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Notice

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

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Start Preamble November 13, 2000

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 October 25, 2000, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. On November 2, 2000, the Phlx filed Start Printed Page 69981Amendment No. 1 to the proposed rule change.[3] The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

The Exchange, pursuant to Rule 19b-4 under the Act, proposes to amend its fee schedule for Registered Representative registration. Specifically, the initial, maintenance, and transfer registration fees pertaining to Registered Representative registration will each be increased from $25.00 to $45.00. The proposed effective date of the increase is January 1, 2001. Below is the text of the rule change. Additions are italicized and deletions are in brackets.

Fee Schedule

* * * * *

Registered Representative Registration:

Initial[$25.00]$45.00
Maintenance[$25.00 annual]$45.00 annual
Transfer[$25.00]$45.00

II. Self-Regulatory Organization's Statements 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 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 Statutory Basis for, the Proposed Rule Change

1. Purpose

The Exchange proposes to increase its fees for the initial registration, maintenance, and transfer of Registered Representative registrations with the Exchange from $25.00 to $45.00. These fees, which were adopted in 1993,[4] and subsequently adjusted in 1995,[5] 1997 [6] and 1999,[7] are payable by member organizations that apply for, maintain, and transfer Registered Representative registrations. The proposed fee increase would become effective on January 1, 2001. The $45.00 fees apply to year 2001 registrations. Any initial registration in 2000 would continue to be subject to the $25.00 initial registration fee. Similarly, any maintenance and transfer fees incurred for calendar year 2000 would continue to be subject to the $25.00 maintenance or transfer fee. The National Association of Securities Dealers, Inc. (“NASD”) will bill for the year 2001 fees in November 2000, and will thereafter collect the fees for the Exchange.[8]

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 programs are essential to the ability of the Exchange to maintain a fair and orderly market for the investment community.

According to the Exchange, the general costs associated with the Exchange's surveillance and regulatory programs have continued to rise. Since the last Registered Representative fee increase in 1999,[9] costs associated with the Exchange's surveillance and regulatory programs have increased dramatically. This increase in costs is attributable to, among other things, inflationary and competitive pressures upon the cost of staffing, equipment, computer technology as well as expansion of the Exchange's surveillance and regulatory programs. Moreover, the Exchange has listed, and will likely continue to list, new issues and products, which trigger significant additional surveillance and regulatory costs.

2. Statutory Basis

The Exchange believes the proposed rule change is consistent with Section 6(b) of the Act [10] in general and furthers the objectives of Section 6(b)(4) of the Act [11] in particular, in that is provides for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities.

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

The Exchange has neither solicited nor received written comments on the proposed rule change.

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 other charge imposed by the Exchange and, therefore, has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act [12] and Rule 19b-4(f)(2) thereunder,[13] upon the date Amendment No. 1 was received, November 2, 2000. The Exchange intends to implement the fee effective as of January 1, 2001. 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 purpose of the Act.

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 Start Printed Page 69982with 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 Phlx. All submissions should refer to File No. SR-Phlx-00-95 and should be submitted by December 12, 2000.

Start Signature

For the Commission by the Division of Market Regulation, pursuant to delegated authority.[14]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  In Amendment No. 1, the Phlx corrected a typographical error which stated that “initial, maintenance, and transfer registration fees pertaining to Registered Representative registration will each be increased from $125 to $45.” The correct amount of the increase, as stated above, is from $25 to $45. The Phlx also provided a corrected Exhibit B with rule language that conforms to its initial filing. See Letter from Murray L. Ross, Vice President and Secretary, Phlx, to Sapna C. Patel, Law Clerk, Division of Market Regulation, Commission, dated November 1, 2000.

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4.  See Securities Exchange Act Release No. 32833 (September 14, 1993), 58 FR 48922 (September 20, 1993).

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5.  See Securities Exchange Act Release No. 36348 (October 6, 1995), 60 FR 53450 (October 13, 1995).

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6.  See Securities Exchange Act Release No. 39044 (September 10, 1997), 62 FR 48914 (September 17, 1997).

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7.  See Securities Exchange Act Release No. 42122 (November 10, 1999), 64 FR 63098 (November 18, 1999).

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8.  The Exchange has represented that initial, transfer, and maintenance Registered Representative fees have traditionally been billed and collected by the NASD. The NASD would continue to bill for and collect these fees under the proposed rule change. Phone message from Jurij Trypupenko, Counsel, Phlx, to Melinda Diller, Law Clerk, Division, Commission, on October 28, 1999. See Securities Exchange Act Release No. 42122 (November 10, 1999), 64 FR 63098 (November 18, 1999), at footnote 7.

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9.  See supra note 7.

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12.  15 U.S.C. 78s(b)(3)(A)(ii).

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[FR Doc. 00-29711 Filed 1-20-00; 8:45 am]

BILLING CODE 8010-01-M