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Notice

Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. Relating to Fees for Continued Listings and Options Floor Access

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Start Preamble November 19, 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 29, 2001, the Pacific Exchange, Inc. (“PCX” or “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.

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

Pursuant to rule 19b-4 under the Act,[3] the Exchange proposes to modify its Schedule of Fees and Charges for Continued Listings and Options Floor Access.[4]

The text of the proposed rule change appears below. New text is in italics; deletions are in brackets.

Schedule of Fees and Charges for Exchange Services

* * * * *

PCX Options: Floor and Market Maker Fees

*    *    *    *    *
Continued Listings Fee[$500 per month per eligible issue] Difference between $500 and average monthly revenue for issues with less than $500 in volume based charges (average monthly revenue based on trailing 3 months).
*    *    *    *    *
[Badges][$30 initial issuance fee $30 per booth for booth clerks, $60 per month for stock firm clerks, hard badge managers, and all other floor personnel, $5 per day for temporary badge; $30 per month maximum $100 replacement fee].
Options Floor Access Fee$130 per month for all registered floor members and personnel, with a cap of $5,000 per month per firm.

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 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 decrease its continued Listings Fee in conjunction with an increase of its Options Floor Access Fee to, as the Exchange believes, distribute Exchange costs more evenly between all trading participants.

1. Continued Listings Fee

The Exchange states that a $500 Continued Listings Fee is applied monthly to options issues that generate less than $500 in monthly volume-based charges (including transaction, data entry, and comparison charges) and is based on a three-month trailing average. Start Printed Page 59040The fee applies to the Lead Market Marker (“LMM”) in the particular issue. If the LMM elects not to pay the Continued Listings Fee for an issue meeting these criteria, it then becomes eligible for reallocation or delisting. Under the Exchange's proposal, the Continued Listings Fee will change from a flat $500 per month to the incremental difference between the average monthly revenue generated by the issue and $500. For example, for an issue generating $300 in average monthly revenue, the Continued Listings Fee will be $200 per month under the new schedule, compared to the $500 fee that would have applied under the original fee schedule.

2. Options Floor Access Fee

The Exchange proposes to eliminate the current monthly Badge Fee. The Exchange states that this fee is currently $30 per month for booth clerks, $60 per month for other staff, $5 per day for temporary badge with a $30 per month maximum, and a $100 replacement fee. The Exchange proposes to replace these fees by a new Options Floor Access Fee of $130 per month for all registered floor members and personnel, with a cap of $5,000 per month on a member firm basis. The Exchange states that the intent of this rate change is to maintain a rate schedule that is competitive on an overall basis, while generating funds to help defray the costs involved in operating and maintaining the trading floor.

(2) Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act,[5] in general, and furthers the objectives of section (b)(4),[6] in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among its members.

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 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 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 [7] and rule 19b-4(f)(2) thereunder.[8] 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.

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-PCX-2001-41 and should be submitted by December 17, 2001.

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

Start Signature

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

4.  The Exchange states that it intends to implement the proposed charges beginning November 1, 2001. Telephone Conversation between Cindy Sink, Senior Attorney, PCX, and Christopher Solgan, Law Clerk, Division of Market Regulation, Commission, on November 6, 2001.

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7.  15 U.S.C. 78(s)(b)(3)(A)(ii).

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[FR Doc. 01-29359 Filed 11-23-01;845am]

BILLING CODE 8010-01-M