27610 Federal Register / Vol. 68, No. 97 / Tuesday, May 20, 2003 / Notices 

6 In approving this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition and capital formation. 15 

U.S.C. 78c(f).

7 15 U.S.C. 78s(b)(2).

8 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3 17 CFR 240.19b–4(f)(6).

4See letter from Richard S. Rudolph, Director and 

Counsel, Phlx, to Deborah Lassman Flynn, Assistant 

Director, Division of Market Regulation, 

Commission, dated April 4, 2003 (‘‘Amendment No. 

1’’). In Amendment No. 1, Phlx deleted certain 

proposed language stating that ‘‘[t]he minimum 

guaranteed AUTO–X size is 1 contract, and the 

current maximum AUTO–X size is 250 contracts, 

except for QQQ options’’; retained current language 

that the minimum and maximum guaranteed 

AUTO–X sizes for each option will be posted in the 

Phlx’s website; and retained current language that 

there be a minimum guaranteed AUTO–X size and 

maximum guaranteed AUTO–X size, as determined 

by the specialist and subject to approval of the 

Options Committee.

5AUTOM is the Exchange’s electronic order 

delivery, routing, execution and reporting system, 

which provides for the automatic entry and routing 

of equity option and index option orders to the 

Exchange trading floor. Orders delivered through 

AUTOM may be executed manually, or certain 

orders are eligible for AUTOM’s automatic 

execution feature, AUTO–X. Equity option and 

index option specialists are required by the 

Exchange to participate in AUTOM and its features 

and enhancements. Option orders entered by 

Exchange members into AUTOM are routed to the 

appropriate specialist unit on the Exchange trading 

floor. See Exchange Rule 1080.

6The Nasdaq-100, Nasdaq-100 Index, 

Nasdaq, The Nasdaq Stock Market, Nasdaq-100 

SharesSM, Nasdaq-100 TrustSM, Nasdaq-100 Index 

Tracking StockSM, and QQQSM are trademarks or 

service marks of Nasdaq and have been licensed for 

use for certain purposes by the Philadelphia Stock 

Exchange pursuant to a License Agreement with 

Nasdaq. The Nasdaq-100 Index (the Index) is 

determined, composed, and calculated by Nasdaq 

without regard to the Licensee, the Nasdaq-100 

TrustSM, or the beneficial owners of Nasdaq-100 

SharesSM. Nasdaq has complete control and sole 

discretion in determining, comprising, or 

calculating the Index or in modifying in any way 

its method for determining, comprising, or 

calculating the Index in the future.

7See Securities Exchange Act Release No. 46531 

(September 23, 2002), 67 FR 61370 (September 30, 

2002) (SR–Phlx–2002–47).

public interest.6 The Commission 

believes that requiring LMMs to step up 

one tick to match the NBBO in the most 

highly traded options series should 

increase the ability of investors to gain 

access to the best bids and offers 

available in those options series.

IV. Conclusion 

For all of the aforementioned reasons, 

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. 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act,7 that the 

proposed rule change (SR–PCX–2002–

54), as amended, is approved.

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.8

Margaret H. McFarland, 

Deputy Secretary.

[FR Doc. 03–12610 Filed 5–19–03; 8:45 am] 

BILLING CODE 8010–01–P

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–47646; File No. SR–Phlx–

2003–18] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change and 

Amendment No. 1 Thereto by the 

Philadelphia Stock Exchange, Inc. 

Relating to Equal Firm Quotation Size 

and AUTO–X Guarantees for Customer 

and Broker-Dealer Orders 

April 8, 2003.

Editorial Note: Due to numerous footnote 

errors, this document is being reprinted in its 

entirety. It was originally printed in the 

Federal Register on Monday, April 14, 2003 

at 68 FR 17976–17979.

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 March 20, 

2003, the Philadelphia Stock Exchange, 

Inc. (‘‘Exchange’’ or ‘‘Phlx’’) 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 

proposed rule change has been filed by 

the Phlx as a ‘‘non-controversial’’ rule 

change under Rule 19b–4(f)(6) under the 

Act.3 On April 7, 2003, the Phlx filed 

Amendment No. 1 to the proposed rule 

change.4 The Commission is publishing 

this notice to solicit comments on the 

proposed rule change, as amended, from 

interested persons.

