Skip to Content

Notice

Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment Nos. 1 and 2 Thereto by the American Stock Exchange LLC to Establish Examination Fees on Member Firms for Which the Amex Is the Designated Examining Authority

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 April 16, 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 February 28, 2002, the American Stock Exchange LLC (“Amex” 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 March 27, 2002, the Amex amended the proposal.[3] The Amex again amended the proposal on April 4, 2002.[4] The Amex has designated this proposal as one establishing or changing a due, fee, or other charge imposed by the Exchange under section 19(b)(3)(A)(ii) of the Act,[5] 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.

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

The Amex proposes to amend its Member Fees Schedule to impose quarterly Examination Fees on member firms for which the Amex is the Designated Examining Authority (“DEA”). The text of the proposed rule change is available at the Amex 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 its proposal and discussed any comments it received regarding the proposal. 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

For each member firm for which the Amex serves as the DEA pursuant to Rule 17d-1 under the Act,[6] the Amex proposes to charge an Examination Fee of $.00040 per dollar of gross revenue, as reported in the firm's FOCUS Report (Form X-17A-5 or replacement form). FOCUS Reports are filed either quarterly or annually. This fee is subject to a quarterly minimum fee of $750 for firms that engage in public business and $250 Start Printed Page 19784for firms that do not engage in public business. In order to reduce the potential impact on member firms that operate or are otherwise affiliated with other entities subject to the fee, the Exchange will impose on member firms operating additional entities (e.g., affiliated broker-dealers) 50% of the minimum fees for each additional entity.

The proposed fee is intended to permit the Exchange to recover a portion of the regulatory expenses incurred by the Exchange in its performance of its DEA responsibilities.[7] The Amex notes that the proposed fee is comparable to member fees imposed by the Chicago Board Options Exchange and New York Stock Exchange in connection with the DEA function of those exchanges.[8]

The proposed fees will be designated “Examination Fees” under the Exchange's Member Fees Schedule, attached as Exhibit A. In addition to adding the Examination Fees, the Member Fees Schedule has been revised to include member fees previously filed with the Commission, including: (1) under revised Section II (Initiation Fees), the Qualifying Membership Retesting Fee,[9] the Regular and Options Principal Special Transfer (Lease) fee under Article VII, Section 1(c) of the Exchange Constitution; [10] and (2) all fees under revised Section III (Membership Fees), including interim member fees,[11] fees for Associate Members and Off-Floor traders,[12] and Specialist Fees.[13] Former Section III (Permits), which, with the exception of Limited Trading Permit fees, included fees that are no longer applicable and have been deleted, and former Section IV (Access Fees), which previously included only the electronic access fee, have been consolidated into revised Section III (Membership Fees).

2. Statutory Basis

The Exchange believes that the proposal is consistent with section 6(b) of the Act [14] in general and furthers the objectives of section 6(b)(4) of the Act [15] in particular in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among Amex members and issuers and other persons using the Amex's facilities.

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

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 [16] and subparagraph (f)(2) of Rule 19b-4 thereunder,[17] because it establishes or changes a due, fee, or other charge imposed by the Amex. 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.[18]

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-2002-10 and should be submitted by May 14, 2002.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[19]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  See March 26, 2002 letter from Geraldine M. Brindisi, Vice President and Corporate Secretary, Amex to Nancy Sanow, Assistant Director, Division of Market Regulation (“Division”), SEC and attachments (“Amendment No. 1”). Amendment No. 1 completely replaces and supersedes the original proposal.

Back to Citation

4.  See April 3, 2002 letter from Michael Cavalier, Associate General Counsel, Amex, to Nancy Sanow, Assistant Director, Division, SEC and attachments (“Amendment No. 2”). In Amendment No. 2, the Amex provided additional language describing the purpose of the proposed rule change, and provided a new Exhibit A that completely replaces and supersedes the previous Exhibits A filed with the Commission. For purposes of calculating the 60-day abrogation period, the Commission considers the abrogation period to have commenced on April 4, 2002.

Back to Citation

5.  15 U.S.C. 78s(b)(3)(A)(ii).

Back to Citation

7.  The fee is not designed to generate revenue. Telephone conversation between Michael Cavalier, Associate General Counsel, Amex, and Joseph Morra, Special Counsel, Division, SEC, April 15, 2002. The Commission expects that the Amex will monitor the fee carefully, and should the Amex collect more than is necessary to offset costs incurred in the performance of its DEA responsibilities, the Commission expects the Amex to adjust the fee.

Back to Citation

8.  See Securities Exchange Act Release Nos. 43144 (August 10, 2000), 65 FR 50258 (August 17, 2000) (SR-CBOE-2000-24) and 20843 (April 9, 1984), 49 FR 15042 (April 16, 1984) (SR-NYSE-84-7).

Back to Citation

9.  Securities Exchange Act Release No. 44286 (May 9, 2001), 66 FR 27187 (May 16, 2001) (SR-Amex-2001-22).

Back to Citation

10.  Securities Exchange Act Release Nos. 23823 (November 18, 1986), 51 FR 42955 (November 26, 1986) (SR-Amex-86-28) and 40426 (September 10, 1998), 63 FR 49766 (September 17, 1988) (SR-Amex-98-32).

Back to Citation

11.  Securities Exchange Act Release No. 43016 (July 7, 2000), 65 FR 44552 (July 18, 2000) (SR-Amex-2000-19).

Back to Citation

12.  Securities Exchange Act Release No. 43279 (September 11, 2000), 65 FR 56606 (September 19, 2000) (SR-Amex-2000-44).

Back to Citation

13.  Securities Exchange Act Release No. 45725 (April 10, 2002) (SR-Amex-2002-8).

Back to Citation

16.  15 U.S.C. 78s(b)(3)(A)(ii).

Back to Citation

18.  See note 4 supra.

Back to Citation

[FR Doc. 02-9883 Filed 4-22-02; 8:45 am]

BILLING CODE 8010-01-P