You are on page 1of 3

55858 Federal Register / Vol. 69, No.

179 / Thursday, September 16, 2004 / Notices

2. Statutory Basis Electronic Comments SECURITIES AND EXCHANGE


The Exchange believes that the COMMISSION
• Use the Commission’s Internet
proposed rule change is consistent with comment form (http://www.sec.gov/ [Release No. 34–50332; File No. SR–Phlx–
Section 6(b) of the Act 6 in general, and rules/sro.shtml); or 2004–49]
furthers the objectives of Section 6(b)(5)
of the Act7 in particular, because it is • Send an e-mail to rule-
Self-Regulatory Organizations; Notice
designed to prevent fraudulent and comments@sec.gov. Please include File of Filing and Immediate Effectiveness
manipulative acts and practices, to Number SR–PCX–2004–84 on the of a Proposed Rule Change and
promote just and equitable principles of subject line. Amendment No. 1 Thereto by the
trade,8 to foster cooperation and Paper Comments Philadelphia Stock Exchange, Inc.
coordination with persons engaged in Relating to Fees Applicable to the
facilitating transactions in securities, • Send paper comments in triplicate Exchange’s Electronic Trading
and to remove impediments to and to Jonathan G. Katz, Secretary, Platform, Phlx XL
perfect the mechanism of a free and Securities and Exchange Commission,
open market and a national market September 9, 2004.
450 Fifth Street, NW., Washington, DC
system. 20549–0609. All submissions should Pursuant to Section 19(b)(1) of the
refer to File Number SR–PCX–2004–84. Securities Exchange Act of 1934
B. Self-Regulatory Organization’s (‘‘Act’’),1 and Rule 19b–4 2 thereunder,
Statement on Burden on Competition This file number should be included on
notice is hereby given that on July 29,
the subject line if e-mail is used. To help
The Exchange does not believe that 2004, the Philadelphia Stock Exchange,
the proposed rule change will impose the Commission process and review Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with
any burden on competition that is not your comments more efficiently, please the Securities and Exchange
necessary or appropriate in furtherance use only one method. The Commission Commission (‘‘Commission’’) the
of the purposes of the Act. will post all comments on the proposed rule change as described in
Commission’s Internet Web site (http:// Items I, II, and III, below, which Items
C. Self-Regulatory Organization’s www.sec.gov/rules/sro.shtml). Copies of have been prepared by the Phlx. On
Statement on Comments on the the submission, all subsequent August 13, 2004, Phlx submitted an
Proposed Rule amendments, all written statements amendment to the proposed rule
Change Received From Members, with respect to the proposed rule change.3 The proposed rule change has
Participants, or Others change that are filed with the been filed by the Phlx as establishing or
Written comments on the proposed Commission, and all written changing a due, fee, or other change,
rule change were neither solicited nor communications relating to the pursuant to Section 19(b)(3)(A)(ii) of the
received. proposed rule change between the Act,4 and Rule 19b–4(f)(2) 5 thereunder,
Commission and any person, other than which renders the proposal effective
III. Date of Effectiveness of the those that may be withheld from the upon filing with the Commission. The
Proposed Rule Change and Timing for public in accordance with the Commission is publishing this notice to
Commission Action provisions of 5 U.S.C. 552, will be solicit comments on the proposed rule
Within 35 days of the date of available for inspection and copying in change from interested persons.
publication of this notice in the Federal the Commission’s Public Reference I. Self-Regulatory Organization’s
Register or within such longer period (i) Section, 450 Fifth Street, NW., Statement of the Terms of Substance of
as the Commission may designate up to Washington, DC 20549. Copies of such the Proposed Rule Change
90 days of such date if it finds such filing also will be available for
longer period to be appropriate and The Phlx proposes to amend its fee
inspection and copying at the principal
publishes its reasons for so finding, or schedule in anticipation of the
office of the Exchange. All comments deployment of its electronic trading
(ii) as to which the PCX consents, the received will be posted without change;
Commission will: platform for options, Phlx XL.6
the Commission does not edit personal Specifically, the Exchange proposes: (1)
(A) By order approve such proposed identifying information from
rule change; or To establish charges applicable to
submissions. You should submit only Exchange Registered Options Traders
(B) institute proceedings to determine
information that you wish to make (‘‘ROTs’’) that submit proprietary
whether the proposed rule change
available publicly. All submissions electronic quotations (‘‘streaming
should be disapproved.
should refer to File Number SR–PCX–
IV. Solicitation of Comments 2004–84 and should be submitted on or 1 15 U.S.C. 78s(b)(1).
Interested persons are invited to before October 7, 2004. 2 17 CFR 240.19b–4.
3 See letter from Richard S. Rudolph, Director and
submit written data, views, and For the Commission, by the Division of Counsel, Phlx, to Deborah Lassman Flynn, Assistant
arguments concerning the foregoing, Market Regulation, pursuant to delegated Director, Division of Market Regulation,
including whether the proposed rule authority.9 Commission, dated August 12, 2004 (‘‘Amendment
change is consistent with the Act. Jill M. Peterson, No. 1’’). In Amendment No. 1, the Phlx added a
Comments may be submitted by any of footnote to the text of its proposed fee schedule
Assistant Secretary. indicating that the 50% pass-through charge
the following methods: applicable to those Streaming Quote Traders to
[FR Doc. E4–2224 Filed 9–15–04; 8:45 am]
whom the Exchange supplies Hyperfeed data is
6 15 U.S.C. 78f(b). BILLING CODE 8010–01–P subject to a pilot scheduled to expire on January 28,
7 15 U.S.C. 78f(b)(5). 2005. The Phlx also made technical, non-
8 At the request of the Exchange, Commission substantive changes to the proposed rule text.
4 15 U.S.C. 78s(b)(3)(A)(ii).
staff made a technical correction to this section of
5 17 CFR 240.19b–4(f)(2).
the filing. Telephone conversation between Steven
B. Matlin, Senior Counsel, Regulatory Policy, PCX 6 See Securities Exchange Act Release No. 50100

