[Federal Register Volume 61, Number 132 (Tuesday, July 9, 1996)]
[Notices]
[Pages 36102-36104]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17355]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37389; File No. SR-Phlx-96-15]


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 an Amendment to the 
PHLX's Schedule of Fees and Charges

July 1, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), \1\ notice is hereby given that on May 24, 1996 the 
Philadelphia Stock Exchange, Inc. (``PHLX'' or ``Exchange'') 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 by the self-regulatory organization. On June 24, 
1996, the PHLX filed Amendment No. 1 to its proposal. \2\ 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\ In Amendment No. 1, the PHLX deleted language that the fee 
imposed on PHLX members or member organizations for non-exchange 
sponsored securities execution equipment used on the PHLX equity 
trading floor conforms to the fee charged for such equipment used on 
the equity options trading floor; clarified that trades previously 
counted towards eligibility for credits against the previously 
imposed monthly charges for securities execution equipment need not 
have been cleared through SCCP to have qualified for the credit, 
only executed on the PHLX; and clarified that PHLX members or member 
organizations will be assessed $300.00 for the period July 1, 1996 
through December 31, 1996 for each non-exchange sponsored securities 
execution machine operated on the PHLX equity trading floor. See 
Letter from Murray L. Ross, Vice President and Secretary, PHLX, to 
George A. Villasana, Attorney , Division of Market Regulation, SEC, 
dated June 21, 1996.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The PHLX, pursuant to Rule 19b-4 of the Act, submits a proposed 
rule change amending the PHLX's Schedule of Fees and Charges respecting 
the charges for non-exchange sponsored securities execution equipment 
\3\ operated by the PHLX members on the PHLX equity floor. The proposal 
would rescind the existing monthly fee of $250.00 assessed each member 
or member organization for each non-exchange sponsored securities 
execution machine operated by the member or member organization on the 
PHLX equity trading floor as well as the credits previously offered 
against such fees, and substitutes a securities execution equipment 
registration fee of $300.00 per machine for the period July 1, 1996 
through December 31, 1996. \4\ Deletions are in brackets:
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    \3\ Securities execution equipment refers to machines that route 
order flow to other marketplaces, such as Designated Order 
Turnaround (``DOT'') machines, Instinet terminals, and other 
computers configured for securities execution and order delivery 
capabilities.
    \4\ See Amendment No. 1, supra note 2.
    According to the Exchange, its Board of Governors has not yet 
determined the amount of fees to be charged for such equipment after 
December 31, 1996. Telephone conversation on June 19, 1996 between 
Murray L. Ross, Vice President and Secretary, PHLX, and George A. 
Villasana, Attorney, Division of Market Regulation, SEC.
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    Membership Dues or Foreign Currency User Fees <SUP>*--$1,000.00 
semiannually.
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    \*\ An exemption from foreign currency user fees is extended to 
PHLX members also holding title to a foreign currency options 
participation.
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    Application Fee--$200.00.
    Initiation Fee--Members, Participants, and Approved Lessors--
$1500.00.
    Transfer Fee--$300.00.

[[Page 36103]]

    Trading Post/Booth--$375.00 quarterly.
    Floor Facility Fees--$187.50 quarterly.
    Direct Wire to Floor--$60.00 quarterly.
    Telephone System Line Extensions--$22.50 monthly/per extension.
    Execution Services/Communication Charge--$200.00 monthly.
    [Stock Execution Machine <SUP>*** (Equity Floor)--$250.00 monthly].
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    \***\ [$250 credit on fees charged on each stock execution 
machine by any member firm for each 2,500 trades such member 
executed on the PHLX equity floor in a non-specialist account is 
applicable.]
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    Stock Execution Machine Registration Fee [(Option Floor)]--$300.00 
per unit.
    Equity, Option or FCO Transmission charge--$750.00 monthly.
    Quotron Equipment--$225.00 monthly.
    Instinet, Reuters Eqiupment--cost pass thru.
    FCO pricing tape--$600.00.
    Option Report service: New York--$600.00; Chicago--$800.00.
    Examinations Fee<SUP>**--$1,000.00 monthly.
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    \**\ This fee is applicable to member/participant organizations 
for which the PHLX is the DEA. The following organizations are 
exempt: (1) inactive organizations; (2) organizations operating from 
the PHLX trading floor; (3) organizations for any month where they 
incur transaction or clearing fees charges directly by the Exchange 
or by its registered subsidiary, provided that the fees exceed the 
examinations fee for that month; and (4) organizations affiliated 
with an organization exempt from this fee due to the second or third 
category. Affiliation includes an organization that is a wholly 
owned subsidiary of, or by under common control with, an ``exempt'' 
member or participant organization. An inactive organization is one 
which had no securities transaction revenue, as determined by semi-
annual FOCUS reports, as long as the organization continues to have 
no such revenue each month.
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    Registered Representative Registration:
    Initial--$10.00.
    Maintenance--$10.00 annual.
    Transfer--$10.00.