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Phlx proposes to implement an 

options program to be firm for, and to 

automatically execute eligible orders 

against, the Exchange’s disseminated 

size for both customer and broker-dealer 

orders. Specifically, the Exchange 

proposes to amend Exchange Rule 1082, 

Firm Quotations, to provide that all 

Phlx options quotations would be firm 

for all incoming customer and brokerdealer orders for their full disseminated 

size. 

The Exchange further proposes to 

amend Exchange Rule 1080, 

Philadelphia Stock Exchange 

Automated Options Market (AUTOM) 

and Automatic Execution System 

(AUTO–X),5 to provide automatic 

executions for eligible customer and offfloor broker-dealer orders up to the 

Exchange’s disseminated size, subject to 

a maximum guaranteed AUTO–X size of 

250 contracts. Options on the Nasdaq100 Index Tracking Stock (‘‘QQQ’’SM) 6

would continue to have a maximum 

guaranteed AUTO–X size of 2,000 

contracts in the first two near term 

expiration months, and 1,000 contracts 

for all other expiration months.7

Below is the text of the proposed rule 

change. Proposed new language is in 

italics; proposed deletions are in 

brackets.

* * * * *

Firm Quotations 

Rule 1082. (a) No change. 

(b) Except as provided in paragraph 

(c) of this Rule, all quotations made 

available by the Exchange and displayed 

by quotation vendors shall be firm for 

customer and broker-dealer orders at 

the disseminated price in an amount up 

to the disseminated size. Responsible 

brokers or dealers bidding (or offering) 

at the disseminated price shall be 

collectively required to execute orders 

presented to them at such price up to 

the disseminated size in accordance 

with Rule 1015, or, if the responsible 

broker or dealer is representing (as 

agent) a limit order, such responsible 

broker or dealer shall be responsible (as 

agent) up to the size of such limit order, 

but may be responsible as principal for 

all or a portion of the excess of the 

disseminated size over the size of such 

limit order to the extent provided in 

Rule 1015. 

(c) No change. 

(d) [In accordance with paragraph 

(d)(l)(ii) of the SEC Quote Rule, the 

quotation size for a disseminated price 

with respect to an order for the account 

of a broker or dealer (‘‘broker-dealer 

order’’) shall be one (1) contract 

(‘‘quotation size’’), and all quotations 

made available by the Exchange and 

displayed by quotation vendors shall be 

firm for broker-dealer orders at the 

disseminated price in an amount up to 

the quotation size. The quotation size 

for broker-dealer orders provided in this 

paragraph (d) shall be periodically 

published by the Exchange. Responsible 

brokers or dealers bidding (or offering) 

at the disseminated price shall be 

collectively required to execute brokerdealer orders at such price up to the 

quotation size. (e)] If responsible brokers 

or dealers receive an order to buy or sell 

a listed option at the disseminated price 

Federal Register / Vol. 68, No. 97 / Tuesday, May 20, 2003 / Notices 27611

in an amount greater than the 

disseminated size [(for customer orders) 

or the quotation size (for broker-dealer 

orders)], such responsible broker or 

dealer shall, within thirty (30) seconds 

of receipt of the order, (i) execute the 

entire order at the disseminated price 

(or better), or (ii) execute that portion of 

the order equal to the disseminated size 

[(in the case of a customer order) or the 

quotation size (in the case of a brokerdealer order)] at the disseminated price 

(or better), and revise its bid or offer.

Commentary:

.01. For purposes of this Rule 1082, 

the term ‘‘broker-dealer orders’’

includes orders for the account(s) of 

market makers on another exchange 

and Registered Options Traders 

(‘‘ROTs’’) on the Exchange.

* * * * *

Philadelphia Stock Exchange 

Automated Options Market (AUTOM) 

and Automatic Execution System 

(AUTO–X) 

Rule 1080. (a)–(b) No change. 

(c) AUTO–X.—AUTO–X is a feature 

of AUTOM that automatically executes 

eligible market and marketable limit 

orders up to the number of contracts 

permitted by the Exchange for certain 

strike prices and expiration months in 

equity options and index options, 

unless the Options Committee 

determines otherwise. AUTO–X 

automatically executes eligible orders 

using the Exchange disseminated 

quotation (except if executed pursuant 

to the NBBO Feature in sub-paragraph 

(i) below) and then automatically routes 

execution reports to the originating 

member organization. AUTOM orders 

not eligible for AUTO–X are executed 

manually in accordance with Exchange 

rules. Manual execution may also occur 

when AUTO–X is not engaged, such as 

pursuant to sub-paragraph (iv) below. 

