Document ID: SEC-2006-0180-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2006-02-10T05:00Z

[Federal Register: February 10, 2006 (Volume 71, Number 28)]
[Notices]               
[Page 7087-7089]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10fe06-126]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53232; File No. SR-Amex-2006-008]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to the Specialist Transaction Fee

February 6, 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 1, 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 Amex. The Exchange 
has designated this proposal as one establishing or changing a due, fee 
or other charge imposed by the Exchange under section 19(b)(3)(A),\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).
    \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 Exchange proposes to revise its Specialist Transaction Fee. The 
text of the proposed rule change is available on the Amex's Web site at 
http://www.amex.com, the Office of the Secretary, the Amex, and at the 

Commission's Public Reference Room.

[[Page 7088]]

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 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. 
Amex 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
    Effective with transactions beginning October 3, 2005, the Exchange 
increased the Specialist Transaction Fee from $.00005 to $.00007 of the 
total value of a specialist's transactions in equities.\5\ After 
further consideration, analysis of the impact of the fee increase and 
discussions with its members, the Exchange proposes to rollback the 
increase in the Specialist Transaction Fee to $.00005. The increase in 
the Specialist Transaction Fee implemented in October 2005 was part of 
a number of changes to the Equity Fee Schedule, the purpose of which 
was to generate additional revenue for the Exchange and to create 
additional incentives for market participants to send order flow to the 
Amex. For market participants other than the specialists, the changes 
in the aggregate contributed to the increase in revenue for the 
Exchange. The changes to fees imposed on the specialists, which also 
generated an increase in revenue, included an increase in the 
Specialist Transaction Fee and the elimination of a rarely used 
exemption from the Transaction Fee for trades in paired securities.
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    \5\ See Securities Exchange Act Release No. 52701 (October 28, 
2005), 70 FR 67504 (November 7, 2005) (notice of filing and 
immediate effectiveness of SR-Amex 2005-101).
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    According to the Exchange, the Specialist Transaction Fee is based 
on the dollar value of equity shares executed by the specialist. As a 
result, specialists trading high-priced and/or high volume securities 
account for a disproportionate amount of the revenue generated by the 
fee. The recent increase in the fee exacerbated this result. Rolling 
back the increase will alleviate, in part, this disproportionate impact 
on certain specialists. The rollback of the increase in the Specialist 
Transaction Fee will result in a decrease in the additional revenues 
expected to be generated by the recent changes to the Equity Fee 
Schedule. The Exchange represents that this decrease will not result in 
an increase or other revisions to fees charged to other market 
participants.
    Notwithstanding the proposed reduction in the Specialist 
Transaction Fee,\6\ the Exchange believes that the recent changes to 
the Equity Fee Schedule continue to be an equitable allocation of 
reasonable fees among its members, issuers and other users of its 
facilities.
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    \6\ Amex clarified that although it refers in this sentence to 
the proposed rollback of the Specialist Transaction Fee from $.00007 
to $.00005 as a ``rebate,'' it is more accurately characterized here 
as a ``reduction'' in the Specialist Transaction Fee. Telephone 
conversation between Claire McGrath, Senior Vice President and 
General Counsel, Amex, and Johnna B. Dumler, Attorney, Division of 
Market Regulation, Commission, on February 6, 2006.
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    In a separate filing, submitted pursuant to section 19(b)(2) of the 
Act,\7\ the Exchange is also requesting approval to rebate the amount 
of increase in the Specialist Transaction Fee collected since October 
3, 2005.\8\
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    \7\ 15 U.S.C. 78s(b).
    \8\ See SR-Amex-2005-130.
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2. Statutory Basis
    The Amex believes that the proposed rule change 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 designed 
to assure the equitable allocation of reasonable dues, fees and other 
charges among its members and issuers and other persons using its 
facilities. Specifically, the Exchange is proposing to eliminate a 
recent fee increase that it believes disproportionately impacts some 
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 Amex 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 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 rule change has become effective pursuant to section 
19(b)(3)(A) of the Act \11\ and subparagraph (f)(2) of Rule 19b-4 
thereunder,\12\ since it establishes or changes a due, fee or other 
charge imposed by the Exchange.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such 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 the furtherance of the purposes of the Act.

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-Amex-2006-008 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-Amex-2006-008. 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

[[Page 7089]]

Section. Copies of such filing also will be available for inspection 
and copying at the principal office of the 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 No. SR-Amex-2006-008 and should be submitted on or 
before March 3, 2006.
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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\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6-1843 Filed 2-9-06; 8:45 am]

BILLING CODE 8010-01-P