regulatory organizations; proposed rule changes: Pacific Exchange, Inc.,

[Federal Register: December 22, 1998 (Volume 63, Number 245)]

[Notices]

[Page 70821-70822]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr22de98-113]

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40792; File No. SR-PCX-98-61]

Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. Relating to Cordless Telephone Fees

December 15, 1998.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4(e)(2) thereunder,\2\ notice is hereby given that on December 4, 1998, the Pacific Exchange, Inc. (``PCX'' or ``Exchange'') filedwith the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the PCX. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

\1\ 15 U.S.C. 78s(b)(1).

\2\ 17 CFR 240.19b-4(e)(2).

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

   The Exchange is proposing to change its Schedule of Fees and Charges for Exchange Services by reducing cordless telephone charges. The text of the proposed rule change is available at the Office of the Secretary, the PCX and at the Commission.

2. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

   In its filing with the Commission, the PCX 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 PCX has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.

   1. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

      1. Purpose

      The Exchange originally imposed a fee of $50 per month per cordless telephone on Options Floor members to reflect the costs of upgrading the Erickson cordless telephone system.\3\ It was determined at the time of the upgrade that a fee of $50 per month per cordless telephone would be required to cover the costs of the system over the useful life of the system.

      \3\ See Securities Exchange Act Release No. 40293 (July 31, 1998), 63 FR 42896 (August 11, 1998).

      The Exchange proposes to reduce the fees associated with cordless telephone use on the Options Floor from $50 per month per cordless telephone to $40 per month per cordless telephone. An analysis of the cordless telephone fees based on actual costs incurred indicates that a fee of $40 per month per cordless telephone is sufficient to cover the costs incurred by the upgrading of the Erickson cordless telephone system over the anticipated useful life of the system. The Exchange estimates that the useful life of the system is approximately four years. At $40 per month per cordless telephone, the PCX can recover expenses incurred for the Erickson telephone system over a 4-year period. 2. Statutory Basis

      The Exchange believes the proposed rule change is consistent with Section 6(b) \4\ of the Act, in general, and furthers the objectives of Section 6(b)(4),\5\ in particular, because it provides for the equitable allocation of reasonable dues, fees and other charges among its members and issuers and other persons using its facilities.

      \4\ 15 U.S.C. 78f(b).

      \5\ 15 U.S.C. 78f(b)(4).

   2. Self-Regulatory Organization's Statement on Burden on Competition

      The PCX does not believe that the proposed rule change would impose any inappropriate burden on competition.

      [[Page 70822]]

   3. 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.

3. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

   The foregoing rule change establishes or changes a due, fee, or other charge and, therefore, has become effective pursuant to Section 19(b)(3)(A) of the Act \6\ and subparagraph (e)(2) of Rule 19b-4 thereunder.\7\

   \6\ 15 U.S.C. 78s(b)(3)(A).

   \7\ 17 CFR 240.19b-4(e)(2).

   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.

4. 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, N.W., Washington, D.C. 20549. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filedwith 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 PCX. All submissions should refer to File No. SR-PCX-98-61 and should be submitted by January 12, 1999.

   For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\8\

   \8\ 17 CFR 200.30-3(a)(12).

   Margaret H. McFarland, Deputy Secretary.

   [FR Doc. 98-33817Filed12-21-98; 8:45 am]

   BILLING CODE 8010-01-M