An order may also be executed partially 

by AUTO–X and partially manually. 

The Options Committee may for any 

period restrict the use of AUTO–X on 

the Exchange in any option or series 

provided that the effectiveness of any 

such restriction shall be conditioned 

upon its having been approved by the 

Securities and Exchange Commission 

pursuant to Section 19(b) of the 

Securities Exchange Act of 1934 and the 

rules and regulations thereunder. Any 

such restriction on the use of AUTO–X 

approved by the Options Committee 

will be clearly communicated to 

Exchange membership and AUTOM 

users through an electronic message 

sent via AUTOM and through an 

Exchange information circular. Such 

restriction would not take effect until 

after such communication has been 

made. 

Currently, the Exchange’s maximum 

allowable AUTO–X guarantee is 250 

contracts. With respect to options on the 

Nasdaq-100 Index Tracking Stock 

(‘‘QQQ’’)SM, orders of up to 2,000 

contracts in the first two (2) near term 

expiration months, and 1,000 contracts 

for all other expiration months, are 

eligible for AUTO–X. 

For each option, there shall be a 

minimum guaranteed AUTO–X size and 

a maximum guaranteed AUTO–X size. 

Such minimum and maximum sizes 

may be for a different number of 

contracts for customer orders than for 

broker-dealer orders], as determined by 

the specialist and subject to the 

approval of the Options Committee. 

The Exchange shall provide automatic 

executions for eligible customer and 

broker-dealer orders up to the 

Exchange’s disseminated size as defined 

in Exchange Rule 1082, subject to a 

minimum guaranteed AUTO–X size and 

a maximum guaranteed AUTO–X size 

(up to a size of 250 contracts). 

• If the Exchange’s disseminated size 

is greater than the minimum guaranteed 

AUTO–X size, and less than the 

maximum guaranteed AUTO–X size, 

inbound eligible orders shall be 

automatically executed up to 

Exchange’s disseminated size. 

Remaining contracts shall be executed 

manually by the specialist or placed on 

the limit order book. 

• If the Exchange’s disseminated size 

is less than the minimum guaranteed 

AUTO–X size for that option, inbound 

eligible orders shall be automatically 

executed up to such minimum 

guaranteed AUTO–X size. Remaining 

contracts shall be executed manually by 

the specialist or placed on the limit 

order book. 

• If the Exchange’s disseminated size 

is greater than the maximum guaranteed 

AUTO–X size, inbound eligible orders 

shall be automatically executed up to 

such maximum guaranteed AUTO–X 

size. Remaining contracts shall be 

executed manually by the specialist. 

The minimum and maximum 

guaranteed AUTO–X size applicable to 

each option shall be posted on the 

Exchange’s Web site. 

The Options Committee may, in its 

discretion, increase the size of orders in 

one or more classes of multiply-traded 

equity options eligible for AUTO–X to 

the extent necessary to match the size of 

orders in the same options eligible for 

entry into the automated execution 

system of any other options exchange, 

provided that the effectiveness of any 

such increase shall be conditioned upon 

its having been filed with the Securities 

and Exchange Commission pursuant to 

Section 19(b)(3)(A) of the Securities 

Exchange Act of 1934. 

(i)–(v) No change. 

(d)–(j) No change. 

Commentary 

01–.04 No change. 

.05 Off-floor broker-dealer limit 

orders delivered through AUTOM must 

be represented on the Exchange Floor by 

a floor member. Off-floor broker-dealer 

orders delivered via AUTOM shall be 

for a minimum size of one (1) contract. 

Off-floor broker-dealer limit orders are 

subject to the following other 

provisions: 

(i)–(iii) No Change 

(iv) [(a) The minimum guaranteed 

AUTO–X size shall be at least 10 

contracts for off-floor broker-dealer limit 

orders in the 120 most actively traded 

equity options (the ‘‘Top 120 Options’’). 

