[Federal Register Volume 66, Number 31 (Wednesday, February 14, 2001)]
[Notices]
[Pages 10334-10336]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-3682]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43931; File No. SR-Phlx-00-109]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. Amending Eligibility to Impose Fees for Computer 
Equipment Services, Repairs or Replacements and Relocation of Computer 
Equipment on Foreign Currency Options Participants on the Currency 
Options Trading Floor, While Exempting Track Balls from Fee Schedule 
Coverage

February 6, 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 January 2, 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

[[Page 10335]]

proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    Phlx pursuant to Rule 19b-4 of the Act, proposes to adopt fees \3\ 
for (1) computer equipment services, repairs or replacements on the 
Foreign Currency Options (``FCO'') trading floor and (2) FCO 
participant-requested relocation of computer equipment.\4\ 
Additionally, the Exchange proposes to exempt track ball repairs and 
replacements from the computer equipment services, repairs or 
replacements fees for both members and FCO participants.
---------------------------------------------------------------------------

    \3\ Currently, all members on the Exchange's options and equity 
members on the options and equity trading floors pay a fee for (1) 
computer equipment services, repairs, or replacements and (2) 
member-requested relocation of computer equipment. See Securities 
Exchange Act Release No. 43081 (SR-Phlx-00-53) (July 27, 2000).
    \4\ A fee will not be charged for new installation of computer 
equipment.
---------------------------------------------------------------------------

    The text of the proposed rule change is available at the Office of 
the Secretary, the PCX, 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 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 amend the Phlx's fee 
schedule for (1) FCO computer equipment services, repairs, or 
replacements and (2) FCO participant-requested relocation of computer 
equipment, while exempting track ball repairs or replacements from the 
computer equipment services, repairs and replacement fees.
    First, the Exchange proposes to impose a fee on participants on the 
FCO trading floor for computer equipment services, repairs or 
replacements on the trading floors. Specifically, the Phlx will extend, 
to the foreign currency options trading floor, charges currently 
imposed on members such that $100 will be charged for every service 
call plus $75 an hour, with a minimum of two hours charged per service 
call.\5\ The Exchange staff anticipates that the majority of computer 
services, repairs or replacements will be completed within two hours. 
Participants will not be billed for computer equipment services, 
repairs or replacements when new or refurbished equipment fails in the 
normal and customary manner of usage within 30 days of installation. In 
addition, participants will not be charged for repairing system-wide 
problems, rebooting central processing units and adjusting cables or 
replacing certain extension cables.
---------------------------------------------------------------------------

    \5\ Some component of this amount may reflect Pennsylvania sales 
tax.
---------------------------------------------------------------------------

    These charges are intended to defray the cost of servicing, 
repairing or replacing computer equipment on the FCO trading floor, as 
well as to encourage care in using the computer equipment.\6\ The 
Exchange receives a small percentage of calls for computer equipment 
services, repairs or replacements from participants on the FCO trading 
floor.\7\
---------------------------------------------------------------------------

    \6\ This proposed fee will apply to all such requests with no 
distinction between intentional abuse or normal wear and tear due to 
the difficulties associated with categorizing the types of repairs.
    \7\ The majority of calls are from members on equity trading 
floors. The lower percentage, of FCO repair requests is due to the 
relatively small number of computers and computer related equipment 
in use on the FCO trading floor as compared to the options and 
equity trading floors.
---------------------------------------------------------------------------

    Second, the Exchange proposes to adopt a fee substantially similar 
to that currently imposed on members for an FCO participant-requested 
relocation of a FCO participant's workstation or any other piece of 
their computer equipment on the FCO trading floor. The charges will 
consist of a $100 service fee plus $75 per hour per person moving the 
equipment, with a minimum of two hours charged for each relocation 
request.\8\
---------------------------------------------------------------------------

    \8\ For example, if two individuals take two hours to relocate a 
work station, the member will be charged $100 for the service call, 
plus $300 for moving the equipment ($75  x  four (two people  x  two 
hours)). Again, some component of this amount may reflect 
Pennsylvania sales tax.
---------------------------------------------------------------------------

    The post/equipment relocation fee should assist in defraying the 
costs associated with the moving of computer equipment. FCO 
participant-requested relocations on the trading floor are very time-
consuming and costly because nearly all relocations take place after 
business hours or on the weekends.
    At this time, Exchange staff and members trading floor personnel 
should complete a pre-printed form prior to requesting repair or 
relocation service. A notice describing the equipment repair procedures 
was sent to all floor members prior to the implementation of the fee on 
equity and options floor members, and notice will be given to FCO 
participants as well.
    Under the current fee that is applied to members on equity and 
options trading floor, the Exchange staff had the opportunity to review 
the procedures relating to computer equipment services, repairs, 
replacements and relocations, which include instructions to members and 
Exchange staff as to where the service request forms will be located, 
directions as to how to complete the form, and which department is 
required to forward the forms to the accounting department. The 
procedures also include a provision that states that members will not 
be billed for computer equipment services, repairs or replacements when 
new or refurbished equipment fails in the normal and customary usage 
within 30 days of installation. These same procedures will now be 
followed for computer-related requests received from FCO participants. 
The procedures described above have proven to be an effective way to 
administer these requests, including the billing of fees, and should 
continue to allow for the efficient handling of computer equipment 
services, repairs or replacement and member/participant requested 
relocation of computer equipment while exempting repairs and 
replacements of track ball equipment. The Exchange has determined to 
exempt repairs and/or replacements for track ball devices from the 
computer equipment service fees as regular and recurring maintenance of 
these essential peripheral devices is necessary in the ordinary course 
of business operations.
    The Exchange has determined that the fees for computer equipment 
services, repairs or replacements (exempting track ball equipment) and 
relocation of computer equipment that are charged are appropriate and 
reflect the costs for these services that are incurred by the Exchange. 
The minimum charge of $250 per service call for computer equipment 
services, repairs, replacements or relocations reasonably approximates 
the average costs for these services. However, the minimum charge may 
not cover all the costs involved in repairing, servicing and relocating 
computer equipment. Members and FCO participants will continue to be 
billed on a monthly basis for these charges.
2. Statutory Basis
    The Exchange believes that its proposal to amend its schedule of 
dues, fees and charges to impose a fee for

[[Page 10336]]

computer equipment services, repairs or replacements (while exempting 
track ball equipment repairs or replacements) and a fee for member/
participant-requested relocation of computer equipment is consistent 
with Section 6(b) \9\ of the Act, in general, and Section 6(b)(4) of 
the Act,\10\ in particular, because it provides for the equitable 
allocation of reasonable dues, fees and other charges among its members 
and other persons using its facilities.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 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

    Written comments were neither solicited nor 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 the Exchange, it has become effective 
pursuant to Section 19(b)(3)(A) \11\ of the Act and subparagraph (f)(2) 
of Rule 19b-4 \12\ thereunder. At any time within 60 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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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, N.W., Washington, D.C. 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 also will be 
available for inspection and copying at the principal office of the 
Phlx. All submissions should refer to File No. SR-Phlx-00-109 and 
should be submitted by March 7, 2001.
    For the Commission, by the Division of Market Regulation, pursuant 
to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-3682 Filed 2-13-01; 8:45 am]
BILLING CODE 8010-01-M