Federal Register / Vol. 66, No. 10 / Tuesday, January 16, 2001 / Notices 3631

5Subscriber Bulletins are mailed to Nasdaq

Workstation II subscribers and also may be found

at www.nasdaqtrader.com/trader/news/

subscriberbulletins.

6Securities Exchange Act Release No. 43769

(December 22, 2000).

7 Id.

8 15 U.S.C. 78o–3(b)(5).

9 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3The Exchange filed its proposed rule change on

November 16, 2000. On December 15, 2000,

however, the Exchange filed Amendment No. 1,

which clarified that the proposed fee is comparable

to the fee charged by the Philadelphia Stock

Exchange, Inc. (‘‘Phlx’’). See Letter from Hassan

Abedi, Attorney, Regulatory Policy, PCX, to Susie

Cho, Attorney, Division of Market Regulation

(‘‘Division’’), Commission (December 15, 2000).

4The term ‘‘Broker-Dealer’’ as used in this rule

filing will include transactions in which a market

maker is trading for a customer account, any trade

for a joint back officer (‘‘JBO’’) account, all trades

for a firms account, except trades in which the firm

is trading with its own customer on contra side.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

1. Purpose

In the September/October 2000 issue

of Nasdaq’s Subscriber Bulletin,5

Nasdaq announced that it had increased

the bandwidth of its Enterprise Wide

Network II from 128 kilobits (‘‘kb’’) to

192 kb. This increased bandwidth

provides Nasdaq with the ability to

support increased share volume and net

products and trading applications that

will be introduced. A description of the

history of EWN II and the recent

bandwidth increase may be found in

SR–NASD–00–73.6 Subscriber Bulletin

also announced that the increased cost

of the expanded bandwidth ($375 per

month per circuit) would be passed on

to Nasdaq subscribers beginning

December 1, 2000. Nasdaq absorbed all

of the increased costs for the month of

November 2000.

On December 13, 2000, the

Commission received Nasdaq’s

proposed rule change to amend the

subscriber fees for NASD members as

described above.7 Because the filing was

made under Section 19(b)(3)(A)(ii),

which makes the rule change

immediately effective upon filing with

the Commission, the fee increase

became effective as of December 13,

2000. In this filing, Nasdaq seeks to

recover the costs associated with the

expanded bandwidth for the period of

December 1–12, 2000, as announced in

the Subscriber Bulletin.

2. Statutory Basis

Nasdaq believes that the proposed

rule change is consistent with the

provisions of Section 15A(b)(5) of the

Act 8 which requires that the rules of the

NASD provide for the equitable

allocation of reasonable dues, fees and

other charges among members and

issuers and other persons using any

facility or system which the NASD

operate or controls. Nasdaq provided its

subscribers with ample advance notice

of the fee increase, and has limited the

fee increase to the additional cost that

it is incurring as a result of the

expanded bandwidth. Nasdaq did not

pass on the costs of the expanded

bandwidth to subscribers that Nasdaq

incurred in November 2000. As such,

Nasdaq believes that it is equitably

allocating charges among members for

the use of EWN II during the period of

December 1–12, 2000.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

Nasdaq does not believe that the

proposed rule change will impose any

burden on competition that it 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

Nasdaq has not solicited or received

written comments on the proposed rule

change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of the date of

publication of this notice in the Federal

Register or within such longer period (i)

as the Commission may designate up to

90 days of such date if it finds such

longer period to be appropriate and

publishes its reasons for so finding or

(ii) as to which the NASD consents, the

Commission will:

A. By order approve such proposed

rule change, or

B. Institute proceedings to determine

whether the proposed rule change

should be disapproved.

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 maybe 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 NASD. All

submissions should refer to file number

SR–NASD–00–79 and should be

submitted by February 6, 2001.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.9

Margarety H. McFarland,

Deputy Secretary.

[FR Doc. 01–1195 Filed 1–12–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43811; File No. SR–00–38]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Pacific Exchange, Inc. Modifying its

Options Trade-Related Transaction

Charges and Changing its Firm

Transaction Fee

January 5, 2001

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 November

16, 2000, the Pacific Exchange, Inc.