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 self-regulatory organization 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
    Since 1990, the Exchange has imposed on each member or member 
organization a monthly fee of $250.00 for each non-exchange sponsored 
securities execution machine the member or member organization operates 
on the PHLX equity trading floor.\5\ Since April 1994, the PHLX has 
provided a monthly credit equal to 50% of the fees charged members and 
member organizations for each of these machines for every 2,500 trades 
executed by such member on the PHLX equity floor in a non-specialist 
account.\6\ This credit was not authorized to exceed 50% of the total 
securities execution machine billing charges per member operating such 
machine.\7\ Subsequently, however, the credit was authorized to offset 
up to 100% of such fees.\8\
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    \5\ See Securities Exchange Act Release No. 28212 (July 17, 
1990), 55 FR 30065 (July 24, 1990) (order approving File No. SR-
PHLX-90-15).
    \6\ See Securities Exchange Act Release No. 33954 (Apr. 21, 
1994), 59 FR 22191 (Apr. 29, 1994) (order approving File No. SR-
PHLX-94-19).
    \7\ Id.
    \8\ See Securities Exchange Act Release No. 36682 (Jan. 4, 
1996), 61 FR 1200 (Jan. 17, 1996) (order approving File No. SR-PHLX-
95-89).
    The Exchange advised the Commission that trades previously 
counted towards eligibility for credits against the previously 
imposed monthly charges for such stock execution equipment need not 
have been cleared through SCCP to have qualified for the credit; the 
trades needed-merely to be executed on the PHLX. See Amendment No. 
1, supra note 2.
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    This proposal rescinds the existing monthly fee of $250.00 assessed 
on each PHLX member of member organization for each non-exchange 
sponsored securities execution machine on the PHLX equity trading floor 
and the related credit scheme, and imposes on each PHLX member of 
member organization, for the period July 1, 1996 through December 31, 
1996, a registration fee of $300.00 \9\ for each non-exchange sponsored 
securities execution machine operated on the PHLX equity trading 
floor.\10\
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    \9\ A registration fee of $300 is presently imposed on member or 
member organizations for no-change sponsored securities execution 
equipment operated by a PHLX member of member organization on the 
PHLX equity options trading floor for the period Sept. 1, 1995 
through Dec. 31, 1996. Securities Exchange Act Release No. 36198 
(Sept. 7, 1995), 60 FR 47639 (Sept. 13, 1995) (order approving File 
No. SR-PHLX-95-64).
    \10\ See infra note 3.
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the Act 
\11\ in general and furthers the objectives of Section 6(b)(4) \12\ in 
particular in that it provides for the equitable allocation of 
reasonable dues, fees, and other charges among the Exchange's members 
and other persons using its facilities.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not 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 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 constitutes or changes a due, fee, or 
other charge imposed by the Exchange and, therefore, has become 
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and 
subparagraph (e) of Rule 19b-4 thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4.
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    At any time within sixty 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. 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. 
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. Sec. 552, will be available for inspection and copying at 
the Commission's Public Reference Section, 450 Fifth Street, N.W.,

[[Page 36104]]

Washington, D.C. 20549. Copies of such filing also will be available 
for inspection and copying at the principal office of the Philadelphia 
Stock Exchange. All submissions should refer to File No. SR-PHLX-96-15 
and should be submitted by July 30, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 96-17355 Filed 7-8-96; 8:45 am]
BILLING CODE 8010-01-M