Document ID: SEC-2005-0197-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2005-11-03T05:00Z

[Federal Register: November 3, 2005 (Volume 70, Number 212)]
[Notices]               
[Page 66868-66869]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03no05-88]                         

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52686; File No. SR-Amex-2005-099]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
and Amendment Nos. 1 and 2 Thereto Relating to the Adoption of a Cap on 
Certain Fees for Options on Indexes, Exchange Traded Fund Shares, and 
Trust Issued Receipts

October 27, 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 September 30, 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. On 
October 17, 2005, the Exchange filed Amendment No. 1 to the proposed 
rule change.\3\ On October 21, 2005, the Exchange filed Amendment No. 2 
to the proposed rule change.\4\ 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)(ii) of the 
Act \5\ and Rule 19b-4(f)(2) thereunder,\6\ which renders the proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change, as 
amended, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange made clarifying changes to 
the purpose and statutory basis sections of the proposal and made 
non-substantive changes to the text of the proposed rule change.
    \4\ In Amendment No. 2, the Exchange made clarifying changes to 
the purpose and statutory basis sections of the proposal and non-
substantive changes to the statutory basis section and the text of 
the proposed rule change.
    \5\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \6\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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

    Amex proposes to adopt a cap on fees for transactions in options on 
indexes, Exchange Traded Fund Shares (``ETFs''), and Trust Issued 
Receipts (``TIRs''). The text of the proposed rule change is available 
on Amex's Web site (http://www.amex.comCRS & ), at Amex'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, Amex included statements 
concerning the purpose of, and basis for, the proposed rule change, as 
amended, 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to put in place a cap on certain fees charged 
to members for customer transactions in options on indexes, ETFs, and 
TIRs that exceed certain volume levels.\7\ Specifically, the Exchange 
will provide a volume trade discount to members for customer 
transactions in the form of a cap on transaction, comparison, and floor 
brokerage fees in index, ETF, and TIR options. The fee cap will be 
applied on a trade-by-trade basis. Thus, for customer transactions in 
index, ETF, and TIR options of more than 2,000 contracts, the options 
transaction, comparison, and floor brokerage fees will be charged to 
the member on the first 2,000 contracts only. As the Exchange does not 
currently charge members the transaction, comparison, or floor 
brokerage fees for customer transactions in options on the Nasdaq 100 
Shares (symbol: QQQQ), the fee cap being proposed herein will not be 
extended to options on that ETF.
---------------------------------------------------------------------------

    \7\ Effective September 1, 2005, the Exchange began charging 
members a fee on customer transactions in ETF and TIR options. The 
three types of fees--transaction ($0.08), comparison ($0.04), and 
floor brokerage ($0.03)--result in a total fee on ETF and TIR 
options of $0.15 per contract side. See Securities Exchange Act 
Release No. 52493 (September 22, 2005), 70 FR 56941 (September 29, 
2005).
---------------------------------------------------------------------------

    The purpose of this proposal is to help the Exchange remain 
competitive in these products by providing a large customer fee cap 
similar to those applied by other option exchanges to the trading of 
options on indexes, ETFs, and TIRs. The Exchange proposes that the fee 
cap proposed in this rule filing be effective on October 3, 2005.
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 
is designed to provide for the equitable allocation of reasonable dues, 
fees, and other charges among its members and issuers and other persons 
using its facilities. In particular, the Exchange believes that, since 
other options exchanges have applied similar large customer fee caps to 
the trading of options on indexes, ETFs, and TIRs, the proposed 
customer fee cap will help the Exchange to remain competitive.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    Amex 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

    The Exchange did not solicit or receive any written comments with 
respect to the proposal.

II. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change, as amended, 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. Accordingly, the proposal is 
effective upon filing with the Commission. 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

[[Page 66869]]

in furtherance of the purposes of the Act.\12\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
    \12\ The effective date of the original proposed rule change is 
September 30, 2005, the effective date of Amendment No. 1 is October 
17, 2005, and the effective date of Amendment No. 2 is October 21, 
2005. For purposes of calculating the 60-day period within which the 
Commission may summarily abrogate the proposed rule change, as 
amended, under Section 19(b)(3)(C) of the Act, the Commission 
considers the period to commence on October 21, 2005, the date on 
which the Exchange submitted Amendment No. 2. See 15 U.S.C. 
78s(b)(3)(C).
---------------------------------------------------------------------------

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, 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-2005-099 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-2005-099. 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 the Exchange. 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-2005-099 and should be submitted on or before 
November 25, 2005. 
---------------------------------------------------------------------------

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

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
Jonathan G. Katz,
Secretary.
 [FR Doc. E5-6084 Filed 11-2-05; 8:45 am]

BILLING CODE 8010-01-P