[Federal Register Volume 69, Number 25 (Friday, February 6, 2004)]
[Notices]
[Pages 5882-5883]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-2554]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49164; File No. SR-PCX-2004-03]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change and Amendment No. 
1 Thereto by the Pacific Exchange, Inc. Relating to the Extension of a 
Linkage Fee Pilot Program

January 30, 2004.
    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 28, 2004, the Pacific Exchange, Inc. (``Exchange'' or 
``PCX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. On January 
30, 2004, the PCX filed Amendment No. 1 to the proposed rule change.\3\ 
The Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, from interested persons and is 
approving the proposed rule change, as amended, on an accelerated 
basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Steven B. Matlin, Senior Counsel, Regulatory 
Policy, PCX to Nancy Sanow, Assistant Director, Commission, dated 
January 29, 2004 (``Amendment No. 1''). In Amendment No. 1, the 
Exchange proposes to make technical corrections to the Schedule of 
Fees and Charges for Exchange Services, originally submitted as 
Exhibit A to the proposed rule change.
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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 amend its Schedule of Fees and Charges 
For Exchange Services to extend until July 31, 2004 the current pilot 
program regarding transaction fees charged for trades executed through 
the options intermarket linkage (``Linkage'').\4\
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    \4\ See Securities Exchange Act Release No. 47786 (May 2, 2003), 
68 FR 24779 (May 8, 2003) (SR-PCX-2003-08) (order approving pilot 
program).
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    The proposed fee schedule is available at the Exchange 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 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 III below. The Exchange 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 purpose of this proposed rule change is to extend for six 
months the pilot program establishing PCX fees for Principal (``P'') 
Orders and Principal Acting as Agent (``P/A'') Orders executed through 
Linkage. The fees currently are effective for a pilot program scheduled 
to expire on January 31, 2004, and this filing would extend the fees 
through July 31, 2004. The two fees the PCX charges for P and P/A 
Orders are: the $.21 per contract side basic execution fees for trading 
on the PCX and a $.05 comparison fee per contract side. These are the 
same fees that all Exchange Members pay for non-customer transactions 
executed on the PCX. The Exchange does not charge for the execution of 
Satisfaction Orders sent through Linkage and is not proposing to charge 
for such orders.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act,\5\ in general, and Section 6(b)(4)\6\, in particular, 
in that it provides for the equitable allocation of dues, fees

[[Page 5883]]

and other charges among its members and other persons using its 
facilities for the purpose of executing P/A Orders or P Orders that are 
routed to the Exchange from other market centers.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 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 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

    No written comments were solicited or received with respect to the 
proposed rule change.

III. 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. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. 
Comments may also be submitted electronically at the following e-mail 
address: <a href="/cdn-cgi/l/email-protection#4c3e392029612f2321212922383f0c3f292f622b233a"><span class="__cf_email__" data-cfemail="92e0e7fef7bff1fdfffff7fce6e1d2e1f7f1bcf5fde4">[email protected]</span></a>. All comment letters should refer to 
File No. SR-PCX-2004-03. 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, comments should be sent in 
hardcopy or by e-mail but not by both methods. 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 Room. Copies of such filing will also be available for 
inspection and copying at the principal office of the Exchange. All 
submissions should be submitted by February 26, 2004.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change and Amendment No. 1

    After careful consideration, the Commission finds that the proposed 
rule change, as amended, is consistent with the requirements of the Act 
and the rules and regulations thereunder, applicable to a national 
securities exchange,\7\ and, in particular, with the requirements of 
section 6(b) of the Act \8\ and the rules and regulations thereunder. 
The Commission finds that the proposed rule change, as amended, is 
consistent with Section 6(b)(4) of the Act,\9\ which requires that the 
rules of the Exchange provide for the equitable allocation of 
reasonable dues, fees, and other charges among its members and other 
persons using its facilities. The Commission believes that the 
extension of the Exchange's Linkage fee pilot program until July 31, 
2004 will give the Exchange and the Commission further opportunity to 
evaluate whether such fees are appropriate.
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    \7\ In approving this rule, the Commission notes that it has 
considered its impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
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    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\10\ for approving the proposed rule change, as amended, prior 
to the thirtieth day after the date of publication of the notice of the 
filing thereof in the Federal Register. The Commission believes that 
granting accelerated approval of the proposed rule change, as amended, 
will preserve the Exchange's existing pilot program for Linkage fees 
without interruption as the PCX and the Commission further consider the 
appropriateness of Linkage fees.
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    \10\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-PCX-2004-03), as amended, is 
hereby approved on an accelerated basis for a pilot period to expire on 
July 31, 2004.
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    \11\ Id.
    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-2554 Filed 2-5-04; 8:45 am]
BILLING CODE 8010-01-P


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