[Federal Register Volume 66, Number 206 (Wednesday, October 24, 2001)]
[Notices]
[Pages 53822-53823]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-26726]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-44947; File No. SR-Phlx-2001-90]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Philadelphia Stock
Exchange, Inc., Relating to Registration Fees for Registered
Representatives
October 17, 2001.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on October 5, 2001, the Philadelphia Stock Exchange, Inc. (``Plx''
and ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by the Exchange. 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.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
Pursuant to Rule 19b-4 under the Act, the Phlx proposes to amend
its fee schedule for Registered Representative registration.
Specifically, the Phlx proposes to increase the initial Registered
Representative registration fee from $45 to $55 and to increase both
the maintenance and transfer registration fee for Registered
Representatives from $45 to $50. The proposed effective date of the
increase is January 1, 2002.
The text of the proposed rule change appears below. Next text is
italics; deletions are in brackets.
Phlx Fee Schedule
* * * * *
Registered Representative Registration
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Delections New text
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Initial....................................... [$45.00] $55.00
Maintenance................................... \1\ 45.00] \1\ 50.00
Transfer...................................... [45.00] 50.00
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\1\ Annual.
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 and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Items 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
Statutory Basis for, the Proposed Rule Change
(1) Purpose
The purpose of the proposed rule change is to increase the
Exchange's initial Registered Representative registration fee from $45
to $55 and to increase its maintenance and transfer Registered
Representative registration fee from $45 to $50. These fees, which were
adopted in 1993,\3\ and subsequently adjusted in 1995;\4\ 1997,\5\ 1999
\6\ and 2000 \7\ are payable by member organizations that apply for,
maintain, and transfer Registered Representative registration.\8\ The
Proposed fee increases will be effective January 1, 2002. The Phlx
intends that, on its behalf, the National Association of Securities
Dealers, Inc. (``NASD'') will bill for the year 2002 fees in November
2001 and will thereafter collect the fees for the Exchanges.\9\ The
proposed fees will apply to year 2002 registrations. Any initial
registration in 2001 will continue to be subject to the current $45
initial registration fee. Any maintenance and transfer fees incurred
for calendar year 2001 will continue to be subject to the $45
maintenance or transfer fee. The purpose of the proposed rule change is
to address the increased costs associated with maintaining surveillance
and regulatory programs in an increasingly sophisticated trading
environment. The Exchange continues to believe that strong surveillance
and regulatory
[[Page 53823]]
programs are essential to the ability of the Exchange to maintain a
fair and orderly market for the investment community.
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\3\ See Securities Exchange Act Release No. 32833 (September 14,
1993), 58 FR 48922 (September 20, 1993) (order approving File No.
SR-Phlx-93-24).
\4\ See Securities Exchange Act Release No. 36348 (October 14,
1993), 58 FR 48922 (September 20, 1993) (order approving File No.
SR-Phlx-93-24).
\5\ See Securities Exchange Act Release No. 39044 (September 10,
1997), 62 FR 48914 (September 17, 1997) (notice of filing and
immediate effectiveness of File No. SR-Phlx-97-41).
\6\ See Securities Exchange Act Release No. 42122 (November 10,
1999), 64 FR 63098 (November 18, 1999) (notice of filing and
immediate effectiveness of File No. SR-Phlx-99-34).
\7\ See Securities Exchange Act Release No. 43547 (November 13,
2000), 65 FR 69980 (November 21, 2000) (notice of filing and
immediate effectiveness of File No. SR-Phlx-00-95).
\8\ The Phlx originally implemented the fees to offset
regulatory costs based on the number of Registered Representative
registrations maintained by member organizations.
\9\ The Exchange has represented that initial, transfer, and
maintenance Registered Representative registration fees
traditionally have been billed and collected by the NASD. Under the
proposal, as noted above, the NASD will continue to bill for and
collect these fees. Telephone conversation between Murray L. Ross,
Vice President and Security, Phlx, to Yvonne Fraticelli, Special
Counsel, Division of Market Regulation, Commission, on October 15,
2001.
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According to the Phlx, the general costs associated with the
Exchange's surveillance and regulatory programs have continued to rise.
The Phlx notes that since the last Registered Representative fee
increase in 2000,\10\ costs associated with the Exchange's surveillance
and regulatory programs have increased. The Phlx attributes the
increase in costs to, among other things, inflationary and competitive
pressures upon the cost of staffing, equipment, and computer
technology, as well as the expansion of the Exchange surveillance and
regulatory programs in response to increased market share. Moreover,
the Exchange has listed, and will likely continue to list, new issues
and products, which trigger significant additional surveillance and
regulatory costs.
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\10\ See supra note 7.
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(2) Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\11\ in general, and furthers the
objectives of Section 6(b)(4),\12\ in particular, in that is provides
for the equitable allocation of reasonable dues, fees, and offer
charges among its members and other persons using its facilities.
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\11\ 15 U.S.C. 78f(b).
\12\ 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 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
charge imposed by the Exchange and, therefore, has become effective
upon filing pursuant to Rule 19(b)(3)(A)(ii) of the Act \13\ and Rule
19b-4(f)(2) hereunder.\14\ The Exchange intends to implement the fees
effective as of January 1, 2002. 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 furtherance of the purpose 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. 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 Section. Copies of such filing will also
be available for inspection and copying at the principal office of the
Exchange. All submissions should refer to File No. SR-Phlx-2001-90 and
should be submitted by November 14, 2001.
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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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-26726 Filed 10-23-01; 8:45 am]
BILLING CODE 8010-01-M