Document ID: SEC-2006-0366-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Pacific Exchange, Inc.
Posted Date: 2006-03-20T05:00Z

[Federal Register: March 20, 2006 (Volume 71, Number 53)]
[Notices]               
[Page 14046-14047]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20mr06-63]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53476; File No. SR-PCX-2006-14]

 
Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of 
Filing of Proposed Rule Change To Reduce the Fee Charged to a Lead 
Market Maker When It Transfers Options Issues to Another Lead Market 
Maker

March 13, 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 February 23, 2006, the Pacific Exchange, Inc. (``PCX'' 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 PCX. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange is proposing to modify its rate schedule retroactive 
to September 26, 2005 to allow for the Exchange to reduce the fee it 
charges a Lead Market Maker (``LMM'') when it transfers options issues 
to another LMM. The text of the proposed rule change is available on 
the Exchange's Web site, http://www.archipelago.com, at the Exchange's 

Office of the Secretary, 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 PCX 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 PCX 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 purpose of this filing is to reduce the fee that the PCX 
charges an LMM, when the LMM transfers an allocated options issue to 
another LMM. The PCX presently charges an LMM a $1000 fee, per issue, 
in the event that the LMM transfers the issue to another LMM, in 
accordance with the PCX allocation procedures. The $1000 per issue fee 
is subject to a cap when multiple issues are included as part of the 
same transfer. Under this proposal, the new fee will be $100 per issue 
transferred. The new lower fee will not be subject to a rate cap when 
multiple issues are transferred.
    On September 26, 2005, Archipelago Holdings Inc. acquired the PCX. 
After reviewing fees and charges, new management has determined that 
for business purposes certain fees should be changed. The $1000 fee 
that the PCX previously assessed LMMs was originally established to 
offset the cost associated with issue transfers. At this time, the PCX 
is willing to absorb most of the costs associated with issue transfers, 
and the PCX has determined that the proposed $100 per issue transfer 
fee is warranted. The Exchange proposes to make this fee effective 
retroactive to September 26, 2005, which coincides with the date that 
Archipelago Holdings Inc. acquired the Exchange. The PCX will review 
all transfers that have occurred or may occur from September 26, 2005 
through the effective date of this proposal and will make any fee 
adjustments that are

[[Page 14047]]

deemed warranted pursuant to the proposed rate schedule contained in 
this filing.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) \3\ of the Act, in general, and Section 6(b)(4) \4\ of the Act, in 
particular, in that it provides for the equitable allocation of 
reasonable dues, fees, and other charges among its members.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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

    The Exchange did not solicit or receive any written comments with 
respect to the proposed rule change.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. By order approve the proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-PCX-2006-14 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-PCX-2006-14. 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 PCX. 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-PCX-2006-14 and should be submitted on or before April 
10, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
---------------------------------------------------------------------------

    \5\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
 [FR Doc. E6-3985 Filed 3-17-06; 8:45 am]

BILLING CODE 8010-01-P