A Top 120 Option is defined as one of 

the 120 most actively traded equity 

options in terms of the total number of 

contracts that were traded nationally for 

a specified month based on volume 

reflected by The Options Clearing 

Corporation (‘‘OCC’’). 

(b) With respect to all other options, 

off-floor broker-dealer limit orders may 

be eligible for automatic execution via 

AUTO–X on an issue-by-issue basis, 

subject to the approval of the Options 

Committee. 

(c) The AUTO–X guarantee for offfloor broker-dealer limit orders may be 

for a different number of contracts, on 

an issue-by-issue basis, than the AUTO–

X guarantee for public customer orders, 

subject to the approval of the Options 

Committee. (v)] Off-floor broker-dealer 

AUTO–X eligible limit orders may be 

eligible for the Exchange’s National Best 

Bid or Offer (‘‘NBBO’’) Step-Up Feature 

on an issue-by-issue basis, subject to the 

approval of the Options Committee.

* * * * *

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 

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. 

27612 Federal Register / Vol. 68, No. 97 / Tuesday, May 20, 2003 / Notices 

8Rule 11Ac1–1(d)(1)(ii) under the Act provides 

that an exchange or association may establish by 

rule and periodically publish a quotation size, 

which shall not be for less than one contract, for 

which responsible brokers or dealers who are 

members of such exchange or association are 

obligated under paragraph (c)(2) of this section to 

execute an order to buy or sell a listed option for 

the account of a broker or dealer that is in an 

amount different from the quotation size for which 

it is obligated to execute an order for the account 

of a customer. 17 CFR 240.11Ac1–1(d)(1)(ii).

9See Securities Exchange Act Release No. 46886 

(November 22, 2002), 67 FR 72015 (December 3, 

2002) (SR–Phlx–2002–39).

10 15 U.S.C. 78f(b).

11 15 U.S.C. 78f(b)(5).

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Phlx proposes to require that all 

Phlx quotations would be firm for all 

incoming customer and broker-dealer 

orders for their full disseminated size, 

thus eliminating any distinction 

between customer orders and brokerdealer orders respecting firm quotation 

size. The Phlx also proposes to provide 

that all Phlx guaranteed AUTO–X sizes 

would be the same for both customer 

and broker-dealer orders. 

a. Firm Quotation Size 

Currently, Exchange Rule 1082(b) 

requires that all quotations made 

available by the Exchange and displayed 

by quotation vendors shall be firm for 

customer orders at the disseminated 

price in an amount up to the 

disseminated size. Exchange Rule 

1082(d) sets forth a different ‘‘quotation 

size’’ of one contract applicable to 

broker-dealer orders, which is 

distinguished from the ‘‘disseminated 

size’’ for which responsible brokers or 

dealers are firm for customer orders.8

The Exchange proposes to amend 

Exchange Rule 1082(b) to require that 

all quotations made available by the 

Exchange and displayed by quotation 

vendors shall be firm for customer 

orders and broker-dealer orders at the 

disseminated price in an amount up to 

the disseminated size, thus eliminating 

any distinction between customer 

orders and broker-dealer orders with 

respect to the size for which Exchange 

option quotations are firm.

The Exchange would also delete any 

references to ‘‘quotation size’’ and 

‘‘broker-dealer’’ from Exchange Rule 

1082(e). This would be to require all 

quotations made available by the 

Exchange and displayed by quotation 

vendors to be firm at the disseminated 

price in an amount up to the 

disseminated size for both customers 

and broker-dealers. The Phlx represents 

that the purpose of this provision is to 

provide both customers and brokerdealers with full access to the entire 

disseminated size of the Exchange’s 

quotations. Thus, the Exchange 

proposes to eliminate any distinction 

between the size for which its quotes are 

firm, whether for customers or brokerdealers, including market makers on 

other exchanges and Registered Options 

Traders (‘‘ROTs’’). 

b. Automatic Executions at the 

Disseminated Size for Eligible Customer 

and Broker-Dealer Orders 

In November 2002, the Commission 

approved an Exchange proposal to 

provide automatic executions for 

eligible orders at the Exchange’s 

disseminated size, subject to a 

minimum and maximum eligible size 

range to be determined by the specialist 

and subject to approval of the Options 

Committee, on an issue-by-issue basis.9

The Exchange now proposes to amend 

Exchange Rule 1080(c) by deleting the 

provision that such minimum and 

maximum sizes may be for a different 

number of contracts for customer orders 

than for broker-dealer orders. 