and Tim Fox, Attorney, Division of Market (July 27, 2004), 69 FR 46612 (August 3, 2004) (SR–
Regulation, Commission, on September 10, 2004. 9 17 CFR 200.30–3(a)(12). Phlx–2003–59).

VerDate jul<14>2003 17:52 Sep 15, 2004 Jkt 203001 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 E:\FR\FM\16SEN1.SGM 16SEN1
Federal Register / Vol. 69, No. 179 / Thursday, September 16, 2004 / Notices 55859

quotes’’),7 and (2) to no longer charge specialist that has elected the Specialist incentive for specialists to promote the
the option specialist for listed options Fixed Fee and lists an option that was options they have been allocated.
currently subject to the Exchange’s subject to the shortfall fee (which was
2. Statutory Basis
Specialist Deficit (Shortfall) fee used in calculating the Specialist Fixed
(‘‘shortfall fee’’),8 when that option is Fee), the Specialist’s Fixed Fee will be The Phlx believes that its proposal to
offered on Phlx XL. reduced by the amount of the shortfall amend its schedule of dues, fees, and
fee. The Specialist Fixed Fee calculation charges is consistent with Section 6(b)
SQT Fees of the Act 14 in general, and furthers the
and the shortfall fee will be pro-rated in
The Phlx has determined to assess the month in which the option is objectives of Section 6(b)(4) of the Act 15
SQTs a 50% pass-through charge deployed on Phlx XL.13 in particular, in that it is an equitable
relating to costs borne by the Phlx for The text of the proposed rule change allocation of reasonable dues, fees, and
data it will provide to SQTs who desire is available at the Phlx, at the other charges among Exchange members
to obtain from the Exchange real-time Commission, and on the Commission’s who become SQTs.
underlying data to enable them to price Web site, http://www.sec.gov/rules/sro/ B. Self-Regulatory Organization’s
the overlying options (‘‘Hyperfeed’’ phlx.shtml. Statement on Burden on Competition
costs) 9 in addition to any other
applicable fees.10 The 50% pass-through II. Self-Regulatory Organization’s The Exchange does not believe that
charge will be implemented beginning Statement of the Purpose of, and the proposed rule change, as amended,
on the first day of deployment of the Statutory Basis for, the Proposed Rule will impose any inappropriate burden
first option to trade on Phlx XL, and Change on competition.
will apply on a pilot basis to those SQTs In its filing with the Commission, the C. Self-Regulatory Organization’s
that the Exchange supplies Hyperfeed Phlx included statements concerning Statement on Comments on the
data for the first 180 days of deployment the purpose of and basis for the Proposed Rule Change Received From
of Phlx XL.11 proposed rule change and discussed any Members, Participants, or Others
Shortfall Fee comments it received on the proposed
No written comments were either
rule change. The text of these statements
The shortfall fee is a component of the solicited or received.
may be examined at the places specified
Exchange’s Specialist Fixed Fee in Item IV below. The Phlx has prepared III. Date of Effectiveness of the
calculation.12 Therefore, for any options summaries, set forth in Sections A, B, Proposed Rule Change and Timing for
7 Such ROTs are known as Streaming Quote
and C below, of the most significant Commission Action
Traders (‘‘SQTs’’). See Phlx Rule 1014(b).
aspects of such statements. The foregoing proposed rule change,
8 See Securities Exchange Act Release Nos. 48206
A. Self-Regulatory Organization’s as amended, has become effective
(July 22, 2003), 68 FR 44555 (July 29, 2004) (SR– pursuant to Section 19(b)(3)(A)(ii) of the
Phlx–2003–45); and 48207 (July 22, 2003), 68 FR
Statement of the Purpose of, and
44558 (July 29, 2003) (SR–Phlx–2003–47). The Statutory Basis for, the Proposed Rule Act,16 and Rule 19b–4(f)(2)17
