[Federal Register Volume 66, Number 208 (Friday, October 26, 2001)]
[Notices]
[Pages 54317-54319]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 01-26959]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-44963; File No. SR-PHLX-2001-84]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Philadelphia Stock
Exchange, Inc. Adopting a Fee for Installing and Maintaining Tethers on
the Options Trading Floor
October 19, 2001.
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 August 31, 2001, the Philadelphia Stock Exchange, Inc.
(``Phlx'' or ``Exchange'')
[[Page 54318]]
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 amended the proposed
rule change on October 15, 2001.\3\ The Commission is publishing this
notice to solicit comments on the proposed rule change, as amended,
from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ The Phlx submitted a new Form 19b-4, which replaces and
supersedes the original filing in its entirety (``Amendment No.
1'').
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Phlx proposes to amend its schedule of dues, fees and charges
to adopt a Tether \4\ Initial Connectivity Fee of $1,100 and a Tether
Monthly Service Fee of $150 for installing and thereafter maintaining
tethers that allow a hardwire connection to an existing communication
network (local area network) on the Exchange's options trading floor.
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\4\ A tether is a hardwire connection to an existing Exchange
communication network. It would augment the current wireless network
on the options floor and allow users to connect their handheld
devices to the existing Exchange communication network and thereby
interface with member firm communication networks.
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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, 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
The purpose of the proposed rule change is to amend the Exchange's
schedule of dues, fees and charges to adopt a Tether Initial
Connectivity Fee of $1,100 and a Tether Monthly Service Fee of $150 for
installing and thereafter maintaining tethers that allow a hardwire
connection to an existing communication network (local area network) on
the Exchange's options trading floor. Each tethering device will incur
one initial connectivity fee, and thereafter may be transferred to
another user as well as to another location on the floor without
incurring any additional connectivity fee. The connectivity and monthly
fees will be imposed on the users of such tethers and communication
network, namely registered options traders and floor brokers (but not
specialists) on the options trading floor.
The Exchange has had a wireless communication network on its
options and other trading floors. Due to increases in bandwidth demands
and the use of applications by traders, namely on the options floor,
that are not designated to effectively operate on a shared wireless
network, the Exchange has determined to augment its wireless network
with hardwire access to an existing local area network that would allow
users on the options trading floor to connect with communications
networks of Exchange member firms. The Exchange is installing hardwire
tethers at trading posts across the options trading floor and will
maintain an existing communication network at considerable cost to the
Exchange.\5\ The Exchange believes that the proposed fees are equitable
and reasonable in that they are based on actual and estimated expenses
incurred in installing and maintaining the tethered connections.\6\
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\5\ The decision to install tethers and augment a network on a
trading floor is solely within the Exchange's discretion.
\6\ The restrictions of Exchange Rule 606 and any other rules
applicable to communications would apply to all communications via
the tethers. The Exchange intends in the near future to propose
amendments to Rule 606 and any other relevant rules to clarify their
applicability to tethers.
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In the case of a newly installed tether, the initial connectivity
fee commences upon installation and the monthly fee commences in the
first full calendar month after installation is completed.\7\ For
instance, installation on September 1 would trigger a connectivity fee
on September 1 and a monthly fee beginning October 1 (but not September
1).
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\7\ This fee is eligible for the monthly credit of up to $1,000
to be applied against certain fees, dues and charges and other
amounts owned to the Exchange by certain members. See Securities
Exchange Act Release No. 44292 (May 11, 2001), 66 FR 27715 (May 18,
2001) (SR-Phlx-2001-49).
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2. Statutory Basis
The Exchange believes that is proposal to amend its schedule of
dues, fees and charges is consistent with section 6(b) of the Act,\8\
in general, and furthers the objectives of section 6(b)(4),\9\ in
particular, in that it is an equitable allocation of reasonable fees
among the Exchange's members because the members who pay the additional
amount for the tethers incur the benefit of their use and access to a
communication network.
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\8\ 15 U.S.C. 78f(b).
\9\ 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, as
amended, will impose any inappropriate burden on competition.
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 Exchange has designated the proposed rule change as a fee
change pursuant to section 19(b)(3)(A)(ii) of the Act \10\ and Rule
19b-4(f)(2) thereunder.\11\ Accordingly, the proposal will take effect
upon filing with the Commission. At any time within 60 days of the
filing of Amendment No. 1 to 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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\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 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, as amended, is consistent with the Act. Persons making written
submissions should file six copies thereof with the Secretary,
Securities and Exchange Commission, 450 Fifth Street, NW., Washington,
DC 20549-0609. 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 will also be available for inspection and copying it the
principal office of the Phlx. All submissions should refer to the File
No.
[[Page 54319]]
SR-Phlx-2001-84 and should be submitted by November 16, 2001.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-26959 Filed 10-25-01; 8:45 am]
BILLING CODE 8010-01-M