Document ID: SEC-2005-0014-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2005-09-22T04:00Z

[Federal Register: September 22, 2005 (Volume 70, Number 183)]
[Notices]               
[Page 55639-55641]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22se05-65]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52460; File No. SR-Amex-2005-088]

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

September 16, 2005.
    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 August 31, 2005, 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 Amex. Amex has 
designated the proposed rule change as establishing or changing a due, 
fee, or other charge imposed by the Exchange 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 Amex Equity and Exchange Traded

[[Page 55640]]

Funds and Trust Issued Receipts Fee Schedules (the ``Amex Fee 
Schedules'') to extend the suspension of transaction charges for 
specialist orders in connection with the trading of the Nasdaq-100 
Index Tracking Stock[supreg] (Symbol: QQQQ) from September 1, 2005 
through October 31, 2005. The text of the proposed rule change is 
available on Amex's Web site (http://www.amex.com), at Amex's principal 

office, and from 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 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 Exchange is proposing to extend the suspension of transaction 
charges for specialist orders in QQQQ from September 1, 2005 through 
October 31, 2005. The current suspension of specialist transaction 
charges in QQQQ will otherwise terminate on August 31, 2005.\5\
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    \5\ See Securities Exchange Act Release Nos. 52267 (August 15, 
2005), 70 FR 49338 (August 23, 2005) and 52268 (August 15, 2005), 70 
FR 49336 (August 23, 2005) (proposals previously introducing and 
extending this specialist transaction fee waiver).
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    Specialist orders in QQQQ executed on the Exchange currently are 
charged $0.0037 per share ($0.37 per 100 shares), capped at $300 per 
trade (81,081 shares). Effective December 1, 2004, the Nasdaq-100 Index 
Tracking Stock[supreg] formerly ``QQQ'' transferred its listing from 
Amex to The Nasdaq Stock Market, Inc (``Nasdaq''). It now trades on 
Nasdaq under the symbol QQQQ. After the transfer, Amex began trading 
QQQQ pursuant to unlisted trading privileges.
    The Exchange submits that a suspension of transaction fees for 
specialist orders in connection with QQQQ is consistent with Section 
6(b)(4) of the Act.\6\ Specifically, the Exchange believes that 
extending the suspension of transaction charges for QQQQ specialist 
orders is an equitable allocation of reasonable fees among Exchange 
members. The fact that specialists have greater obligations than other 
members and are also subject to other Exchange fees, in addition to 
transaction fees, supports this proposal to temporarily extend the fee 
suspension.
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    \6\ Section 6(b)(4) states that the rules of a national 
securities exchange must 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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    The Exchange notes that specialists are also subject to a variety 
of Exchange fees other than transaction charges, such as a floor clerk 
fee, a floor facility fee, a post fee, and registration fee.\7\ In 
addition, specialists and other floor members of the Exchange are 
subject to technology and membership fees.\8\ Certain market 
participants, such as customers, non-member broker-dealers and market-
makers, and member broker-dealers are not subject to the majority of 
these fees. In addition, specialist units, unlike registered traders 
and other floor members, must be sufficiently staffed and provide 
adequate technology resources in order to handle the volume of orders 
(especially in QQQQ) that are sent to the specialist post at the 
Exchange. These operational costs that are incurred by a specialist 
further support the Exchange proposal to extend the suspension of QQQQ 
transaction fees on specialist orders.
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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 $3,000 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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    Specialists have certain obligations required by Exchange rules as 
well as the Act that do not exist for other market participants. For 
example, a specialist pursuant to Amex Rule 170 is required to 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. As a result, the Exchange believes that an 
extension of the transaction charge fee waiver for specialist orders in 
QQQQ is reasonable and equitable.
    The Exchange is amending the Amex Fee Schedules to indicate that 
transaction charges for specialist orders in connection with QQQQ 
executed on the Exchange will be further suspended from September 1, 
2005 through October 31, 2005.
2. Statutory Basis
    Amex believes that the proposed rule change is consistent with 
Section 6(b) of the Act \9\ in general and furthers the objectives of 
Section 6(b)(4) of the Act \10\ in particular in that it is intended to 
assure 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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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Amex 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 rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act \11\ and subparagraph (f)(2) of Rule 19b-4 
thereunder \12\ because it establishes or changes a due, fee, or other 
charge imposed by the Exchange. 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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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 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-2005-088 on the subject line.

[[Page 55641]]

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.
    All submissions should refer to File Number SR-Amex-2005-088. 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 such 
filing also will be available for inspection and copying at the 
principal office of 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-2005-088 and should be submitted on or before October 13, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 05-18939 Filed 9-21-05; 8:45 am]

BILLING CODE 8010-01-P