Exchange charges a fee of $0.35 per contract for Change thereunder, because it establishes or
specialists trading any Top 120 Option if 12% of changes a due, fee, or other charge. At
the total national monthly contract volume for such 1. Purpose any time within 60 days of the filing of
Top 120 Option is not effected on the Exchange.
The fee is limited to $10,000 per month per option The purpose of the proposed rule the proposed rule change, as amended,
provided that the total monthly market share change, as amended, is to adopt fees the Commission may summarily
effected on the Phlx in the Top 120 Option is equal relating to Phlx XL. With respect to the abrogate such rule change if it appears
to or greater than 50% of the volume threshold in to the Commission that such action is
effect.
Hyperfeed fee, the purpose is to recoup
9 SQTs trading options on Phlx XL will use part of the costs borne by the Exchange necessary or appropriate in the public
handheld devices for the purpose of streaming for data supplied by the Exchange to interest, for the protection of investors,
quotations in options in which they are assigned. SQTs in connection with the anticipated or otherwise in furtherance of the
The Exchange will not supply the handheld deployment of Phlx XL. The Exchange purposes of the Act.18
devices; SQTs will obtain the handheld devices
from one of several Exchange-approved vendors. believes that the 50% pass-through cost IV. Solicitation of Comments
Some vendors provide underlying data to the SQT should enable ROTs that wish to
who uses their handheld as a service to enable such become SQTs to make the transition on Interested persons are invited to
SQT to price overlying options, while other vendors
a cost-effective basis, with the Exchange submit written data, views, and
do not. The Exchange will provide such underlying arguments concerning the foregoing,
data, obtained from a third-party service provider, effectively absorbing 50% of the
Hyperfeed costs during the 180 day including whether the proposed rule
to those SQTs whose vendors do not provide such
data as part of the service they provide to the SQT. deployment of Phlx XL. With respect to change, as amended, is consistent with
The Hyperfeed fee represents a pass-through of 50%
the shortfall fee, the purpose of the the Act. Comments may be submitted by
of the costs borne by the Exchange in obtaining and
proposed rule change, as amended, is to any of the following methods:
providing such data to such SQTs.
10 Members who stream proprietary quotations in address the effect of the shortfall fee Electronic Comments
‘‘Streaming Quote Options’’ traded on Phlx XL will calculation as it relates to options traded • Use the Commission’s Internet
also pay any Exchange transaction-related fees as on Phlx XL. The Exchange believes that
well as non transactional-related fees and comment form (http://www.sec.gov/
membership-related fees in effect during this time it would be unreasonable to impose a rules/sro.shtml); or
period, when applicable, such as trading post/ shortfall fee on specialists (once there • Send E-mail to rule-
booth, floor facility, shelf space and permit fees. are streaming quotes) when SQTs will comments@sec.gov. Please include File
11 The Commission notes that any changes or
be competing for market share on a
pilot extensions of the Hyperfeed data pass-through
charge would require the Phlx to file a proposed
relatively equal basis, as the shortfall fee 14 15 U.S.C. 78f(b).
rule change pursuant to Section 19(b) of the Act. was designed, in part, to create an 15 15 U.S.C. 78f(b)(4).
12 See Securities Exchange Act Release Nos. 16 15 U.S.C. 78s(b)(3)(A)(ii).
17 17 CFR 240.19b–4(f)(2).
48459 (September 8, 2003), 68 FR 54034 (September 13 The Exchange intends to roll out equity options

