Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Notices 65525

4Nasdaq/NM Securities will be traded on CSE

pursuant to section 12(f) of the Act as well as the

Joint Self-Regulatory Organization Plan Governing

the Collection, Consolidation, and Dissemination of

Quotation and Transaction Information for NasdaqListed Securities traded on Exchanges on an

Unlisted Trading Privileges Basis (‘‘Nasdaq-UTP

Plan’’).

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

6 15 U.S.C. 78f(b)(5).

7 15 U.S.C. 78f(b)(4).

8 15 U.S.C. 78s(b)(3)(A).

9 17 CFR 240.19b–4(f)(2).

10See section 19(b)(3)(C) of the Act, 15 U.S.C.

78s(b)(3)(C).

11 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3 Inactive Nominees are designated by Phlx

member organizations to serve as such. They have

been approved by the Phlx for membership in

accordance with the Phlx Rules, but will not have

the rights and privileges of membership until made

effective by the Exchange. See Phlx By-law Article

XII, Section 12–10 and Phlx Rule 21.

in Item IV below. CSE 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 Exchange is proposing two

amendments to the Exchange Rules

governing transaction fees and market

data revenue credits in keeping with

recent trends in the securities industry.

The first amendment adds subsection

(2) to CSE Rule 11.10(A)(e), (‘‘Crosses

and Meets’’). Proposed subsection (2)

establishes a fee schedule for

transactions in Nasdaq/NM Securities.

The second amendment creates in

incentive for CSE members to trade

Nasdaq/NM Securities on the Exchange

and will be codified as CSE Rule

11.10(A)(l) (‘‘Tape ‘C’ Transaction

Credit’’). The Exchange believes the

credit is a logical next step in its efforts

to provide competitive exchange

services to CSE members trading

Nasdaq/NM Securities. Under the

Nasdaq program,4 CSE member firms

will receive a 75 percent (75%) pro rata

transaction credit on all Nasdaq Tape C

market data revenue generated by CSE

member trading of Nasdaq/NM

Securities.

2. Statutory Basis

The proposed rule change is generally

consistent with section 6(b) of the Act.5

The proposed rule change also furthers

the objectives of section 6(b)(5) of the

Act,6 particularly, in that it is designed

to promote just and equitable principles

of trade, and to remove impediments to

and perfect the mechanism of a free and

open market and a national market

system, and, in general, to protect

investors and the public interest. The

proposal also is consistent with section

6(b)(4) of the Act 7 in that it is designed

to provide for the equitable allocation of

reasonable dues, fees, and other charges

among Exchange members by crediting

CSE members on a pro rata basis.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The CSE does not believe that the

proposed rule change will result in any

burden on competition that is not

necessary or appropriate in furtherance

of the purposes of the Act, as amended.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

Written comments were neither

solicited nor received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change has become

effective pursuant to section 19(b)(3)(A)

of the Act 8 and Rule 19b–4(f)(2)

thereunder,9 as establishing or changing

a due, fee, or other charge paid solely

by members of the CSE. 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.10

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 CSE. All

submissions should refer to File No.

SR–CSE–2001–05 and should be

submitted by January 9, 2002.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.11

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–31196 Filed 12–18–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–45150; File No. SR–Phlx–

2001–110]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Philadelphia Stock Exchange, Inc.,

Permitting Inactive Nominees To

Become Effective Members on

December 5, 2001

December 12, 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 December

4, 2001, 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 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 Phlx proposed to allow Inactive

Nominees,3 upon request, to act as

effective members of the Phlx on

Wednesday, December 5, 2001 on the

Phlx Equity Trading Floor. The text of

the proposed rule change is available at

the Office of the Secretary, the

Exchange, and the Commission.

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. The text of

these statements may be examined at

65526 Federal Register / Vol. 66, No. 244 / Wednesday, December 19, 2001 / Notices

4For example, trading volume on November 11,

1999, the 1999 McNamara Trading Day, was over

18.1 million shares, triple Phlx’s then average daily

volume.

5Telephone conversation between John Dayton,

Assistant Secretary & Counsel, Phlx, and Steven

Johnston, Special Counsel, Division of Market

Regulation, Commission, on December 10, 2001

(clarifying effect of proposal on transfer of

membership).

