Skip to Content

Notice

Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Philadelphia Stock Exchange, Inc. Relating to the Establishment of a Systems Change and a Fee to Members and Member Organizations for Receiving On-line Options Information

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble Start Printed Page 80975 December 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 November 14, 2000, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“Commission” or “SEC”) 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.

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

The Phlx proposes to effect a systems change and adopt a real-time, trade information fee of $.0025 per contract for members or member organizations receiving option trade information on-line (i.e., electronically) from the Exchange.

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 Phlx 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 Phlx 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 this proposed rule change is to effect an information-related enhancement to the AUTOM System [3] and to amend the Phlx's fee schedule to impose a $.0025 per contract fee to members and member organizations who choose to use this enhancement.

Recently, the Exchange made available a back-office enhancement to the AUTOM System on the options floor that provides option trade information on-line (meaning electronically) on a real-time basis. Members and member organizations can now choose to connect and log on to an interface with the AUTOM System to receive options (equity and index options) transaction information real-time. Specifically, once transaction information is in the AUTOM System, it becomes available to member organizations, who may connect to the feature; member organizations may determine to offer such information to their floor traders electronically.[4] The transaction information covered by this feature includes the type of information generally captured in Exchange systems as a trade.[5]

Currently, such information is available in hard copy (paper ticket) form, which can be confirmed against floor trader positions. The Exchange has created this electronic link in order to facilitate electronic position monitoring for options. The feature is voluntary and does not replace the current hard-copy printing of transaction information. Member organizations choosing to log on to the feature will be charged $.0025 per contract. The Exchange chooses to charge a per contract fee rather than a flat fee for the service to encourage more firms, including small firms, to use this important risk management tool.

2. Statutory Basis

The Exchange believes the proposed rule change is consistent with Section 6(b)(4) and (b)(5) of the Act [6] in that it provides for the equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities and promotes just and equitable principles of trade.

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.

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, which (1) establishes or changes a due, fee, or other charge imposed by the Exchange and (2) effects a change in an existing order-entry or trading system of the Exchange that (i) does not significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; and (iii) does not have the effect of limiting the access to or availability of the system, has become effective pursuant to Section 19(b)(3)(A) of the Act [7] and subparagraph (f)(2) and (f)(5) of Rule 19b-4 thereunder.[8] 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

Interest 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 file 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 at the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at Start Printed Page 80976the principal office of the Phlx. All submissions should refer to File No. SR-PHLX-00-97 and should be submitted by January 12, 2001.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[9]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  AUTOM is the Phlx's Automated Options Market System. See Phlx Rule 1080.

Back to Citation

4.  According to the Exchange, members and member organizations that are logged on to the AUTOM System and choose to receive the options transaction information real-time may determine how to distribute the information to their floor traders, including using hand-held devices. As per telephone conversation between John Dayton, Assistant Secretary and Counsel, Phlx, and Heather Traeger, Attorney, SEC, Division of Market Regulation, on December 13, 2000.

Back to Citation

5.  This information includes the symbol, volume, price, time and clearing information of the traded security.

Back to Citation

6.  15 U.S.C. 78f(b)(4) and (b)(5).

Back to Citation

8.  17 CFR 240.19b-4(f)(2) and (f)(5).

Back to Citation

[FR Doc. 00-32651 Filed 12-21-00; 8:45 am]

BILLING CODE 8010-01-M