Corresponding sections of the 

Commentary to Exchange Rule 1080 

concerning AUTO–X eligibility and 

different guaranteed AUTO–X sizes for 

customers and broker-dealers would 

also be deleted. This would result in 

automatic executions for both eligible 

customer orders and eligible brokerdealer orders at the Exchange’s 

disseminated size.

The Exchange proposes to eliminate 

the distinction among customer orders 

and broker-dealer orders respecting 

AUTO–X guarantees. In order to ensure 

that customer and broker-dealer orders 

receive the same AUTO–X size 

guarantee, the Phlx proposes to delete 

the current provisions in Exchange Rule 

1080, Commentary .05 requiring a 

minimum guaranteed AUTO–X size of 

ten contracts for off-floor broker-dealer 

orders in Top 120 options. Additionally, 

the current Commentary includes a 

provision that, with respect to all other 

options, off-floor broker-dealer limit 

orders may be eligible for automatic 

execution via AUTO–X on an issue-byissue basis, subject to the approval of 

the Options Committee. The Exchange 

proposes to delete this provision in 

order to enable all eligible broker-dealer 

orders to be treated the same as eligible 

customer orders with respect to the 

Exchange’s guaranteed AUTO–X size. 

Finally, the Exchange proposes to 

delete from the Commentary the 

provision that the AUTO–X guarantee 

for off-floor broker-dealer limit orders 

may be for a different number of 

contracts, on an issue-by-issue basis, 

than the AUTO–X guarantee for public 

customer orders, subject to the approval 

of the Options Committee. 

c. Conclusion 

The Exchange believes that this 

proposed ‘‘one size fits all’’ approach, as 

set forth in subsections a. and b. above, 

should enable the Exchange to compete 

for broker-dealer orders by ensuring that 

there would be no distinction between 

broker-dealer and customer orders with 

respect to: (i) the size for which the 

Exchange is firm at its disseminated 

price; and (ii) the Exchange’s guaranteed 

AUTO–X size. Furthermore, the 

Exchange believes that the proposal 

should enhance the transparency of its 

markets and result in a larger number of 

orders automatically executed. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change, as amended, 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, because it is designed to 

promote just and equitable principles of 

trade, remove impediments to and 

perfect the mechanism of a free and 

open market and protect investors and 

the public interest by requiring 

Exchange specialists and ROTs to be 

firm for up to the Exchange’s 

disseminated size for all orders, and 

providing automatic executions at the 

same guaranteed size for all eligible 

orders.

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any inappropriate burden on 

competition that is not necessary 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 either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change: (1) Does not significantly affect 

the protection of investors or the public 

interest; (2) does not impose any 

significant burden on competition; and 

(3) does not become operative for 30 

days from the date of filing, or such 

Federal Register / Vol. 68, No. 97 / Tuesday, May 20, 2003 / Notices 27613

12 15 U.S.C. 78s(b)(3)(A).

13 17 CFR 240.19b–4(f)(6).

14As required under Rule 19b–4(f)(6)(iii), the 

Exchange provided the Commission with written 

notice of its intent to file the proposed rule change 

at least five business days prior to the filing date 

or such shorter period as designated by the 

Commission.

15For purposes only of accelerating 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).

16 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3PACE is the acronym for the Exchange’s 

Automated Communication and Execution System, 

which is the Exchange’s order routing, delivery, 

execution and reporting system for its equity 

trading floor. See Exchange Rules 229 and 229A.

4ECNs shall mean any electronic system that 

widely disseminates to third parties orders entered 

therein by an Exchange market maker or over-thecounter (‘‘OTC’’) market maker, and permits such 

orders to be executed against in whole or in part; 

except that the term ECN shall not include: any 

system that crosses multiple orders at one or more 

specified times at a specified price set by the ECN, 

algorithm, or by any derivative pricing mechanism 

and does not allow orders to be crossed or executed 

against directly by participants outside of such 

times; or, any system operated by or on behalf of 

an OTC market-maker or exchange market-maker 

that executes customer orders primarily against the 

account of such market maker as principal, other 

than riskless principal.

