1164 Federal Register / Vol. 66, No. 4 / Friday, January 5, 2001 / Notices

5On October 13, 1999, the Commission approved,

on a pilot basis, the CHX’s proposed rule change

that allowed the CHX to implement an extended

hours trading session. See Securities Exchange Act

Release No. 42004 (October 13, 1999), 64 FR 56548

(October 20, 1999) (SR–CHX–99–16). The

Commission recently approved the CHX’s proposal

to make the E-Session a permanent part of the

CHX’s operations. See Securities Exchange Act

Release No. 43304 (September 19, 2000), 65 FR

57850 (SR–CHX–00–26). The E-Session takes place

from 3:30 p.m. to 5:30 p.m., Central Time, Monday

through Friday.

6E-Session fees have been waived since the

beginning of the E-Session. See Securities Exchange

Act Release Nos. 42089 (November 2, 1999), 64 FR

60864 (November 8, 1999) (SR–CHX–99–23)

(waiving fees from October 13, 1999 through

December 31, 1999); 42329 (January 11, 2000), 65

FR 3000 (January 19, 2000) (SR–CHX–99–29)

(waiving fees from January 1, 2000 through March

1, 2000); 42486 (March 2, 2000), 65 FR 12601

(March 9, 2000) (SR–CHX–005) (waiving fees from

March 2, 2000 through June 30, 2000); and 42929

(June 13, 2000), 65 FR 38620 (June 21, 2000) (SR–

CHX–00–18) (waiving fees from July 1, 2000

through October 1, 2000); and 43403 (October 2,

2000), 65 FR 60234 (October 10, 2000) (SR–CHX–

00–30) (waiving transaction, order processing and

floor broker fees through December 31, 2000). This

proposal extends the waiver of the same fees

through June 30, 2001.

7See Securities Exchange Act Release No. 42784

(May 15, 2000), 65 FR 33383 (May 23, 2000) (SR–

CHX–00–12).

8See Securities Exchange Act Release No. 43402

(October 2, 2000), 65 FR 25867 (October 6, 2000)

(SR–CHX–00–29).

9 15 U.S.C. 78f(b)(4).

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

11 17 CFR 240.19b–4(f)(2).

12The Commission considers the proposal to

have been filed as of December 19, 2000. See

footnote 3, supra.

13 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

brokers with a credit of $.25 per trade

executed during the Exchange’s ESession extended hours trading session;

and (ii) the waiver of all transaction,

order processing and floor broker fees

for transactions that occur during the ESession. The text of the proposed rule

change is available upon request from

the CHX 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 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 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 CHX proposes to amend the

Schedule to eliminate, through June 30,

2001, order processing, transaction and

floor broker fees for transactions that

occur during the E-Session.5 This

proposal is designed to allow CHX

members to continue to participate in

the E-Session without incurring the fees

normally associated with their CHX

transactions.6 According to the

Exchange, the vast majority of the

securities that trade during the ESession are already subject to order

processing and transaction fee waivers

under the current fee schedule because

they are either Nasdaq/NMS issues or

issues within the S&P 500. Waiving fees

on the few remaining securities and on

floor broker transactions in all securities

simplifies the Exchanges’ fee-related

communication with its members.

Additionally, this proposal would

extend the current E-Session credit

program through June 30, 2001.

Exchange management developed this

program to encourage members to seek

additional order flow during the ESession. Under the program, Exchange

specialists and floor brokers receive a

credit of $.25 per trade executed during

the E-Session. This credit program was

approved in May 2000,7 and has been

extended through December 31, 2000.8

2. Statutory Basis

The Exchange believes the proposed

rule change is consistent with Section

6(b)(4) of the Act 9 in that it provides for

the equitable allocation of reasonable

dues, fees and other charges among its

members.

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.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

No written comments were solicited

or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Act

The proposed rule change has become

effective pursuant to Section

19(b)(3)(A)(ii) of the Act 10 and

subparagraph (f) of Rule 19b–4

thereunder,11 because it involves a due,

fee, or other charge. At any time with 60

days of the filing of the proposed rule

change,12 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 proposal 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 coping 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 Exchange. All

submissions should refer to file number

SR–CHX–00–39, and should be

submitted by January 25, 2001.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.13

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–316 Filed 1–4–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43778; File No. SR–CHX–

00–38]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Stock Exchange, Incorporated

Relating to Membership Dues and Fees

December 28, 2000.