6Such Inactive Nominees will return to Inactive

Nominee status at the close of business on

Wednesday, December 5, 2001. In addition, Inactive

Nominees may choose to become an effective

member pursuant to Phlx Rule 21.

7Telephone conversation between John Dayton,

Assistant Secretary & Counsel, Phlx, and Steven

Johnston, Special Counsel, Division of Market

Regulation, Commission, on December 10, 2001

(clarifying combined participation of members and

associated Inactive Nominees in trading, as well as

purpose of combined participation).

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

9 15 U.S.C. 78f(b)(5).

10 15 U.S.C. 78s(b)(3)(A)(i).

11 17 CFR 240.19b–4(f)(1).

12 17 CFR 200.30–3(a)(12).

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 allow Inactive Nominees,

upon request, to act as effective

members of the Phlx on Wednesday,

December 5, 2001 on the Phlx Equity

Trading Floor. Wednesday, December 5,

2001 is the 6th Annual McNamara

Trading Day benefiting St. Jude

Children’s Research Hospital.

McNamara Trading Company, the

largest floor brokerage member

organization on the Equity Floor,

donates all commissions from the day’s

trading to the St. Jude Children’s

Research Hospital. The Equity Floor

typically experiences a very large

increase in volume that day. The

Exchange believes that making Inactive

Nominees effective members upon their

request on that day should better enable

the Exchange and its members to

maintain fair and orderly markets in

securities due to the expected increased

volume.4

The Phlx has authority to make

Inactive Nominees effective members.

Phlx By-law Article XII, Sections 12–

10(a) and (b) state that an Inactive

Nominee is ‘‘an individual * * *

approved for membership’’ in the

Exchange, but ‘‘shall have no rights or

privileges of membership unless and

until said Inactive Nominee becomes an

effective member.’’ One way that an

Inactive Nominee becomes an effective

member is by assuming, pursuant to

Phlx Rule 21, legal title to a membership

through an intra-firm transfer. This

allows an Inactive Nominee to become

an effective member of the Exchange

through the transfer of a membership

from another member, associated with

the Inactive Nominee’s firm, to the

Inactive Nominee. Consequently, the

member leaving the membership goes

on Inactive Nominee status.

The Exchange now proposes to permit

an Inactive Nominee to become an

effective member on December 5, 2001

without receiving transfer of

membership from the Inactive

Nominee’s associated member.5 To

become an effective member on that

date, an Inactive Nominee need only

request to be made an effective member

to the Exchange’s Membership Services

Department.6 In order to address the

anticipated high volume of trading on

December 5, 2001, both the Inactive

Nominee and the associated member of

the Inactive Nominee’s firm would be

permitted to trade as Exchange members

on the Phlx equity trading floor on that

date.7

(2) Statutory Basis

The Exchange believes that the

current proposal should allow the

Exchange to continue to maintain fair

and orderly markets on the Phlx Equity

Floor on Wednesday, December 5, 2001

in light of the expected increase in

trading activity that day. As such, the

Exchange believes the proposed rule

change is consistent with Section 6(b) of

the Act,8 in general, and furthers the

objectives of Section 6(b)(5) of the Act,9

in particular, because it should promote

just and equitable principles of trade,

facilitate transactions in securities,

remove impediments to and perfect the

mechanism of a free and open market

and a national market system, and

protect investors and the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Phlx 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 received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change has become

effective pursuant to Section

19(b)(3)(A)(i) of the Act10 and

subparagraph (f)(1) of Rule 19b–411

thereunder because it constitutes a

stated policy, practice, or interpretation

with respect to the administration of

Phlx By-law Article XII, Section 12–

10(b); namely that Inactive Nominees

could, upon request, be made effective

members for trading on the Phlx Equity

Floor on Wednesday, December 5, 2001.

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 furthance 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 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–2001–110 and should be

submitted by January 9, 2002.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.12

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–31225 Filed 12–18–01; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

Reporting and Recordkeeping

Requirements Under OMB Review

AGENCY: Small Business Administration.