5 Dow Jones, ‘‘The DowSM,’’ ‘‘Dow 30SM,’’ ‘‘Dow 

Jones Industrial AverageSM,’’ ‘‘Dow Jones 

IndustrialsSM,’’ ‘‘DJIASM,’’ ‘‘DIAMONDS’’ and 

‘‘The Market’s Measure’’ are trademarks of Dow 

Jones & Company, Inc. (‘‘Dow Jones’’) and have 

been licensed for use for certain purposes by the 

Philadelphia Stock Exchange, Inc., pursuant to a 

License Agreement with Dow Jones. The 

DIAMONDS Trust, based on the DJIA, is not 

sponsored, endorsed, sold or promoted by Dow 

Jones, and Dow Jones makes no representation 

regarding the advisability of investing in the 

DIAMONDS Trust.

6These charges may include equity transaction 

charges, an equity floor brokerage assessment, an 

equity floor brokerage transaction fee, an offExchange trade information fee, an SEC fee, a 

remote information access fee, an Electronic 

Communications Network fee, an outbound InterMarket Trading System (‘‘ITS’’) fee and a net 

inbound ITS credit. Additionally, the PACE 

Specialist charge does not apply because specialists 

are not eligible for further PACE volume discounts. 

See Securities Exchange Act No. 44259 (May 4, 

2001), 66 FR 23962 (May 10, 2001) (SR–Phlx–2001–

41).

shorter time as the Commission may 

designate if consistent with the 

protection of investors and the public 

interest, the proposed rule change has 

become effective pursuant to Section 

19(b)(3)(A) 12 of the Act and Rule 19b–

4(f)(6) 13 thereunder.14

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative prior to 30 days after 

the date of filing. However, Rule 19b–

4(f)(6)(iii) permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Phlx seeks to have the proposed rule 

change become operative immediately 

upon filing so that the Exchange may 

remain competitive with other 

exchanges with similar rules in effect. 

The Commission, consistent with the 

protection of investors and the public 

interest, has determined to waive the 

30-day operative date and make the 

proposed rule change operative 

immediately upon filing, in order to 

allow the Phlx to compete for brokerdealer orders by removing any 

distinction between broker-dealer and 

customer orders with respect to the size 

for which the Exchange is firm at its 

disseminated price and the Exchange’s 

guaranteed AUTO–X size.15 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.

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change, as amended, 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–2003–18 and should be 

submitted by May 5, 2003. 

For the Commission, by the Division 

of Market Regulation, pursuant to 

delegated authority.16

Margaret H. McFarland, 

Deputy Secretary.

[FR Doc. 03–9034 Filed 4–11–03; 8:45 am]

Editorial Note: Due to numerous footnote 

errors, this document is being reprinted in its 

entirety. It was originally printed in the 

Federal Register on Monday, April 14, 2003 

at 68 FR 17976–17979.

[FR Doc. R3–9034 Filed 5–19–03; 8:45 am] 

BILLING CODE 1505–01–D

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–47647; File No. SR–Phlx–

2003–20] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by the 

Philadelphia Stock Exchange, Inc. To 

Adopt a License Fee for Transactions 

in DIAMONDS Exchange Traded 

Funds 

April 8, 2003.

Editorial Note: Due to numerous footnote 

errors, this document is being reprinted in its 

entirety. It was originally printed in the 

Federal Register on Monday, April 14, 2003 

at 68 FR 17979–17982.

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 March 28, 

2003, 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 and II below, which Items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons.

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Summary of Equity Charges to adopt a 

license fee of $0.00025 per share per 

trade side for sides greater than 500 

shares, with no maximum fee per trade 

side charged to Non-PACE Customers 3

and Electronic Communications 

Networks (‘‘ECNs’’),4 and a license fee 

of $0.0005 per share per trade side, with 

no maximum fee per trade side charged 

to specialists for transactions on the 

Phlx in the DIAMONDS Exchange 

Traded Funds (‘‘DIAMONDS’’).5 The 

Exchange also proposes to make minor, 

technical changes to its equity fee 

schedule to make corresponding 

references to the proposed fees. All 

other equity charges currently assessed 

by the Phlx will be imposed where 

applicable.6

The Exchange proposes to implement 

this fee as of April 1, 2003, the date that