Document ID: SEC-2005-0303-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2005-12-01T05:00Z

[Federal Register: December 1, 2005 (Volume 70, Number 230)]
[Notices]               
[Page 72135-72137]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01de05-59]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52812; File No. SR-Amex-2005-118]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Adopt an Options Licensing Fee for Options on Certain StreetTRACKS 
Exchange-Traded Funds and the SPDR Dividend Exchange-Traded Fund

November 21, 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 November 14, 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 the Exchange. Amex has 
designated this proposal as one establishing or changing a due, fee, or 
other charge imposed by a self-regulatory organization pursuant to 
section 19(b)(3)(A) 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).
    \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

    Amex proposes to modify its Options Fee Schedule by adopting a per-
contract license fee for the orders of specialists, registered options 
traders, firms, non-member market makers, and broker-dealers 
(collectively, ``Market Participants'') in connection with options 
transactions in five new streetTRACKS exchange-traded funds (``ETFs'') 
and the SPDR Dividend ETF.
    The text of the proposed rule change is available on the Exchange's 
Internet Web site (http://www.amex.com), at the Exchange's principal 

office, and at 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 has entered into numerous agreements with various

[[Page 72136]]

index providers for the purpose of trading options on certain ETFs. As 
a result, the Exchange is required to pay index license fees to third 
parties as a condition to the listing and trading of these ETF options. 
In many cases, the Exchange is required to pay a significant licensing 
fee to the index provider that may not be reimbursed. In an effort to 
recoup the costs associated with certain index licenses, the Exchange 
has recently established per-contract licensing fees for orders of 
Market Participants that are collected on each option transaction in 
certain designated products in which such Market Participant is a 
party.\5\
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    \5\ See Securities Exchange Act Release No. 52493 (September 22, 
2005), 70 FR 56941 (September 29, 2005).
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    The purpose of the proposal is to charge options licensing fees in 
connection with options on the following streetTRACKS ETFs: (1) 
streetTRACKS DJ Wilshire Small Cap ETF (symbol: DSC); (2) streetTRACKS 
DJ Wilshire Large Cap ETF (symbol: ELR); (3) streetTRACKS DJ Wilshire 
Mid Cap ETF (symbol: EMM); (4) streetTRACKS DJ Wilshire Mid Cap Growth 
ETF (symbol: EMG); and (5) streetTRACKS DJ Wilshire Mid Cap Value ETF 
(symbol: EMV) (collectively, ``streetTRACKS ETFs''). In addition, the 
Exchange also proposes to charge an options licensing fee in connection 
with options on the SPDR Dividend ETF (symbol: SDY) (``SPDR ETF''). 
Specifically, Amex seeks to charge an options licensing fee of $0.10 
per contract side for each streetTRACKS ETF option and $0.09 per 
contract side for each SPDR ETF option, for the order of a Market 
Participants executed on the Exchange. In all cases, the fee would be 
charged only to the Exchange member through whom such order is placed.
    Amex represents that the proposed options licensing fees would 
allow the Exchange to recoup its costs in connection with the index 
license fees for the trading of streetTRACKS ETF and SPDR ETF options. 
The fees would be collected on every Market Participant order executed 
on the Exchange. The Exchange believes that requiring the payment of a 
per-contract licensing fee in connection with streetTRACKS ETF and SPDR 
ETF options by those Market Participants that benefit from the index 
license agreements is justified and consistent with the rules of the 
Exchange.
    The Exchange notes that, in recent years, it has revised a number 
of its fees to better align Amex fees with the actual cost of 
delivering services and reduce Amex's subsidization of such 
services.\6\ The Exchange represents that the implementation of this 
proposal is consistent with the reduction and/or elimination of these 
subsidies. Amex believes that these fees will help to allocate to those 
Market Participants engaging in transactions in streetTRACKS ETF and 
SPDR ETF options a fair share of the related costs of offering such 
options for trading.
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    \6\ See, e.g., Securities Exchange Act Release No. 45360 
(January 29, 2002), 67 FR 5626 (February 6, 2002); Securities 
Exchange Act Release No. 44286 (May 9, 2001), 66 FR 27187 (May 16, 
2001).
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    The Exchange asserts that the proposal provides for an equitable 
allocation of fees as required by section 6(b)(4) of the Act.\7\ In 
connection with the adoption of options licensing fees for streetTRACKS 
ETF and SPDR ETF options, the Exchange notes that charging the options 
licensing fees, where applicable, to all Market Participant orders, 
except for customer orders, is reasonable given the competitive 
pressures in the industry. Accordingly, the Exchange seeks, through 
this proposal, to better align its transaction charges with the cost of 
providing trading products.
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    \7\ Section 6(b)(4) of the Act 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.'' 15 
U.S.C. 78f(b)(4).
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2. Statutory Basis
    The Exchange believes that the proposed rule change 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 
provides for the equitable allocation of reasonable dues, fees, and 
other charges among its members and other persons using its facilities.
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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 
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 \10\ and Rule 19b-4(f)(2) \11\ 
thereunder 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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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 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 No. SR-Amex-2005-118 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-9303.
    All submissions should refer to File Number SR-Amex-2005-118. 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 Commissions 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

[[Page 72137]]

Room. Copies of the 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-2005-118 and should be submitted on 
or before December 22, 2005.

    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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Jonathan G. Katz,
Secretary.
[FR Doc. E5-6727 Filed 11-30-05; 8:45 am]

BILLING CODE 8010-01-P