Document ID: SEC-2006-0017-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Philadelphia Stock Exchange, Inc.
Posted Date: 2006-01-09T05:00Z

[Federal Register: January 9, 2006 (Volume 71, Number 5)]
[Notices]               
[Page 1459-1460]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09ja06-83]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53046; File No. SR-Phlx-2005-89]

 
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
to Adopt an Account Fee

January 3, 2006.
    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 23, 2005, 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 Phlx. The Phlx has 
designated this proposal as one changing a fee imposed by the Phlx 
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ which renders the proposal effective upon filing with 
the Commission. 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\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its schedule of fees to adopt a fee 
on member organizations of fifty dollars ($50.00) per month, or any 
part of a month, for each account that a member organization maintains 
with the Exchange beyond the number of permits \5\ billed to that 
member organization (the ``Fee''). The Exchange states that the Fee 
would be effective beginning on January 1, 2006.
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    \5\ See Phlx Rule 908.
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    Below is the text of the proposed rule change. Proposed new 
language is in italics.
* * * * *

APPENDIX A

Permit Fees \6\

Order Flow Provider Permit Fee

    a. Permits used only to submit orders to the equity, foreign 
currency options, or options trading floor (one floor only)--$200.00 
per month.
    b. Permits used only to submit orders to more than one trading 
floor $300.00 per month.

Floor Broker, Specialist, or ROT (including RSQTs and SQTs) or Off-
Floor Trader Permit Fee

    a. First Permit--$1,200.00 per month.
    b. Additional permits for members in the same organization--
$1,000.00 per month.
    Excess Permit Holders--$200.00 per month.
    Other Permit Holders \7\--$200.00 per month.
    Foreign Currency User Fee--$1,200.00 monthly.
    Application Fee--$350.00.
    Initiation Fee \8\--$1,500.00.
    Account Fee--$50.00 monthly for each account beyond the number 
of permits billed to that member organization.
* * * * *
    \6\ The Exchange has established the date of notification of 
termination of a permit as the date that permit fee billing will 
cease. Additionally, a permit holder will be billed only one monthly 
permit fee if the holder transfers from one member organization to 
another previously unrelated member organization as a result of a 
merger, partial sale or other business combination during a monthly 
permit fee period in order to avoid double billing in the month the 
merger or business combination occurred. These policies will be 
effective as of February 2, 2004.
    \7\ A permit holder or the member organization they solely 
qualify must apply for ``other'' status in writing to the Membership 
Services Department. This status requires that a permit holder or 
the member organization have no transaction activity for the 
applicable monthly billing period. Should a permit holder actively 
transact business during a particular month, the highest applicable 
monthly permit fee will apply to such permit holder and member 
organization for that monthly period. The ``other'' status only 
applies to permit holders who solely qualify their member 
organization. These policies will be effective as of February 2, 
2004.
    \8\ This fee is imposed on a member upon election, on a non-
member FCO participant upon the purchase of an FCO participation, 
and on persons or entities registering as approved lessors.
* * * * *

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.

[[Page 1460]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange states that the purpose of the proposed rule change is 
to encourage member organizations to discontinue holding inactive 
trading accounts, which the Exchange believes should, in turn, 
eliminate the need to expend resources to create additional account 
fields. Also, the Exchange states that staff time allocated to 
maintaining account records should be reduced, which should allow for a 
more efficient use of staff resources.
    The Phlx states that its member organizations currently have the 
option to request an unlimited number of trading accounts through the 
Exchange's Membership Services Department. In many instances, multiple 
accounts are assigned at the member organization's request to allow 
them to track their own activity using the Exchange's account 
numbers.\6\ The Exchange states that in many cases, however, accounts 
are not released back to it when they are no longer required by the 
member organization or when a member organization may have requested 
more accounts than needed. The Exchange states that this practice 
limits the number of available accounts and adds to increased staff 
time to maintain accurate records of active accounts and the retiring 
of inactive accounts.
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    \6\ The Phlx states that this proposed rule change does not 
limit the number of accounts a member organization may request.
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    With this proposed rule change, member organizations may have, 
without charge, the number of accounts equal to the number of permits 
billed to that member organization. Any additional accounts requested 
by the member organization would be $50.00 per month, or any part 
thereof, per account. Each account has 22 suffixes or sub-accounts.\7\ 
The Exchange states that there will be no additional charge for 
suffixes assigned within the same account.
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    \7\ For example, account number 202 cna actually be used as 
accounts 202-A, 202-B, etc.
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2. Statutory Basis
    The Exchange believes that its proposal to amend its schedule of 
fees is consistent with Section 6(b) of the Act \8\ in general, and 
furthers the objectives of Section 6(b)(4) of the Act \9\ in 
particular, in that it is an equitable allocation of reasonable fees 
among the Phlx's members.
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    \8\ 15 U.S.C 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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.

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 proposed rule change has been designated as a fee 
change pursuant to Section 19(b)(3)(A)(ii) of the Act \10\ and Rule 
19b-4(f)(2) \11\ thereunder, because it establishes or changes a due, 
fee, or other charge imposed by the Exchange. Accordingly, the proposal 
will take effect upon filing with the Commission. 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.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
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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. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to rule-comments@sec.gov. Please include 

File Number SR-Phlx-2005-89 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-0609.

All submissions should refer to File Number SR\Phln-2005-89. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). 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 the filing 
also will be available for inspection and copying at the principal 
office of the Phlx. All comments received will be posted without 
change; the Commission does not edit personal identifying information 
from submissions. You should submit only information that you wish to 
make available publicly. All submissions should refer to File Number 
SR-Phlx-2005-89 and should be submitted on or before January 30, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-61 Filed 1-6-06; 8:45 am]

BILLING CODE 8010-01-P