Pursuant to section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’) 1 and Rule 19b–42 thereunder,

notice hereby is given that on December

18, 2000, the Chicago Stock Exchange,

Incorporated (‘‘CHX’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Federal Register / Vol. 66, No. 4 / Friday, January 5, 2001 / Notices 1165

3The fixed fee for Nasdaq/NMS Securities was

first assessed in April 2000. Before that date, the

Exchange had charged its members a fixed fee on

Dual Trading System Securities (securities listed on

the New York Stock Exchange or the American

Stock Exchange) for many years. The Nasdaq/NMSrelated fixed fees allow the Exchange to at least

partially defray the costs associated with the

continued development and anticipated growth of

its Nasdaq/NMS program. The Exchange originally

began assessing a Nasdaq/NM Securities fixed fee

at a somewhat lower level than the fee that had

been in place for Dual Trading System Securities to

allow members time to adjust their business models

to this new requirement. Now, nine months later,

the Exchange proposes to increase the fee to more

closely resemble the one charged for Dual Trading

System Securities.

4This fee is designed to at least partially defray

the costs associated with the continued

development and anticipated growth of the

Exchange’s odd-lot program.

5Under the current Schedule, firms are subject to

either a $78,000 or $54,000 cap on transaction fees

for orders that are not sent through the Exchange’s

MAX trading system, depending upon whether or

not the firm has a market maker or floor broker

presence. The revised Schedule would remove the

reference to a floor presence and impose separate

$110,000 caps on non-MAX transaction fees for

transactions in Nasdaq/NMS Securities and in dual

Trading System Securities.

6 15 U.S.C. 78f(b)(4).

7 15 U.S.C. 78f(b)(3)(A)(ii).

8 17 CFR 240.19b–4(f)(2).

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 CHX proposes to amend its

membership dues and fees schedule

(‘‘Schedule’’), effective January 1, 2001,

to: (1) Increase the special fixed fees for

Nasdaq/NMS securities; (2) assess a new

fixed fee on ‘‘dedicated odd-lot

dealers’’; (3) revise the fees for

transactions in listed securities executed

through a floor broker; (4) raise the cap

on the maximum transaction fees that

can be incurred by a member firm; and

(5) increase the earned credits available

through the floor broker credit program.

Additionally, the Exchange proposes to

reconfigure its Schedule to include all

of its transaction fees in one portion of

the Schedule. The proposed rule change

is available at the principal office of the

CHX and at the Commission’s Public

Reference Room.

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

CHX included statements concerning

the purpose of and basis for the

proposed rule change and discussed any

comments it received regarding the

proposed rule change. The text of these

statements may be examined at the

places specified in Item IV below. The

CHX 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

A. Purpose

The proposed rule change amends the

Schedule in several ways. These

changes are designed to allow the

Exchange to continue its exponential

growth while providing a strong market

for its members and for investors.

First, the proposal would increase the

specialist fixed fees for Nasdaq/NMS

Securities and assess a new fixed fee on

‘‘dedicated odd-lot dealers.’’ The

specialist fixed fee for Nasdaq/NMS

Securities is paid by the specialist in

each particular security; the amount of

the fee is based on a market share

calculation in that security.3 The new

dedicated odd-lot dealer fee is a flat fee

assessed on any odd-lot dealer (as

defined in Article XXXI, Rule 3 of the

Exchange’s Rules) whose principal

business is the trading of odd-lots.4

The proposal also makes changes to

the CHX’s transaction fee schedule by:

(a) Setting a flat per share fee, instead

of a graduated fee based on the number

of shares traded, for agency transactions

in Dual Trading System Securities that

are executed through a floor broker; and

(b) raising the current caps on

transaction fees paid by member firms.5

Additionally, the proposal would

revise the floor broker credit program by

increasing the earned credits available

under the program and by providing

that the Exchange will pay floor brokers

for any unused credits each month. This

credit program is designed to stimulate

growth on the Exchange, enhance the

competitive capability of floor brokers,

and foster cooperation on the

Exchange’s trading floor by rewarding

floor brokers for their work to increase

Exchange revenue.

Finally, the proposed would

reconfigure the Schedule to include all

of its transaction fees in one section of

the Schedule.

2. Statutory Basis

The CHX believes that the proposed

rule change is consistent with Section

6(b)(4) of the Act 6 in that it provides for

the equitable allocation of reasonable

dues, fees, and other charges among its

members.

B. Self-Regulatory Organization’s

Statement of Burden on Competition

The CHX 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

The foregoing rule change establishes

or changes a due, fee, or other charge

imposed by the Exchange and therefore

has become effective pursuant to

Section 19(B)(3)(A)(ii) of the Act 7 and

subparagraph (f)(2) of Rule 19b–4 8

thereunder. 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 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 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 File No.

SR–CHX–00–38 and should be

submitted by January 26, 2001.

