[Federal Register Volume 64, Number 249 (Wednesday, December 29, 1999)]
[Notices]
[Pages 73111-73112]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33851]
[[Page 73111]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-42263; File No. SR-Phlx-99-47]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change by the Philadelphia Stock
Exchange, Inc., Relating to the Exemption of Certain Foreign Currency
Options Participants From the Foreign Currency Options Participation
Fee
December 21, 1999.
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 16, 1999, the Philadelphia Stock Exchange, Inc. (``Phlx''
or ``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described as
described in Items I, II, and III below, which Items have been prepared
by Exchange.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Exchange proposes to exempt the foreign currency option
(``FCO'') participants who had contracted to sell their FCO
participations as of July 30, 1999 from payment of the FCO
participation fee.
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. The
text of these statements may be examined at the places species 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
Summary Basis for the Proposed Rule Change
1. Purpose
On June 23, 1999, the Exchange submitted a proposed rule change to
the Commission, to adopt an annual FCO participation fee for all FCO
participants.\3\ The proposed rule change became immediately effective
when it was fully filed.\4\The Exchange stated that it would bill this
fee semi-annually, effective July 1, 1999, and that it would be payable
beginning with FCO participants who held legal title as of July 30,
1999.
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\3\ See Securities Exchange Act Release No. 41780 (August 23,
1999), 64 FR 47887 (September 1, 1999) (SR-Phlx-99-20).
\4\ The Commission deemed the proposed rule change to be filed
on July 21, 1999, the date of the last amendment, due to the
substantive nature of the amendments.
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The Exchange notified all FCO participants about the fee on June
25, 1999. In its notification, the Exchange stated that the FCO
participation fee would not apply to FCO participants who were not
legal title holders as of July 30, 1999.
The Exchange, pursuant to its By-laws,\5\ must provide notice to
the membership at least fourteen days prior to the effective transfer
of legal title to an FCO participation. Within two weeks prior to July
30, 1999, 46 FCO participants contracted to sell their FCO
participants. The fourteen-day notice period of these 4 sales extended
beyond July 30, 1999, and subjected those 46 FCO participants to the
new FCO participation fee.
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\5\ See Phlx By-law Article I, Section 1-1(i); Phlx By-Law
Article XV, Section 15-1.
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On October 20, 1999, the Exchange's Finance Committee discussed
this situation, clarifying that the intent of the FCO participation fee
was to capture only FCO participants who had contracted to sell their
participation as of July 30, 1999.\6\ Accordingly, the Exchange will
exempt FCO participants who had contracted to sell their participations
by that date from payment of the participation fee.
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\6\ The Exchange purchased 41 out of the 46 FCO participants.
The Exchange represents that the purchaser of the remaining FCO
participations will pay a pro rata portion of the participation fee,
calculated from the date the purchaser assumes legal title to the
FCO participations, as provided by Phlx By-law Article XIV, Section
14-7. Telephone conservation between John Dayton, Counsel, Phlx, and
Murrary Ross, Vice President and Secretary, Phlx, and Hong-anh Tran,
Attorney, and Joshua Kans, Special Counsel, Division of Market
Regulation (``Division''), Commission, on November 24, 1999.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6 of the Act \7\ in general, and further the objectives of
Section 6(b)(4) \8\ in particular, in that it provides for the
equitable allocation of reasonable dues, fees and other charges among
its members and other persons using its facilities. The Exchange
believes that the exemption distributes the burden of the fee equitably
because those who would qualify for the exemption have sold their FCO
participation and will not benefit from any improvements implemented
with funds from the fee.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Phlx does not believe that the proposed rule change 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 foregoing rule change establishes or changes a due, fee or
charged imposed by the Exchange and, therefore, has become effective
upon filing pursuant to Rule (19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(2) thereunder.\10\ At any time within 60 days of the filing of
such proposed rule change, the Commission may summarily abrogate such
rate 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 purpose of the Act.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 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.\11\ 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 at
[[Page 73112]]
the principal office of the Phlx. All submissions should refer to File
No. SR-Phlx-99-47 and should be submitted by January 19, 2000.
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\11\ In reviewing this proposal, the Commission has considered
its impact on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
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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).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-33851 Filed 12-28-99; 8:45 am]
BILLING CODE 8010-01-M