15, 2003) (SR–Phlx–2003–61); 49467 (March 24, on the Phlx XL in stages. Unlike the Hyperfeed fee, 18 For purposes of calculating the 60-day

2004), 69 FR 17017 (March 31, 2004) (SR–Phlx– the shortfall fee calculation will not be limited to abrogation period, the Commission considers the
2004–17); and 49770 (May 25, 2004), 69 FR 31150 the first 180 calendar days of deployment of Phlx period to commence on August 13, 2004, the date
(June 2, 2004) (SR–Phlx–2004–31). XL. Phlx filed Amendment No. 1.

VerDate jul<14>2003 17:52 Sep 15, 2004 Jkt 203001 PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 E:\FR\FM\16SEN1.SGM 16SEN1
55860 Federal Register / Vol. 69, No. 179 / Thursday, September 16, 2004 / Notices

Number SR–Phlx–2004–49 on the SECURITIES AND EXCHANGE person or any entity from the use of the
subject line. COMMISSION SIG Investment Managers IndexTM, [or]
the SIG Cable, Media & Entertainment
Paper Comments [Release No. 34–50333; File No. SR–Phlx–
IndexTM, the SIG Casino Gaming
2004–48]
• Send paper comments in triplicate IndexTM, the SIG Semiconductor
to Jonathan G. Katz, Secretary, Self-Regulatory Organizations; Equipment IndexTM, and the SIG
Philadelphia Stock Exchange, Inc.; Semiconductor Device IndexTM, or any
Securities and Exchange Commission,
Notice of Filing and Immediate data included therein in connection
450 Fifth Street, NW., Washington, DC
Effectiveness of a Proposed Rule with the trading of option contracts
20549–0609. thereon, or for any other use.
Change and Amendment No. 1 Thereto
All submissions should refer to File Relating to SIG Indices, LLLP [Susquehanna] SIG Indices, LLLP makes
Number SR–Phlx–2004–49. This file Disclaimer no express or implied warranties of
number should be included on the merchantability or fitness for a
subject line if e-mail is used. To help the September 9, 2004. particular purpose for use with respect
Commission process and review your Pursuant to section 19(b)(1) of the to the SIG Investment Managers
comments more efficiently, please use Securities Exchange Act of 1934 IndexTM, [or] the SIG Cable, Media &
only one method. The Commission will (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Entertainment IndexTM, the SIG Casino
post all comments on the Commission’s notice is hereby given that on July 28, Gaming IndexTM, the SIG
Internet Web site (http://www.sec.gov/ 2004, the Philadelphia Stock Exchange, Semiconductor Equipment IndexTM,
rules/sro.shtml). Copies of the Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with and the SIG Semiconductor Device
the Securities and Exchange Index TM, or any data included therein.
submission, all subsequent
Commission (‘‘SEC’’ or ‘‘Commission’’) * * * * *
amendments, all written statements
the proposed rule change as described
with respect to the proposed rule II. Self-Regulatory Organization’s
in items I and II below, which Items
change that are filed with the have been prepared by the Phlx. The Statement of the Purpose of, and
Commission, and all written Exchange has filed the proposal as a Statutory Basis for, the Proposed Rule
communications relating to the ‘‘non-controversial’’ rule change Change
proposed rule change between the pursuant to section 19(b)(3)(A) of the In its filing with the Commission, the
Commission and any person, other than Act,3 and Rule 19b–4(f)(6) thereunder,4 Exchange included statements
those that may be withheld from the which renders the proposal effective concerning the purpose of, and basis for,
public in accordance with the upon filing with the Commission. On the proposed rule change and discussed
provisions of 5 U.S.C. 552, will be August 19, 2004, the Exchange filed any comments it received on the
