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Notice

Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the New York Stock Exchange, Inc. Relating to Transaction Fees for Certain Exchange Traded Funds

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Start Preamble January 29, 2003.

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 21, 2003, the New York Stock Exchange, Inc. (“NYSE”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in items I and II below, which items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change.

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

The Exchange proposes to charge transaction fees for shares of FrescoSM Dow Jones STOXX 50SM Fund and FrescoSM Dow Jones EURO STOXX 50SM Fund, that are listed and traded on the Exchange. The fees will be the same transaction fees charged for other exchange traded funds listed and traded on the Exchange. Proposed new language is italicized; proposed deletions are in [brackets].

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Transaction Fees

Exchange Traded FundsAmount
Exchange Traded Funds—Public Agency and Principal Transactions Broker/Dealer—price per round-lot$0.60
Maximum price per trade100
System Orders under 5,100 shares 1No Charge.
Specialists and other on-floor proprietary trading—price per round-lot0.63
Maximum price per trade300
Exchange Traded Funds admitted to dealings on an unlisted trading privileges (UTP) basisNo Charge. 2
[Specific NYSE Listed Exchange Traded Funds:
FrescoSM Dow Jones STOXX 50SMNo Charge. 2
FrescoSM Dow Jones EURO STOXX 50SMNo Charge. 2]
1 Not inclusive of orders of a member or member organization trading as an agent for the account of a non-member competing market maker. Start Printed Page 5325
Competing Market Maker: a specialist or market-maker registered as such on a registered stock exchange (other than the NYSE), or a market-maker bidding and offering over-the-counter, in a New York Stock Exchange-traded security.
2 This “fee holiday” is intended to be temporary. The Exchange expects to file a specific schedule of transaction charges at a future date.
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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 NYSE 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 FrescoSM Dow Jones STOXX 50SM Fund and FrescoSM Dow Jones EURO STOXX 50SM (“Fresco Funds”) were listed and commenced trading on the Exchange on October 21, 2002.[3] At the time of listing, the Exchange implemented a temporary “fee holiday,” constituting zero transaction charges, for Fresco Funds for trading them on the Exchange.[4] The Exchange now proposes that starting February 1, 2003, transaction fees will be charged for trading of Fresco Funds. The fees will be the same transaction fees charged for other exchange traded funds listed and traded on the Exchange.[5]

2. Statutory Basis

The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act [6] in general, and furthers the objectives of section 6(b)(4) [7] in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among its members and other persons using its 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

The Exchange has neither solicited nor received comments on 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) of the Act,[8] and rule 19b-4(f)(2) thereunder,[9] in that it establishes or changes a due, fee, or other charge imposed by the Exchange. 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 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 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 at 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 No. SR-NYSE-2003-03 and should be submitted by February 24, 2003.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[10]

Jill M. Peterson,

Assistant Secretary.

End Signature End Preamble

Footnotes

3.  Securities Exchange Act Release No. 46686 (October 18, 2002), 67 FR 65388 (October 24, 2002).

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4.  Securities Exchange Act Release No. 46786 (November 7, 2002), 67 FR 69280 (November 15, 2002).

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9.  17 CFT 240.19b-4(f)(2).

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[FR Doc. 03-2482 Filed 1-31-03; 8:45 am]

BILLING CODE 8010-01-P