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Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the American Stock Exchange LLC Relating to Amendments to Fee Schedules

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Start Preamble May 9, 2001.

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 April 9, 2001, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change, and amended such proposed rule change on May 3, 2001,[3] as described in Items I, II, and III below, which Items have been prepared by the Amex. The Amex has designated this proposal as one constituting the establishment or change of a due, fee or other charge imposed by the Amex under Section 19(b)(3)(A)(ii) of the Act [4] and Rule 19b-4(f)(2),[5] which renders the rule effective upon filing with the Commission. 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 Amex proposes to amend the Amex Member Fees Schedule; Floor Fees Schedule; Booth Rental and Order Pads Schedule; and CFD and IDC Fees Schedule. The text of the proposed rule change is available at the Office of the Secretary, the Amex, and 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 Amex 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 Amex 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 Amex proposes to amend certain Exchange fees imposed on Amex members and member organizations as set forth below.

(1) Member Fees:

The Exchange incurs certain expenses in connection with the administering applications for Exchange membership. In order to better align Amex's fees with the actual costs of delivering these services, the Exchange is increasing from $500 to $2,000 the fee for processing membership applications. In addition, the Exchange is imposing a $500 fee for each qualifying exam taken by an applicant for membership beyond the first attempt. These fees will be imposed beginning May 1, 2001.

(2) Floor Fees:

The Exchange is eliminating the current $500 annual Specialist Post Privilege Fee, which is imposed on each individual specialist, and will impose a new annual post fee per podium of $750 beginning July 1, 2001. This fee will be increased to $1,000 for each podium beginning January 1, 2002. These new fees better reflect the maintenance costs borne by the Exchange.

To improve reliability, the Amex recently replaced its wireless telephone system with a SpectraLink system.[6] The new annual charge for all wireless handsets will be phased in as follows: $1,700 per handset from July 2, 2001 to June 30, 2002 and $2,100 per handset beginning July 1, 2002.

The Amex has recently upgraded its booth telephones from an 18-button turret system, for which it charged $600 per year to a new 40-button system. The new annual charge for all turret telephones will be phased in as follows: $900 per telephone from July 1, 2001 to June 30, 2002 and $1,290 per telephone beginning July 1, 2002.

The Amex has incurred significant development and installation expenses in implementing its Booth Automated Routing System (“BARS”) for routing orders to and within the Exchange and will also incur significant annual operation costs. The Exchange is imposing its BARS annual equipment fees of $3,600 per configuration of up to ten hand-held devices, one keyboard, one Central Processing Unit (“CPU”), one monitor, and one printer, with users retaining liability for the cost of any damage, loss, or repairs. These fees will be implemented beginning May 1, 2001.

In order to address security risks that may be associated with loss of photo identification cards used on the Floor, the Exchange is increasing the fee to replace lost photo identification cards from $15 to $100, beginning May 1, 2001. This fee also better reflects Exchange costs associated with card replacements.

For construction and craft services provided by the Exchange at any member's request, the Exchange will charge $50.00 per worker per hour for work performed 8 a.m.-6 p.m. New York time only on the days the Exchange is open for business and $75.00 per hour for worked performed at all other times. These charges serve to eliminate an Exchange subsidy for such services.

(3) Booth Rentals:

The Exchange is restructuring and simplifying annual booth rental charges on a phased in basis as follows:

Booth typeNew fees as of July 1, 2001New fees as of July 1, 2002Former fees
Type 1 (“telephone”)$3,000$3,500$1,600-$2,200.
Type 2 (24 “standard”)4,5004,500Not applicable.
Type 3 (36 “standard”)6,0006,000Not applicable.
Start Printed Page 27188
Type 4 (“machine”)6,0007,000$5,000-$5,400.

The revised fee schedule is designed to provide partial recovery by the Exchange of costs associated with constructing and maintaining booth rental space.

(4) Membership Registration and IDC Fee Schedule:

The Exchange is amending its fee schedule, effective May 1, 2001, applicable to membership registration to bring such charges in line with those of other exchanges. Renewal fees will be raised from $30 to $47, initial fees will be raised from $55 to $60, and termination fees will be raised from $25 to $30.

2. Statutory Basis

The Amex believes the proposed rule change is consistent with the provisions of section 6(b) of the Act [7] in general, and furthers the objectives of section 6(b)(4) of the Act [8] in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among members, issuers, and other persons using Exchange facilities.

B. Self-Regulatory Organization's Statement on Burden on Competition

The Amex does not believe that the proposed rule change will result in 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

No written comments were solicited or received with respect to the proposed rule change.

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 [9] and subparagraph (f)(2) of Rule 19b-4 thereunder [10] because it establishes or changes a due, fee, or other charge imposed by the Exchange. 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. 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 Amex. All submissions should refer to file number SR-Amex-2001-22 and should be submitted by June 6, 2001.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[11]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble


3.  Amendment No. 1 substituted the words “Membership Registration” for “CRD” in the CRD and IDC Fee Schedule in Exhibit A of the original rule filing. See letter from Michael Cavalier, Associate General Counsel, the Amex, to Katherine England, Assistant Director, Division of Market Regulation, the SEC (May 3, 2001).

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6.  The SpectraLink system is a system of wireless phones used by members on the floor for communication on the trading floor. Telephone conversation between Cyndi Nguyen, Attorney, the SEC, and Michael Cavalier, Associate General Counsel, the Amex (April 26, 2001).

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9.  15 U.S.C. 78s(b)(3)(A)(ii).

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[FR Doc. 01-12281 Filed 5-15-01; 8:45 am]