available for inspection and copying in Amendment No. 1 to the proposed rule proposed rule change. The text of these
the Commission’s Public Reference change.5 The Commission is publishing statements may be examined at the
Section, 450 Fifth Street, NW., this notice to solicit comments on the places specified in item IV below. The
Washington, DC 20549. Copies of such proposed rule change from interested Exchange has prepared summaries, set
filing also will be available for persons. forth in sections A, B, and C below, of
inspection and copying at the principal I. Self-Regulatory Organization’s the most significant aspects of such
office of the Phlx. All comments Statement of the Terms of Substance of statements.
received will be posted without change; the Proposed Rule Change A. Self-Regulatory Organization’s
the Commission does not edit personal Statement of the Purpose of, and
The Phlx proposed to amend Rule
identifying information from Statutory Basis for, the Proposed Rule
1104A, Susquehanna Indices, LLP
submissions. You should submit only Change
Indexes, to provide the name change
information that you wish to make
and expand the coverage of the rule. 1. Purpose 7
available publicly. All submissions Below is the proposed rule change.
should refer to File Number SR–Phlx– Proposed new language is italicized. The purpose of the proposed rule
2004–49 and should be submitted on or Proposed deletions are in [brackets].6 change is to amend Phlx Rule 1104A
before October 7, 2004. which applies to indexes maintained by
* * * * * SIG Indices, LLLP (formerly known as
For the Commission, by the Division of
Market Regulation, pursuant to delegated Rule 1104A. [Susquehanna] SIG Indices, ‘‘Susquehanna Indices, LLLP’’).8 The
authority.19 LLLP Indexes
7 The Phlx requested that the staff of the Division
Margaret H. McFarland, [Susquehanna] SIG Indices, LLLP make minor non-substantive modifications to
Deputy Secretary.
makes no warranty, express or implied, language in the purpose section. Telephone
as to results to be obtained by any discussion between Carla Behnfeldt, Director, Phlx
[FR Doc. E4–2200 Filed 9–15–04; 8:45 am] and Mia Zur, Attorney, Division, Commission
BILLING CODE 8010–01–P 1 15 (August 25, 2004).
U.S.C. 78s(b)(1). 8 The Exchange currently lists options on the SIG
2 17
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
Investment Managers IndexTM and the SIG Cable,
Media & Entertainment IndexTM pursuant to a
4 17 CFR 240.19b–4(f)(6).
license agreement with SIG Indices, LLLP and
5 See Letter from Carla Behnfeldt, Director, Phlx
Exchange Rule 1009A(b). The Exchange recently
to Mia Zur, Attorney, Division of Market Regulation amended Exchange Rule 1104A to cover the SIG
(‘‘Division’’), Commission, dated August 18, 2004 Cable, Media & Entertainment IndexTM pursuant to
(‘‘Amendment No. 1’’). In Amendment No. 1, the a requirement in the license agreement. See
Phlx replace the original proposed rule change in Securities Exchange Act Release No. 49605 (April
its entirety. 22, 2004), 69 FR 24209 (May 3, 2004). The
6 The Exchange requested that the staff of the Exchange is filing the current proposed rule change
Division correct a minor error in the proposed rule pursuant to a requirement in the license agreement.
text. Telephone discussion between Carla SIG Investment Managers IndexTM, SIG Cable,
Behnfeldt, Director, Phlx and Mia Zur, Attorney, Media & Entertainment IndexTM, SIG Casino
19 17 CFR 200.30–3(a)(12). Division, Commission (August 25, 2004). Gaming IndexTM, SIG Semiconductor Equipment

VerDate jul<14>2003 18:51 Sep 15, 2004 Jkt 203001 PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 E:\FR\FM\16SEN1.SGM 16SEN1