[Federal Register Volume 65, Number 114 (Tuesday, June 13, 2000)]
[Notices]
[Pages 37190-37191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-14820]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42872; File No. SR-Amex-00-18]


Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Granting Accelerated Approval of Proposed Rule Change to Raise Equity 
Options Transaction Fees for Non-Member Broker-Dealers

May 31, 2000.

I. Introduction

    On April 7, 2000, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change was published for comment in the 
Federal Register on May 10, 2000.\3\ The Commission received no 
comments on the proposal. This order grants accelerated approval of the 
proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 42752 (May 3, 2000), 
65 FR 30154.
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II. Description of the Proposal

    The Amex proposes to increase equity options transaction fees for 
non-member broker-dealer orders. The Amex currently imposes a 
transaction charge on options trades executed on the Exchange. The 
charges vary depending on whether the transaction involves an equity or 
index option and whether the transaction is executed for a specialist 
or market maker account, a member firm's proprietary account, a non-
member broker-dealer, or a customer account. The Amex also imposes a 
charge for clearance of options trades and an options floor brokerage 
charge, which also depends upon the type of account for which the trade 
is executed. In addition, all three types of charges--transactions, 
options clearance, and options floor brokerage--are subject to caps on 
the number of options contracts subject to the charges on a given 
day.\4\
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    \4\ The current caps are set at 2,000 contracts for customer 
trades and 3,000 contracts for member firm proprietary, non-member 
broker-dealer, specialist, and market maker trades.
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    Recently, the Amex eliminated all options transaction, clearance, 
and floor brokeage fees for customer equity options orders.\5\ To 
offset the elimination of these fees for customer equity options 
orders, the Exchange raised the equity options transaction fee

[[Page 37191]]

from $0.07 to $0.19 per contract side for member firm proprietary 
orders and from $0.08 to $0.17 per contract side for specialist and 
market maker orders. To further offset the elimination of options 
transaction, clearance and brokerage fees for customer equity option 
orders, the Exchange proposes to increase the equity options 
transaction fee for non-member broker-dealer orders from $0.07 to $0.19 
per contract side. This revised fee will also apply to both LEAPS \6\ 
and FLEX \7\ options. Equity options clearance and floor brokerage fees 
for non-member broker-dealers will remain unchanged at $0.04 and $0.03 
per contract side, respectively.
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    \5\ See Securities Exchange Act Release No. 42675, (April 13, 
2000), 65 FR 21223 (April 20, 2000).
    \6\ LEAPS are Long Term Equity Anticipation Securities or 
options with durations of up to 36 months. See Amex Rule 903c.
    \7\ FLEX options are customized options with individually 
specified terms such as strike price, expiration date, and exercise 
style. See Amex Rule 900G.
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III. Discussion

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange and in 
particular, with the requirements of Section 6 of the Act.\8\ 
Specifically, the Commission finds that the proposal is consistent with 
Section 6(b)(4) of the Act, which requires a registered national 
securities exchange to promulgate rules that provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and other persons using its facilities.\9\ The Commission 
believes that the proposed increase in the equity options transaction 
fee for non-member broker-dealer orders is not unreasonable and should 
not discriminate unfairly among market participants. In addition, the 
Commission notes that member firm proprietary orders are charged the 
same options transaction fee as is proposed for non-member proprietary 
orders.
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    \8\ 15 U.S.C. 78f. In approving this rule, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b)(4).
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    The Commission finds good cause for approving the proposed rule 
change prior to the thirtieth day after the date of publication of 
notice thereof in the Federal Register. Approval of the proposal will 
enable the Exchange to offset the recent elimination of options 
transaction, clearance, and floor brokerage fees for customer equity 
options orders in an expeditious manner. The Commission notes that the 
Exchange recently raised the equity options transaction fee for member 
firm proprietary orders to help offset the elimination of options 
transaction, clearance, and floor brokerage fees for customer equity 
options orders, and no comments were received on that proposal.\10\ 
Therefore, the Commission believes it is consistent with Section 
6(b)(5) and Section 19(b)(2) of the Act to grant accelerated approval 
to the proposed rule change.\11\
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    \10\ See Securities Exchange Act Release No. 42675, (April 13, 
2000), 65 FR 21223 (April 20, 2000) (approving SR-Amex-00-15).
    \11\ 15 U.S.C. 78f(b)(5) and 78s(b)(2).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\12\ that the proposed rule change (SR-Amex-00-18) is approved.
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    \12\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-14820 Filed 6-12-00; 8:45 am]
BILLING CODE 8010-01-M