(‘‘PCX’’ 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 Exchange.3 The

Commission is publishing this notice to

solicit comments on the proposed rule

change, as amended.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange proposes to amend its

Schedule of Rates and Charges to create

a new fee category in the transactions

portion of the ‘‘PCX Options: TradeRelated Charges.’’ The new fee category

will be entitled ‘‘Broker-Dealer.’’ 4 The

PCX also seeks to change the fees

charged for firm transactions.

3632 Federal Register / Vol. 66, No. 10 / Tuesday, January 16, 2001 / Notices

5See Securities Exchange Act Release No. 43558

(November 14, 2000), 65 FR 69984 (November 21,

2000).

6 Id.

7 15 U.S.C. 78f(b).

8 15 U.S.C. 78f(b)(4).

9 15 U.S.C. 78s(b)(3)(A)(ii).

10 17 CFR 240.19b–4(f)(2).

11 17 CFR 200.30–3(a)(12).

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

Exchange 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

Exchange has prepared summaries, set

forth in Section 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 Exchange proposes to amend its

Schedule of Rates and Charges to create

a new fee category in the transactions

portion of the ‘‘PCX Options: TradeRelated Charges.’’ The new fee category

will be entitled ‘‘Broker-Dealer.’’ The

PCX also seeks to change the fees

charged for firm transactions.

Currently, the PCX Schedule of Rates

and Charges contains tow categorized of

transactions under its options trade

related charges. These categories

include market maker transactions and

firm transactions. The market maker

charge is $0.21 per contract. The firm

charge consists of $0.85 per contract

side where the premium is less than

$1.00 per contract and a $0.115 per

contract side where the premium is

$1.00 or more per contract. This fee

structure does not address those

instances where a broker/dealer

processes a transaction through a

customer account of the market maker

or through a firm account created

through a JBO arrangement with a

clearing firm. In these situations the

broker/dealer pays no transaction fees

(customer account) or pays the

applicable firm fee.

The Exchange now proposes to

modify its Schedule of Rates and

Charges. First, the Exchange proposes to

change its options trade-related

transaction charges by creating a new

category entitled ‘‘Broker-Dealer.’’ The

PCX believes that this modification is

needed in order to create a billing

category for broker-dealer activity that

does not fall within the structure of the

Schedule of Rates and Charges. This

new category will cover transaction and

comparison charges incurred by brokerdealer activity originating both on and

off the PCX floor. This new fee consists

of $0.19 per contract transaction charge

and $0.05 per contract comparison

charge. The fee will apply to brokerdealers who are routing orders through

firm or customer accounts carried by

member clearing firms. The brokerdealer fee does not apply to certain

firm/proprietary orders that are

included within the firm transaction

charge.

The PCX believes that the propsed fee

isreasonable. The Exchange

alsorepresents that it is comparable to

fees charged by the Phlx.5 Like the

broker-dealer charge applied by the

Phlx, the PCX’s proposed broker-dealer

fee applies to ordersfor any account in

which the holder of a beneficial interest

is a broker-dealer or person associated

with or employed by a broker-dealer,

including JBO accounts.6

The Exchange also propooses

tochange its firm transaction fee. The

firm transaction fee applies to member

firm proprietary trades that have a

customer of that firm on the contra side

of the transaction. The simplify billing,

the Exchange proposes tochange the rate

to a revenue neutral rate of $0.100 per

contract regardless of premium size.

2. Statutory Basis

The Exchange believes that 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) 8 in particular, in that it provides

for the equitable allocation of reasonable

dues, fees, and other charges among its

members and other persons using its

facilities.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The PCX 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

The Exchange did not solicit or

receive comments on the proposed rule

change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The proposed rule change has become

effective pursuant to Section

19(b)(3)(A)(ii) of the Act,9 and Rule

19b–4(f)(2) thereunder,10 in that it

establishes or changes a due, fee, or

other charge imposed by the Exchange.

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

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, N.W., Washington, D.C. 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 at

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 refer to the File No.

SR–PCX–00–38 and should be

submitted by February 6, 2001.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.11

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–1153 Filed 1–12–01; 8:45 am]

BILLING CODE 8010–01–M