[Federal Register Volume 65, Number 193 (Wednesday, October 4, 2000)]
[Notices]
[Pages 59243-59244]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-25425]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43343; File No. SR-Phlx-00-80]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. To Waive Transaction and Comparison Fees on Customer 
Equity Option Orders.

September 26, 2000.
    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 September 1, 2000, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
or ``Exchange'') filed with the Securities and Exchange 
Commission(``SEC'' or ``Commission'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the Phlx. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Phlx proposes to amend its schedule of dues, fees and charges 
to waive all comparison and transaction charges for customers trading 
equity options. The proposed fee is effective on September 1, 2000.
    The text of the proposed rule change is available at the Phlx and 
the Commission.

[[Page 59244]]

II. Self-Regulatory Organization's Statements Regarding the Purpose 
of, and the Statutory Basis for the Proposed Rule Change

    In its filing with the Commission, the Phlx 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 Phlx 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 the proposed rule change is to amend the Phlx fee 
schedule to waive and eliminate all comparison and transaction charges 
to customers connected with the trading of equity options. \3\
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    \3\ See Phlx Options Rule 1051.
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    Currently, the Phlx imposes both comparison and transaction fees on 
all equity option trades, which vary in amount depending on whether a 
transaction involves a Registered Options Trader (``ROT''), a firm, a 
specialist or a customer. Customer orders electronically executed 
through the Phlx's Automated Options Market (AUTOM) system are entirely 
exempt from both comparison and transaction fees. Customer block orders 
(in certain size categories) are entitled to transaction fee discounts 
up to 25% of the normal charge. Under the proposed rule change all 
charges to ROTs, firms and specialists will remain unchanged.
    The Phlx estimates that annual cost savings for customers will 
approximate $4.5 million based upon year-to-date results through July, 
2000. These proposed fee adjustments are necessary in order to make the 
Phlx's fees more competitive with equivalent fees charged by other 
exchanges and to either maintain or enhance the volume of equity option 
orders placed with the Phlx. These downward adjustments in fee levels 
will also encourage the use of options by the investing public and 
promote competition and efficiencies among exchanges.
    Recently, the American Stock Exchange,\4\ Chicago Board Options 
Exchange \5\ and the Pacific Exchange \6\ have all changed their 
respective rules to eliminate similar equity option fees.
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    \4\ See Securities Exchange Act Release No. 42675 (April 13, 
2000), 65 FR 21223 (April 20, 2000) (eliminating all transaction, 
clearance and floor brokerage fees for all customer equity option 
orders).
    \5\ See Securities Exchange Act Release No. 42850 (May 30, 
2000), 65 FR 36187 (June 7, 2000) (rescinding transaction and trade 
match fees for customer equity option orders routed through its 
electronic order routing system).
    \6\ See Securities Exchange Act Release No. 43115 (August 3, 
2000), 65 FR 49280 (August 11, 2000) (eliminating both the fee for 
all manual executions of customer option orders and the ticket data 
entry fee applicable to all customer option orders). See also 
Securities Exchange Act Release No. 43020 (July 10, 2000), 65 FR 
44558 (July 18, 2000) (eliminating of all transaction charges for 
all forms of electronic executions of customer orders and all on-
line comparison charges for all customer executions).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act \7\ in general and furthers the objectives of 
Section 6(b)(4) of the Act,\8\ in particular, because it provides for 
the equitable allocation of reasonable dues, fees and other charges 
among its Members and others utilizing the Phlx.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Phlx does not believe that the proposed rule change will impose 
any burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Phlx 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 establishes or changes a due, fee or 
charge imposed by the Phlx and, therefore, has become effective upon 
filing pursuant to Rule 19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(2) 
thereunder.\10\ At any time within 60 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 or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purpose of the Act.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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 
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 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 
Phlx. All submissions should refer to File No. SR-Phlx-00-80 and should 
be submitted by October 25, 2000.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 240.30-2(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-25425 Filed 10-3-00; 8:45 am]
BILLING CODE 8010-10-M