[Federal Register Volume 65, Number 114 (Tuesday, June 13, 2000)]
[Notices]
[Pages 37190-37191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-14820]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-42872; File No. SR-Amex-00-18]
Self-Regulatory Organizations; American Stock Exchange LLC; Order
Granting Accelerated Approval of Proposed Rule Change to Raise Equity
Options Transaction Fees for Non-Member Broker-Dealers
May 31, 2000.
I. Introduction
On April 7, 2000, the American Stock Exchange LLC (``Amex'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change was published for comment in the
Federal Register on May 10, 2000.\3\ The Commission received no
comments on the proposal. This order grants accelerated approval of the
proposal.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 42752 (May 3, 2000),
65 FR 30154.
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II. Description of the Proposal
The Amex proposes to increase equity options transaction fees for
non-member broker-dealer orders. The Amex currently imposes a
transaction charge on options trades executed on the Exchange. The
charges vary depending on whether the transaction involves an equity or
index option and whether the transaction is executed for a specialist
or market maker account, a member firm's proprietary account, a non-
member broker-dealer, or a customer account. The Amex also imposes a
charge for clearance of options trades and an options floor brokerage
charge, which also depends upon the type of account for which the trade
is executed. In addition, all three types of charges--transactions,
options clearance, and options floor brokerage--are subject to caps on
the number of options contracts subject to the charges on a given
day.\4\
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\4\ The current caps are set at 2,000 contracts for customer
trades and 3,000 contracts for member firm proprietary, non-member
broker-dealer, specialist, and market maker trades.
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Recently, the Amex eliminated all options transaction, clearance,
and floor brokeage fees for customer equity options orders.\5\ To
offset the elimination of these fees for customer equity options
orders, the Exchange raised the equity options transaction fee
[[Page 37191]]
from $0.07 to $0.19 per contract side for member firm proprietary
orders and from $0.08 to $0.17 per contract side for specialist and
market maker orders. To further offset the elimination of options
transaction, clearance and brokerage fees for customer equity option
orders, the Exchange proposes to increase the equity options
transaction fee for non-member broker-dealer orders from $0.07 to $0.19
per contract side. This revised fee will also apply to both LEAPS \6\
and FLEX \7\ options. Equity options clearance and floor brokerage fees
for non-member broker-dealers will remain unchanged at $0.04 and $0.03
per contract side, respectively.
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\5\ See Securities Exchange Act Release No. 42675, (April 13,
2000), 65 FR 21223 (April 20, 2000).
\6\ LEAPS are Long Term Equity Anticipation Securities or
options with durations of up to 36 months. See Amex Rule 903c.
\7\ FLEX options are customized options with individually
specified terms such as strike price, expiration date, and exercise
style. See Amex Rule 900G.
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III. Discussion
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange and in
particular, with the requirements of Section 6 of the Act.\8\
Specifically, the Commission finds that the proposal is consistent with
Section 6(b)(4) of the Act, which requires a registered national
securities exchange to promulgate rules that provide for the equitable
allocation of reasonable dues, fees, and other charges among its
members and other persons using its facilities.\9\ The Commission
believes that the proposed increase in the equity options transaction
fee for non-member broker-dealer orders is not unreasonable and should
not discriminate unfairly among market participants. In addition, the
Commission notes that member firm proprietary orders are charged the
same options transaction fee as is proposed for non-member proprietary
orders.
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\8\ 15 U.S.C. 78f. In approving this rule, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
\9\ 15 U.S.C. 78f(b)(4).
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The Commission finds good cause for approving the proposed rule
change prior to the thirtieth day after the date of publication of
notice thereof in the Federal Register. Approval of the proposal will
enable the Exchange to offset the recent elimination of options
transaction, clearance, and floor brokerage fees for customer equity
options orders in an expeditious manner. The Commission notes that the
Exchange recently raised the equity options transaction fee for member
firm proprietary orders to help offset the elimination of options
transaction, clearance, and floor brokerage fees for customer equity
options orders, and no comments were received on that proposal.\10\
Therefore, the Commission believes it is consistent with Section
6(b)(5) and Section 19(b)(2) of the Act to grant accelerated approval
to the proposed rule change.\11\
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\10\ See Securities Exchange Act Release No. 42675, (April 13,
2000), 65 FR 21223 (April 20, 2000) (approving SR-Amex-00-15).
\11\ 15 U.S.C. 78f(b)(5) and 78s(b)(2).
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IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\12\ that the proposed rule change (SR-Amex-00-18) is approved.
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\12\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-14820 Filed 6-12-00; 8:45 am]
BILLING CODE 8010-01-M