1166 Federal Register / Vol. 66, No. 4 / Friday, January 5, 2001 / Notices

9 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3 In Amendment No. 1, the Exchange: replaced

the term ‘‘Nasdaq-100 Shares’’ with ‘‘Nasdaq-100

Index Tracking Stock’’ noted that ‘‘Nasdaq-100

Index Tracking Stock’’ and ‘‘QQQ’’ are service

marks of the Nasdaq Stock Market, Inc. (‘‘Nasdaq’’)

and that the Phlx has entered into a licensing

agreement with Nasdaq to use those marks for

certain purposes; observed that the Commission has

approved a related rule filing, File No. SR–Phlx–

00–54, relating to the listing and trading of Trust

Shares; clarified that a fee for trades not processed

through the Phlx Automated Communication and

Execution System (‘‘PACE’’) will be paid by

members of the Exchange; and clarified that the

Phlx will charge specialists a per-share fee whether

or not an order is executed via PACE. See letter

from Carla Behnfeldt, Counsel, Phlx, to Nancy

Sanow, Assistant Director, Division of Market

Regulation, Commission, dated December 14, 2000

(‘‘Amendment No. 1’’).

4File No. SR–Phlx–00–54.

5Securities Exchange Act Release No. 43717

(December 13, 2000). The proposal is pending

publication in the Federal Register.

6The Nasdaq-100, Nasdaq-100 Index, Nasdaq,

The Nasdaq Stock Market, Nasdaq-100 SharesSM,

Nasdaq-100 Trust SM, Nasdaq-100 Index Tracking

Stock SM, and QQQ SM, are trademarks or service

marks of The Nasdaq Stock Market, Inc. (‘‘Nasdaq’’)

and have been licensed for use for certain purposes

by the Phlx pursuant to a License Agreement with

Nasdaq. The Nasdaq-100 Index (‘‘Index’’) is

determined, composed, and calculated by Nasdaq

without regard to the Licensee, the Nasdaq-100

TrustTM, 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.

7The $1.00 fee for non-PACE trades will be paid

by a member who is trading with a specialist, either

for the member’s own account or for the account of

the member’s customer. See Amendment No. 1,

supra note 3.

8 Id.

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

10 15 U.S.C. 78s(b)(4).

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–317 Filed 1–4–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43776; File No. SR–PHLX–

00–103]

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 Proposed Fees for

Processing of Units of Beneficial

Interest in the Nasdaq-100 Trust,

Series 1

December 28, 2000.

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

8, 2000, 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.

On December 14, 2000, the Exchange

submitted Amendment No. 1 to the

proposed rule change.3 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

fee schedule to accommodate the

trading of Units of Beneficial Interest in

the Nasdaq 100 Trust, Series 1

(‘‘Nasdaq-100 Index Tracking Stock’’),

traded under the symbol and widely

known as QQQ. On June 14, 2000, the

Phlx filed a proposed rule change with

the Commission to permit, among other

things, the trading pursuant to unlisted

trading privileges (‘‘UTP’’), of Nasdaq100 Index Tracking Stock.4 The

proposal has been approved.5 In

addition, the Exchange has obtained a

license to use the Nasdaq-100 Index in

connection with the trading of the

Nasdaq-100 Index Tracking Stock.6

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.

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 provide for fees that will

apply to trading on the Exchange of

Units of Beneficial Interest in the

Nasdaq 100 Trust, Series 1, referred to

as ‘‘Nasdaq 100 Shares.’’ Specifically,

under the Exchange’s proposal the

Exchange will assess no charge to

members for trades entered through the

Phlx Automated Communication and

Execution System (‘‘PACE’’), but will

impose a $1.00 fee for non-PACE

trades.7 Specialists will be charged a fee

of $0.002 per share, with a maximum

charge of $50.00 per trade, whether or

not a trade takes place on PACE.8 No

other Phlx transaction fees will apply to

trades in Nasdaq-100 Index Tracking

Stock. The Exchange represents that,

upon initiation of trading, members will

be notified, by means of a circular, of

the new fees applicable to trading in

Nasdaq-100 Index Tracking Stock.

The Exchange represents that the fees

proposed above for transactions in

Nasdaq-100 Index Tracking Stock are

lower than the fees charged for other

equities already traded on the Exchange.

The Phlx believes that the proposed

lower fees should encourage trading of

Nasdaq-100 Index Tracking Stock, while

ensuring that the amounts collected will

still cover the Exchange’s costs of

administering the trading of this new

product. The Exchange further states

that lower fees should also provide

market participants with a more

affordable market for the trading of this

product. The Phlx states that a more

affordable, competitive market for

trading should attract more order flow

in Nasdaq-100 Index Tracking Stock to

the Exchange, which in turn should

further increase liquidity of Nasdaq-100

Index Tracking Stock, and create a

tighter, more liquid market. The Phlx

represents that increased market

competition should both benefit

investors and protect the public interest

in general.

2. Statutory Basis

The Exchange believes that the

proposal is consistent with Section 6(b)

of the Act,9 in general, and furthers the

objectives of Section (6)(b)(4) 10 in

particular because it applies equally to

all members that would be trading the

Nasdaq-100 Index Tracking Stock and,

therefore, is an equitable allocation of

reasonable fees among Exchange

members.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Phlx represents that it does not

believe 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.