Document ID: SEC-2007-0029-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Stock Clearing Corp. of Philadelphia
Posted Date: 2007-01-08T05:00Z

[Federal Register: January 8, 2007 (Volume 72, Number 4)]
[Notices]               
[Page 832-834]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08ja07-100]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55016; File No. SR-SCCP-2006-04]

 
Self-Regulatory Organizations; Stock Clearing Corporation of 
Philadelphia; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to Fees Associated With the Trade Processing of 
Equity Securities in Connection With XLE

December 28, 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 November 2, 2006, Stock Clearing Corporation of Philadelphia 
(``SCCP'') 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 SCCP. SCCP filed the 
proposed rule change under Section 19(b)(3)(A)(ii) \3\ of the Act and 
Rule 19b-4(f)(2) \4\ thereunder so that the proposal was 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

    SCCP proposes to amend its fee schedule to reflect fees associated 
with the trade processing of equity securities through SCCP in 
connection with the new equity trading system of the Philadelphia Stock 
Exchange, Inc.

[[Page 833]]

(``Phlx'') (``XLE'').\5\ Under XLE, Phlx will no longer operate a 
physical trading floor for equity securities or the Philadelphia Stock 
Exchange Automated Communication and Execution (``PACE'') \6\ system. 
Therefore, SCCP proposes to amend its fee schedule as set forth below 
to: (1) Accommodate the trade processing of equity securities on XLE 
once XLE is launched; (2) delete any fees that will become obsolete 
under XLE, and (3) make other minor technical changes to its fee 
schedule.
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    \5\ XLE will provide the opportunity for entirely automated 
executions to occur within a central matching system accessible by 
Phlx members and member organizations and their sponsored 
participants. Securities Exchange Act Release No. 54538 (September 
28, 2006), 71 FR 59184 (October 6, 2006) [File No. SR-Phlx-2006-43]. 
Phlx filed a separate proposed rule change [File No. SR-Phlx-2006-
70] with the Commission to adopt a Phlx fee schedule for trading 
equity securities on XLE.
    \6\ PACE was Phlx's order routing, delivery, execution, and 
reporting system for its equity trading floor. Exchange Rules 229 
and 229A.
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, SCCP 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. SCCP 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

    The purpose of the proposed rule change is to amend SCCP's fee 
schedule to accommodate the trade processing of equity securities on 
XLE once XLE is launched.\7\ The fees will be assessed on SCCP 
participants. Specifically, SCCP will change its account fees by 
charging an account maintenance fee of $150.00 per month for RIO 
accounts with 20 or fewer trades per month and $250.00 per month for 
RIO accounts with over 20 trades per month. An account maintenance fee 
of $650.00 per month will be assessed for margin accounts.\8\
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    \7\ The text of the amended fee schedule can be found at http://www.phlx.com/SCCP/sccp_rules/SR-SCCP-2006-04.pdf
    \8\ The term ``RIO'' means Regional Interface Organization, 

which is the system through which SCCP transmits and receives trade 
data from the National Securities Clearing Corporation (``NSCC'') 
for SCCP members that are also NSCC members. SCCP Rule 1.
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    SCCP will also charge the following trade recording fees for XLE 
trades: $0.47 per side for Blue tickets; \9\ $0.30 per trade (maximum 
of $100,000 per month) for XLE market maker \10\ trades cleared through 
a SCCP margin account; and $0.47 per trade for proprietary trades 
cleared through a SCCP margin account. SCCP will not charge trade 
recording fees for any other XLE trades.
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    \9\ A Blue ticket refers to a Phlx XLE execution where the 
clearing information is then submitted to SCCP from a source other 
than XLE, such as orders entered over technology provided by Phlx 
for two-sided orders.
    \10\ The term ``market maker'' refers to a Phlx member 
organization that acts as a market maker pursuant to Phlx Rules 170 
et seq. Phlx Rule 1(1).
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    SCCP is renaming its ``value fees'' as ``transaction fees'' on Blue 
tickets and Yellow tickets. Those fees will be $0.0012 per share per 
side for RIO accounts and $0.035 per $1,000 of contract value per side 
for margin accounts. The maximum transaction fee for both RIO and 
margin accounts will be $25.00 per trade per side.\11\
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    \11\ Thus, a SCCP participant that currently uses a RIO account 
and submits orders to the Phlx through Phlx's PACE system would not 
experience a material increase in their trade recording fees and 
transaction (formally value) fees under this proposal by continuing 
to use a RIO account and submitting orders to Phlx through the XLE 
system.
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    SCCP believes that the fees set forth above are competitive and 
should help to encourage Phlx members to clear through SCCP.
    SCCP proposes to delete: (1) Trade recording fees for PACE trades 
and for specialist trades matching with PACE trades; (2) specialist 
(other than remote specialists) discounts for trades cleared through a 
SCCP margin account; (3) ETF fees, along with associated disclaimers; 
and (4) SCCP transaction charges (remote specialists only). The purpose 
of these deletions is to update the fee schedule to delete the charges 
that have become obsolete under XLE. The purpose of making the minor 
technical changes to SCCP's fee schedule, such as renumbering the 
categories of fees, is to update the fee schedule to incorporate the 
proposed changes described above.
    The remaining fees on the SCCP fee schedule will continue to be 
assessed on SCCP members.\12\
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    \12\ These fees include additional suffix account fees, non-XLE 
trade recording fees for Yellow tickets, treasury transactions, 
margin account interest, research fees, computer transmissions/
tapes, P&L statement charges, buy-ins, and trade ticket adjustment 
fees.
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    SCCP believes that proposed rule change is consistent with Section 
17A of the Act and with Section 17A(b)(3)(D) in particular because it 
provides for the equitable allocation of reasonable fees and other 
charges among its participants.

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

    SCCP 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 proposed rule change has become effective pursuant to 
Section 19(b)(3)(A)(ii) of the Act \13\ and Rule 19b-4(f)(2) \14\ 
thereunder because it establishes or changes a due, fee, or other 
charge. 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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    \13\ 15 U.S.C. 78(s)(b)(3)(A)(ii).
    \14\ 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-SCCP-2006-04 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-SCCP-2006-04. 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/

[[Page 834]]

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 SCCP. 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-SCCP-2006-04 and should be submitted on or before January 29, 2007.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E6-22659 Filed 1-5-07; 8:45 am]

BILLING CODE 8011-01-P