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Notice

Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 by the Philadelphia Stock Exchange, Inc. To Conform Its Fee Schedule to Congress' Amendment of Section 31 of the Securities Exchange Act of 1934

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Start Preamble February 1, 2002.

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 January 10, 2002, 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. On February 1, 2002, the Exchange amended the proposal.[3] The Exchange filed this proposal under section 19(b)(3)(A) of the Act,[4] and Rule 19b-4(f)(2) [5] thereunder, which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons.

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

The Exchange proposes to amend its schedule of dues, fees and charges to reflect the revised fees imposed pursuant to section 31 of the Act.[6] Until recently, section 31 of the Act required that national securities exchanges pay to the SEC “a fee at a rate equal to 1/300 of one percent of the aggregate dollar amount of the sales of securities (other than bonds, debentures, other evidences of indebtedness and security futures products) transacted on such national securities exchange * * * ” Congress recently passed the “Investor and Capital Markets Relief Act” (“ICMRA”),[7] which amends section 31 of the Act. The ICMRA will reduce the fee to $15 per $1 million of the aggregate dollar amount of the sale of securities. In addition, section 31 fees would no longer apply to sales of options on securities indexes (other than narrow-based security indexes). The Phlx proposes to amend its schedule of dues, fees and charges to reflect the reduced section 31 fee.[8] The new fee is effective as of December 28, 2001. The text of the proposed rule change is available at the Phlx 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 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 Start Printed Page 5871the 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 Phlx proposes to amend its schedule of dues, fees and charges to incorporate the amended section 31 fee passed by Congress.

2. Statutory Basis

The Exchange believes that the proposed rule change is consistent with section 6 of the Act [9] in general, and in particular, with section 6(b)(4),[10] by providing 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 inappropriate burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others

No written comments were either solicited or 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 [11] and subparagraph (f)(2) of Rule 19b-4 thereunder,[12] because it involves 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. 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 Exchange. All submissions should refer to file number SR-Phlx-2002-02, and should be submitted by February 28, 2002.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[13]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  See January 31, 2002 letter from Cynthia K. Hoekstra, Counsel, Phlx, to Joseph P. Morra, Special Counsel, Division of Market Regulation, SEC (“Amendment No. 1”). In Amendment No. 1, the Phlx provided new text to the proposed rule, and clarified that although the fee referred to in section 31 of the Act is imposed on national securities exchanges, the Phlx imposes this same fee on its members.

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7.  H.R. 1088, 107th Cong. (2001).

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8.  While the fee referred to in section 31 of the Act is imposed on national securities exchanges, the Phlx imposes this same fee on its members. See Amendment No. 1.

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11.  15 U.S.C. 78s(b)(3)(A)(ii).

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[FR Doc. 02-2961 Filed 2-6-02; 8:45 am]

BILLING CODE 8010-01-P