Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), and Rule 19b-4 thereunder, notice is hereby given that on January 28, 2004, the Pacific Exchange, Inc. (“PCX” 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 Exchange. The PCX has designated this proposal as one establishing or changing a due, fee, or other charge imposed by the PCX under section 19(b)(3)(A)(ii) of the Act, 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.
17 CFR 240.19b-4.
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange proposes to amend the Market Maker Fees portion of its Schedule of Fees and Charges (“Schedule”) to adopt a temporary waiver of the Market Maker fees for those Market Makers that use more than one seat. The text of the proposed rule change is available at the PCX and at the Commission.
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 PCX included statements concerning the purpose of and basis for its proposal and discussed any comments it received regarding the proposal. The text of these statements may be examined at the places specified in item IV below. The PCX 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 Exchange proposes to amend the Market Maker Fees portion of the Schedule to adopt a temporary waiver of the Market Maker fees for those Market Makers that use more than one seat.
Under the current Schedule, all Market Makers are assessed a fee of $1,750 per month for each seat that such Market Maker holds a primary appointment. In connection, PCX Rule 6.35(g)(2) permits Market Makers to increase the number of issues within their primary appointments depending on the number of seats that the Market Maker holds. Hence, a Market Maker benefits with additional issues as a result of holding multiple seats.
See PCX Rule 6.35(g)(2).
The Exchange proposes to temporarily waive the $1,750 Market Maker fee for all Market Makers for each additional seat (for which the Market Maker holds a primary appointment) beyond the first seat held by such Market Maker. In other words, a Market Maker will only be assessed one Market Maker fee of $1,750 per month whether the market Maker utilizes one seat or multiple seats. The PCX believes that a temporary waiver of the Market Maker fee in this limited circumstance is appropriate to encourage participation by a larger number of Market Makers on PCX Plus. As PCX Plus continues to expand, this temporary waiver will provide Market Makers with an incentive to take on a larger number of issues without incurring additional Market Maker fees. Therefore, the added participation should result in increased liquidity, which, in turn, will further competition. This waiver will remain in effect until April 30, 2004, or such earlier date as determined by the Exchange.
The Commission notes that the PCX is required to file a proposed rule change if it decides to terminate the fee waiver before April 30, 2004.
2. Statutory Basis
The Exchange believes the proposal is consistent with section 6(b) of the Act, in general, and section 6(b)(4) of the Act, in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among its members.
15 U.S.C. 78f(b)(4).
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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
Written comments on the proposed rule change were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
The proposed rule change has become effective pursuant to section 19(b)(3)(A)(ii) of the Act and subparagraph (f)(2) of Rule 19b-4 thereunder, because it establishes or changes a due, fee, or other charge. At any time within 60 days of the filing of 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.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposal 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. Comments may also be submitted electronically at the following e-mail address: rule-comments@sec.gov. All comment letters should refer to File No. SR-PCX-2004-04. This file number should be included on the subject line if e-mail is used. To help the Commission process and review comments more efficiently, comments should be sent in hardcopy or by e-mail but not by both methods. 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 the principal office of the PCX. All submissions should refer to file number SR-PCX-2004-04 and should be submitted by March 5, 2004.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-3194 Filed 2-12-04; 8:45 am]
BILLING CODE 8010-01-P