Document ID: SEC-2007-0048-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Philadelphia Stock Exchange, Inc.
Posted Date: 2007-01-11T05:00Z

[Federal Register: January 11, 2007 (Volume 72, Number 7)]
[Notices]               
[Page 1359-1361]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11ja07-75]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55028; File No. SR-Phlx-2006-90]

 
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to 
Eliminate Certain License Fees

December 29, 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 December 26, 2006, the Philadelphia Stock

[[Page 1360]]

Exchange, Inc. (``Phlx'' 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 Phlx. The Phlx has designated this proposal as one 
establishing or changing a due, fee, or other charge imposed by the 
Phlx under 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 Phlx proposes to modify its fee schedule to eliminate the 
license fees assessed on the following products: Russell 1000 Growth 
iShares (``IWF''); Russell 2000 iShares (``IWM''); Russell 2000 Value 
iShares (``IWN''); Russell 2000 Growth iShares (``IWO''); Russell 
Midcap Growth iShares (``IWP''); and Russell Midcap Value iShares 
(``IWS''). This proposal is scheduled to become effective for trades 
settling on or after January 2, 2007.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.Phlx.com, at the principal office of the Phlx, 

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 Phlx 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 Phlx 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
    Currently, the Exchange imposes a license fee of $0.10 per contract 
side for equity option and index option ``firm'' transactions on 
certain licensed products after a cap of $60,000 per member 
organization is reached.\5\ The Exchange also assesses a license fee of 
$0.10 per contract side after a 14,000 cap is reached on Registered 
Options Traders (``ROT'') comparison charges and ROT and specialist 
transaction charges in connection with non-AUTOM delivered equity 
option contracts on those products that carry a license fee.\6\ 
Additionally, the Exchange imposes a license fee of $0.05 per contract 
side for dividend and short stock interest strategies in connection 
with certain products that carry license fees, if applicable.\7\ The 
list of product symbols that are assessed a license fee are listed on 
the Exchange's $60,000 ``Firm-Related'' Equity Option and Index Option 
Cap Fee Schedule.
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    \5\ The $60,000 cap applies to all ``firm-related'' equity 
option and index option comparison and transaction charges combined. 
``Firm-related'' charges include equity option firm/proprietary 
comparison charges, equity option firm/proprietary transaction 
charges, equity option firm/proprietary facilitation transaction 
charges, index option firm/proprietary comparison charges, index 
option firm/proprietary transaction charges, and index option firm/
proprietary facilitation transaction charges (collectively ``firm-
related'' charges). See e.g., Securities Exchange Act Release No. 
53287 (February 14, 2006), 71 FR 9186 (February 22, 2006) (SR-Phlx-
2006-10).
    \6\ See Securities Exchange Act Release No. 54659 (October 27, 
2006), 71 FR 64603 (November 2, 2006) (SR-Phlx-2006-67).
    \7\ See e.g., Securities Exchange Act Release No. 54424 
(September 11, 2006), 71 FR 54699 (September 18, 2006) (SR-Phlx-
2006-55).
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    The Exchange is proposing to eliminate the $0.10 per contract side 
and $0.05 per contract side license fees described above on the 
following products: IWF; IWM; IWN; IWO, IWP; and IWS.\8\
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    \8\ The Exchange recently eliminated additional license fees 
from its fee schedule. See Securities Exchange Act Release No. 54874 
(December 5, 2006), 71 FR 75604 (December 15, 2006) (SR-Phlx-2006-
78).
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    The proposed rule change would remove references to the product 
symbols listed above from the Exchange's $60,000 ``Firm Related'' 
Equity Option and Index Option Cap because the Exchange no longer pays 
a license fee in connection with the trading of these products. 
Accordingly, there is no need to assess a license fee. Therefore, for 
trades settling on or after January 2, 2007, the Exchange will 
eliminate the $0.10 and $0.05 license fees for the above-referenced 
products.
2. Statutory Basis
    The Exchange believes that its proposal to amend its schedule of 
fees 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 an equitable allocation of reasonable fees 
and other charges among Exchange members.
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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

    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 either solicited or received.

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 paragraph (f)(2) of Rule 19b-4 \12\ 
thereunder. 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-Phlx-2006-90 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-Phlx-2006-90. 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

[[Page 1361]]

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 the filing also will be available for 
inspection and copying at the principal office of the Phlx. 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-Phlx-2006-90 and should be 
submitted on or before February 1, 2007. 
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-234 Filed 1-10-07; 8:45 am]

BILLING CODE 8011-01-P