsored Participant] represents all of
one side of the transaction and all or a
portion of the other side.
[[Page 21175]]
``Drop Copy'' \3\ Processing Fee............................... $0.001 per share (applicable to off-board
trades in listed and Nasdaq securities)
\1\ These transaction fees do not apply to: (1) Directed Orders, regardless of account type, that are matched
within the Directed Order Process; (2) Directed Orders for the account of a retail public customer that are
executed partially or in their entirety via the Directed Order, Display Order, Working Order, and Tracking
Order processes (however, any unfilled or residual portion of a retail customer's order that is routed away
and executed by another market center or participant will incur this transaction fee); (3) orders executed in
the Opening Auction and the Market Order Auction; (4) Cross Orders; (5) commitments received through ITS; and
(6) participants in the Nasdaq UTP Plan that transmit orders via telephone.
\2\ For exchange-listed securities, an ETP Holder [User] that submits a Tracking Order instruction that
subsequently matches against an inbound marketable order will not be entitled to receive the Liquidity
Provider Credit.
\3\ A ``drop copy'' is an electronic report of a transaction for an ETP Holder's account that is executed on
another market center and that has been prepared for informational purposes (e.g., Market Maker inventory
tracking, surveillance audit trail). Market Maker transactions that are subject to this fee will not be
eligible to receive the Market Maker Transaction Credit or [User] ETP Holder Transaction Credit.
* * * * * * *
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 PCX 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
The PCX is proposing to correct a technical error in the fee
schedule by deleting all references to the term ``Sponsored
Participant'' \7\ in the fee schedule. Pursuant to PCXE Rule 2.17, the
PCX imposes certain dues, charges or fees upon an ETP Holder for the
use of equipment or facilities or for services or privileges granted by
the PCX. A Sponsored Participant may obtain authorized access to the
ArcaEx by entering into a customer agreement with an ETP Holder.\8\ The
PCX, however, does not impose any fees, dues or charges on the
Sponsored Participant.
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\7\ See PCXE Rule 1.1(tt) (defining ``Sponsored Participant'').
\8\ See PCXE Rule 7.29.
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Currently, the ``Exchange Transactions'' and ``Market Data Revenue
Sharing Credit'' portions of the fee schedule incorrectly reference
Sponsored Participants as entities billed or credited by the PCX.\9\
Thus, the PCX wishes to delete references to Sponsored Participants in
the fee schedule at this time.
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\9\ Telephone conversation between Tania Blanford, Staff
Attorney, Regulatory Policy, PCX, and Elizabeth MacDonald, Attorney,
Division, Commission, April 13, 2004.
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2. Statutory Basis
The PCX believes that its proposal is consistent with Section 6(b)
of the Act \10\ in general, and furthers the objectives of Section
6(b)(5) of the Act \11\ in particular, in that it is designed to
perfect the mechanisms of a free and open market and a national market
system, and to protect investors and the public interest.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The 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
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 PCX has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \12\ and subparagraph (f)(6) of Rule 19b-4
thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6).
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Because the foregoing proposed rule change does not:
(i) significantly affect the protection of investors or the public
interest;
(ii) impose any significant burden on competition; and
(iii) become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act and Rule
19b-4(f)(6) thereunder. 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.\14\ As required
under Rule 19b-4(f)(6)(iii), the PCX provided the Commission with
written notice of its intent to file the proposed rule change at least
five business days prior to filing the proposal with the Commission, or
such shorter period as designated by the Commission.
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\14\ For the purposes of calculating the 60-day abrogation
period, the Commission considers the proposed rule change to have
been filed on April 1, 2004, the date the PCX filed Amendment No. 1.
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The PCX has requested that the Commission waive the 30-day
operative delay. The Commission believes waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest. Such waiver will permit the PCX to correct a technical error
in its fee schedule and accordingly clarify the fees charged for
services provided to ETP Holders. For these reasons, the Commission
designates the proposal to be effective and operative upon filing with
the Commission.\15\
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\15\ For purposes only of waiving the operative date of this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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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. Comments may be submitted by any of
the following methods:
Electronic comments:
<> Use the Commission's Internet comment form
(http://www.sec.gov/rules/sro.shtml); or
<> Send an E-mail to [email protected] Please
include File Number SR-PCX-2004-23 on the subject line.
Paper comments:
<> Send paper comments in triplicate to Jonathan G.
Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street,
NW., Washington, DC 20549-0609.
[[Page 21176]]
All submissions should refer to File Number SR-PCX-2004-23. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). 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 in the Commission's Public Reference Section, 450 Fifth
Street, NW., Washington, DC 20549. Copies of such filing also will be
available for inspection and copying at the principal office of the
PCX. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-PCX-
2004-23 and should be submitted on or before May 11, 2004.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-8891 Filed 4-19-04; 8:45 am]
BILLING CODE 8010-01-P
