[Federal Register Volume 64, Number 150 (Thursday, August 5, 1999)]
[Notices]
[Pages 42746-42747]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20175]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41670; File No. SR-SCCP-99-02]
Self-Regulatory Organizations; Stock Clearing Corporation of
Philadelphia; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to Fees
July 29, 1999.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on June 25, 1999, Stock
Clearing Corporation of Philadelphia (``SCCP'') 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 primarily by SCCP. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested parties.
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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
Under the proposed rule change, SCCP will adopt fees for trade
recording of transactions conducted through the Volume Weighted Average
Price (``VWAP'') \2\ Trading System
(``VTS''TM).\3\ SCCP is not proposing to adopt a transaction
value charge on VTS transactions.
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\2\ VWAP is a registered trademark of the Universal Trading
Technologies Corporation (``UTTC'').
\3\ The VTS trademark is the property of UTTC.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, SCCP 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. SCCP has prepared summaries, set forth in sections (A),
(B) and (C) below, of the most significant aspects of these
statements.\4\
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\4\ The Commission has modified the text of the summaries
prepared by SCCP.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The Commission approved VTS on March 24, 1999.\5\ VTS will provide
a daily preopening matching session for the execution of large-sized
stock orders at the VWAP. Philadelphia Stock Exchange (``Phlx'') Rule
237 governs the operation of VTS. During the session, VTS will
electronically match orders for execution at the VWAP according to the
algorithm developed by UTTC. The matched and executed orders will be
assigned a final VWAP after the close of regular trading. VTS will
operate as a facility of the Phlx under Section 3(a)(2) of the Act.\6\
Specifically, the System will involve some Phlx equipment and
personnel, allow floor trader participation, and rely upon SCCP to
process system trades. Matches performed during the session will be
regulated and reported as Phlx trades.\7\ SCCP will process VTS trades
just like any other Phlx equity trade.
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\5\ Securities Exchange Act Release No. 41210 (March 24, 1999),
64 FR 15857 [SR-Phlx-96-14].
\6\ 15 U.S.C. 78c(a)(2).
\7\ Matches performed by VTS will be subject to fees established
in Phlx's fee schedule. Securities Exchange Act Release No. 41646
(July 23, 1999( [SR-Phlx-99-21].
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SCCP proposes to charge $0.30 per side for trade confirmation
services performed by SCCP. VTS trades are processed for clearing
through SCCP just like a Phlx equity floor trade and will be recorded
and confirmed like any other trade pursuant to SCCP Rule 6. Therefore,
SCCP believes that it is reasonable to charge recording fee of $.30 per
side for the confirmation and recording of trades conducted through
VTS. This is the current trade recording fee applicable to Phlx
Automated Communication and Execution System (``PACE'') trades.\8\
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\8\ See Phlx Rule 229.
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Second, SCCP proposes that it will not charge a transaction value
charge (value fee) for trades conducted through VTS in order to
encourage the use of VTS for large value transactions. This is also
similar to SCCP's fees for PACE trades where no value fee is charged.
For these reasons, SCCP believes that the proposal constitutes a
equitable allocation of reasonable dues, fees and other charges,
pursuant to Section 17A(b)(3)(D) of the Act.\9\
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\9\ 15 U.S.C. 78q-1(b)(3)(D).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
SCCP 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
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) \10\ of the Act and Rule 19b-4(f)(2) \11\ promulgated
thereunder because the proposal establishes or changes a due, fee, or
other charge imposed by SCCP. At any time within sixty 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 to appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act.
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\10\ 15 U.S.c. 78s(b)(3)(A)(ii).
\11\ 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
[[Page 42747]]
arguments concerning the foregoing, including whether the proposed rule
change 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 20549-0609.
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 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
Commissions' 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 SCCP. All submissions
should refer to File No. SR-SCCP-99-02 and should be submitted by
August 26, 1999.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-20175 Filed 8-4-99; 8:45 am]
BILLING CODE 8010-01-M
