[Federal Register Volume 66, Number 248 (Thursday, December 27, 2001)]
[Notices]
[Pages 66957-66958]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-31741]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45165; File No. SR-Amex-2001-102]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the American Stock Exchange LLC Relating to an Increase in 
Floor, Membership and Options Trading Fees

December 18, 2001.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and rule 19b-4 \2\ thereunder, notice is hereby given 
that on December 6, 2001, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. 
Amendment No. 1 was filed on December 17, 2001.\3\ The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Claire P. McGrath, Vice President and Deputy 
General Counsel, Amex, to Nancy Sanow, Assistant Director, Division 
of Market Regulation (``Division''), Commission, dated December 14, 
2001 (``Amendment No. 1''), In Amendment No. 1, the Amex provided 
greater detail as to the basis for the proposed rule change.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange has proposed to increase floor, membership and option 
trading fees under SR-Amex-2001-101,\4\ which was filed for immediate 
effectiveness pursuant to section 19(b)(3)(A)(ii) of the act.\5\ The 
Exchange now seeks to impose these increased floor, membership, options 
trading, and comparison and floor brokerage fees, as set forth in Amex-
2001-101 and described below, as of August 1, 2001. In addition, the 
Exchange proposes to impose the increased license fees and the 
elimination of the fee cap for options as October 1, 2001.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 45163 (December 18, 
2001) for a description of these increased fees.
    \5\ 15 U.S.C. 78s(b)(3)(a)(ii).
---------------------------------------------------------------------------

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 impose floor fees, member fees and options 
transactions, comparison and Floor brokerage fees as of August 1, 2001, 
and certain license fees and elimination of the options fee cap as of 
October 1, 2001. The Exchange filed these fee changes under SR-Amex-
2001-101 and requested that they become immediately

[[Page 66958]]

effective under section 19(b)(3)(A) of the Act.\6\
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78(b)(3)(a).
---------------------------------------------------------------------------

    According to the Exchange, application of the Floor, member, and 
options fees as of August 1, 2001, will allow it to recoup a portion of 
costs it incurred during 2001 in providing enhancements to the Floor, 
which include major improvements in technology, facilities and 
services. These enhancements included a major expansion of the Amex 
trading floor in 2001. The Exchange believes that these fee increases 
better align its fees with the actual cost of delivering services and 
reduce Exchange subsidization of such services. The Exchange notes that 
such subsidies have been longstanding and preceded August 1, 2001. 
Therefore, the Exchange believes that imposing the fee schedule as of 
August 1, 2001, which followed approval by the Amex Board of Governors 
on July 25, 2001, is reasonable and appropriate to fund enhancements 
that benefit all Floor constituencies, including specialists, Options 
Principal Members, Limited Trading Permit Holders, Associate Members, 
and employees of member firms on the Floor.
    Furthermore, the Exchange proposes to apply the license fees for 
NDX, MNX and OEF options as of October 1, 2001 because trading in these 
options on the Exchange began in October 2001. The Exchange notes that, 
because these fees are transaction based, they would apply only after 
trading actually began in October. (NDX and MNX began trading on 
October 12 and OEF began trading and October 11.) The Exchange proposes 
to eliminate the options fee cap as October 1, 2001 to further reduce 
Exchange subsidy of facilities and services on the Floor, as discussed 
above, and because Exchange billing procedures cannot readily 
accommodate elimination of the fee cap prior to October 1, 2001.
    In conclusion, the Exchange states that the increase in options 
transactions charges is necessitated by the large and increasing costs 
incurred by the Exchange in implementing options trading technology. 
Exchange billing of such fees as of August 1, 2001 (for Floor Fees, 
Member Fees and Options Fees) and October 1, 2001 (for the License Fee 
and elimination of options fee cap) will assist in compensating the 
Exchange for costs incurred by the Exchange in delivering specified 
services to members and for providing options trading technology.
(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 is designed to provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and issuers and other persons using its 
facilities.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any 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 with respect to 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 Exchange 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 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 
Amex. All submissions should refer to File No. SR-Amex-2001-102 and 
should be submitted by January 17, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-31741 Filed 12-26-01; 8:45 am]
BILLING CODE 8010-01-M