[Federal Register Volume 66, Number 95 (Wednesday, May 16, 2001)]
[Notices]
[Page 27193]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-12279]



[[Page 27193]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44278; File No. SR-SCCP-2001-05]


Self-Regulatory Organizations; Stock Clearing Corporation of 
Philadelphia; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Eliminating Certain Specialist Fees, Discounts, 
and Credits

May 8, 2001.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on April 2, 2001, the Stock 
Clearing Corporation of Philadelphia (``SCCP'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I, II, and III below, which items have 
been prepared primarily by SCCP. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
parties.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change amends SCCP's fee schedule by eliminating 
certain equity floor specialist fees, discounts, and credits for 
transactions with orders entered before the opening of trading on 
PACE.\2\ Under the proposed rule change, certain trade recording and 
value fees are eliminated. The proposed amendment also eliminates 
volume related discounts given to specialists for trades cleared 
through a SCCP margin account as well as a $.20 credit per specialist 
trade on PACE.
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    \2\ PACE is the Philadelphia Stock Exchange's Automated 
Communication and Execution System. It is the Exchange's order 
routing, delivery, execution, and reporting system for its equity 
trading floor.
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule

    In its filing with the Commission, SCCP included statements 
concerning the purpose of and statutory basis for the proposed rule 
change. The text of these statements may be examined at the places 
specified in Item IV below. SCCP has prepared summaries, set forth in 
sections (A), (B), and (C) below, of the most significant aspects of 
such statements.\3\
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    \3\ The Commission has modified parts of these statements.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The purpose of the proposed rule change is to eliminate certain 
specialist fees, discounts, and credits which pertain to trades that a 
specialist executes on PACE on the opening.
    Presently, orders entered in the PACE system prior to the opening 
which are executed on the opening are subject to the following SCCP 
fees and credits: (1) Trade recording fees; (2) value fees; (3) 
specialist discounts for trades cleared through a SCCP margin account; 
and (4) a PACE specialist credit of $.20. The proposed rule change 
eliminates the above charges and credits in relation to orders entered 
on PACE before the opening which were executed by the specialist and 
not matched automatically by PACE.\4\
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    \4\ For a detailed listing of the above fees, please see Exhibit 
B of this proposed rule change in the Commission's Public Reference 
Section.
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    In some instances, where PACE cannot match a buy and sell order, 
the specialist is responsible for their independent execution and fees. 
The proposed rule change eliminates the transaction fees imposed by the 
Philadelphia Stock Exchange in the above circumstances which affect 
specialists with orders on the opening that are not executed 
automatically through PACE. SCCP believes that the proposed rule change 
will enable the specialist to continue to provide the market with 
prompt execution of orders that require his intervention without the 
additional burden of a transaction fee. SCCP states that a more 
affordable, fair, and competitive market for specialists should 
encourage the specialists' efforts in attracting more order flow which 
in turn should promote a more liquid market. SCCP intends to implement 
the proposed rule change effective May 1, 2001.
    For these reasons, SCCP believes that the proposed rule change is 
consistent with section 17A(b)(3)(D) of the Act \5\ which requires that 
the rules of a registered clearing agency provide for equitable 
allocation of reasonable dues, fees, and other charges for services 
which it provides to its participants.
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    \5\ 15 U.S.C. 78q-1(b)(3)(D).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    SCCP does not believe that the proposed rule change will impose any 
inappropriate burden on competition.

(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 rule change establishes or changes a due, 
fee, or other charge imposed by SCCP, it has become effective pursuant 
to Section 19(b)(3)(A)(ii) of the Act \6\ and Rule 19b-4(f)(2) 
thereunder.\7\ At any time within sixty 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.
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    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 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 Section, 450 Fifth Street, NW., 
Washington, DC 20549. Copies of such filing will also be available for 
inspection and copying at SCCP. All submissions should refer to the 
File No. SR-SCCP-2001-05 and should be submitted by June 6, 2001.
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    \8\ 17 CFR 200.30-3(s)(12).

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\8\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-12279 Filed 5-15-01; 8:45 am]
BILLING CODE 8010-01-M