Document ID: SEC-2006-1325-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2006-10-12T04:00Z

[Federal Register: October 12, 2006 (Volume 71, Number 197)]
[Notices]               
[Page 60201-60203]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12oc06-94]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54565; File No. SR-Amex-2006-84]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to a Suspension of Transaction Charges for Specialist Orders 
in the Nasdaq-100 Tracking Stocksup[supreg] (QQQQ)

 October 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 September 8, 2006, the American Stock Exchange LLC (``Amex'' 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 Amex. The Amex has 
designated this proposal as one establishing or changing a member due, 
fee, or other charge imposed by a self-regulatory organization pursuant 
to 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 the Amex Exchange Traded Funds and 
Trust Issued Receipts Fee Schedule to suspend transaction charges for 
specialist orders in connection with the trading of the Nasdaq-100 
Index Tracking Stock[supreg] (Symbol: QQQQ) from September 8, 2006 
through December 31, 2006. The text of the proposed rule change is 
available on the Amex's Web site at http://www.amex.com, at the 

principal office of the Exchange, and at the Commission's Public 
Reference Room.

[[Page 60202]]

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 Amex included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposal. 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 Exchange proposes to suspend transaction charges for specialist 
orders in the Nasdaq-100 Index Tracking Stocksup[supreg] (QQQQ) from 
September 8, 2006 through December 31, 2006. Previously, the Amex 
suspended the transaction charges of specialist orders in connection 
with the QQQQ through August 31, 2006.\5\
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    \5\ See Securities Exchange Act Release No. 54227 (July 27, 
2006), 71 FR 44055 (August 3, 2006) (SR-Amex-2006-65).
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    Currently, specialist orders are charged $0.0034 ($0.34 per 100 
shares), capped at $300 per trade (88,235 shares). Effective December 
1, 2004, the Nasdaq-100 Index Tracking Stock[supreg] (formerly ``QQQ'') 
transferred its listing from the Amex to the Nasdaq Stock Market, Inc. 
It now trades on Nasdaq under the symbol QQQQ. After the transfer, the 
Amex began trading QQQQ on an unlisted trading privileges basis.
    The Exchange believes that the proposed suspension of transaction 
fees for specialist orders in connection with the QQQQ is consistent 
with Section 6(b)(4) of the Act.\6\ Specifically, the Exchange believes 
that the proposal provides for an equitable allocation of reasonable 
fees among Exchange members largely based on the fact that a specialist 
has greater obligations than other members and is also subject to other 
Exchange fees, in addition to transaction fees.
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    \6\ 15 U.S.C. 78f(b)(4). Section 6(b)(4) of the Act requires 
that the rules of a national securities exchange provide for the 
equitable allocation of reasonable dues, fees, and other charges 
among its members and issuers and other persons using its 
facilities.
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    For example, specialists are subject to a variety of Exchange fees 
other than transaction charges; the Exchange imposes floor fees solely 
on specialists such as a floor clerk fee, a floor facility fee, a post 
fee, and registration fee.\7\ In addition, for those members on the 
floor of the Exchange, a technology fee and membership fees are also 
charged by the Exchange.\8\ Certain market participants, such as 
customers, non-member broker-dealers, market-makers and member broker-
dealers are not subject to the majority of these fees.
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    \7\ The floor clerk, floor facility, post and registration fees 
on an annual basis are $900, $2,400, $1,000 and $800, respectively.
    \8\ A technology fee of $6,000 per year is assessed on all 
specialists and other floor participants at the Exchange. Annual 
membership dues of $1,500 must be paid by all members while annual 
membership fees are payable depending on the type of membership and 
circumstances. Non-members are not subject to these fees.
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    In addition, specialists have certain obligations under Exchange 
rules as well as the Act that do not exist for other market 
participants. For example, pursuant to Amex Rule 170, a specialist must 
maintain a fair and orderly market in his or her assigned securities. 
Other members of the Exchange as well as non-member market participants 
do not have this obligation. To adequately ``make a market'' in 
assigned securities, a specialist unit must be sufficiently staffed \9\ 
and have adequate technology resources to handle the volume of orders 
(especially in the QQQQ) that are sent to the Exchange. As a result, 
the Exchange believes that the proposed suspension of transaction 
charges for specialist orders in the QQQQ is reasonable and equitable 
given the obligations that specialists must adhere to in making 
markets.
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    \9\ See Securities Exchange Act Release No. 53386 (February 28, 
2006), 71 FR 11250 (March 6, 2006) (SR-Amex-2005-110).
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    Further, the Exchange submits that the fee suspension will provide 
greater incentive to the specialist to continue to provide market 
liquidity, rendering the Exchange an attractive venue for market 
participants to execute orders.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \10\ in general, and furthers the 
objectives of Section 6(b)(4) \11\ 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 facilities.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change does not impose 
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

    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

    The foregoing proposed rule change has become effective pursuant to 
Section 19(b)(3)(A)(ii) of the Act,\12\ and paragraph (f)(2) of Rule 
19b-4 thereunder \13\ because it establishes or changes a member due, 
fee, or other charge. 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.
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    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \13\ 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-Amex-2006-84 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 20549-1090.

All submissions should refer to File Number SR-Amex-2006-84. 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

[[Page 60203]]

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 also will be 
available for inspection and copying at the Amex. 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-Amex-2006-84 and should be submitted on 
or before November 2, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
J. Lynn Taylor,
Assistant Secretary.
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    \14\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E6-16848 Filed 10-11-06; 8:45 am]

BILLING CODE 8011-01-P