Document ID: SEC-2006-0722-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2006-06-05T04:00Z

[Federal Register: June 5, 2006 (Volume 71, Number 107)]
[Notices]               
[Page 32379-32380]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05jn06-84]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53880; File No. SR-Amex-2006-51]

 
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 Market Vectors-Gold 
Miners Exchange-Traded Fund

May 26, 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 May 19, 2006, 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)(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

    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 on the shares of the Market Vectors-Gold Miners exchange-
traded fund (symbol: GDX).
    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 purpose of the proposal is to adopt a per-contract options 
licensing fee in connection with options on GDX. Amex represents that 
it plans to assess the proposed options licensing fee on members 
commencing May 22, 2006.
    The Exchange has entered into numerous agreements with various 
index providers for the purpose of trading options on certain exchange-
traded funds (``ETFs'') such as GDX. 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, therefore, is to charge an options 
licensing fee in connection with options on the GDX. Specifically, Amex 
seeks to charge an options licensing fee of $0.05 per contract side for 
GDX options for Market Participant orders 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 GDX 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 GDX 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. 
The Exchange believes 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 GDX options a fair share of 
the related costs of offering such options for trading.
    The Exchange asserts that the proposal provides for an equitable

[[Page 32380]]

allocation of fees as required by Section 6(b)(4) of the Act.\6\ In 
connection with the adoption of options licensing fees for GDX options, 
the Exchange believes that charging an options licensing fee, 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 products.
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    \6\ 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 fee change is consistent 
with Section 6(b)(4) of the Act \7\ regarding the equitable allocation 
of reasonable dues, fees, and other charges among its members and other 
persons using its facilities.
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    \7\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change will 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 proposed rule change has become effective pursuant to 
Section 19(b)(3)(A)(ii) of the Act \8\ and Rule 19b-4(f)(2) thereunder 
\9\ 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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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 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-2006-51 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-Amex-2006-51. 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 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-2006-51 and should be submitted on or before June 26, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-8644 Filed 6-2-06; 8:45 am]

BILLING CODE 8010-01-P