Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Pacific Stock Exchange, Inc. Relating to the Establishment of a $50 Fee for One-Day Transfers of Membership

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-37373; File No. SR-PSE-96-22]

Self-Regulatory Organizations; Notice of Filing and Immediate

Effectiveness of Proposed Rule Change by the Pacific Stock Exchange,

Inc. Relating to the Establishment of a $50 Fee for One-Day Transfers

of Membership

June 26, 1996.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on June 21,

1996, the Pacific Stock Exchange, Inc. (``PSE'' or ``Exchange'') filed

with 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 PSE. The Commission is publishing this

notice to solicit comments on the proposed rule change from interested

persons.

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

of the Proposed Rule Change

Currently, the PSE's Schedule of Rates for Exchange Services

(``Schedule of Rates'') provides a fee of $100 for temporary intrafirm

or interfirm transfers of membership.\1\ The PSE proposes to amend the

Schedule of Rates to: (1) establish a fee of $50 for one-day intrafirm

transfers of membership; (2) specify that a ``temporary'' transfer of

membership is for a period of less than 30 days; \2\ and (3) eliminate

a reference to ``interfirm'' temporary transfers of membership, so that

the $100 fee for temporary membership transfers will apply solely to

temporary intrafirm transfers of membership.\3\

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\1\ Currently, PSE Rule 1.10(a), ``Initial, Transfer and

Processing Fees,'' also provides for interfirm and intrafirm

transfer fees. In a separate rule filing, the PSE has proposed to

delete the transfer fees from PSE Rule 1.10(a). Under that proposal,

PSE Rule 1.23, ``Transfer of Membership,'' will govern membership

transfers but will not contain a fee schedule. See Securities

Exchange Act Release No. 37076 (April 5, 1996), 61 FR 16152 (April

11, 1996) (notice of filing of proposed rule change for File No. SR-

PSE-96-07).

\2\ The $100 fee for temporary membership transfers applies to

transfers lasting for a consecutive period lasting from two days to

less than 30 days.

\3\ According to the PSE, temporary transfers of membership

occur only between members of the same firm, not between firms.

Thus, the proposal eliminates an inaccurate reference to temporary

``interfirm'' transfers of membership. Telephone conversation

between Michael Pierson, Senior Attorney, Market Regulation, PSE,

and Yvonne Fraticelli, Attorney, Office of Market Supervision,

Division of Market Regulation, Commission, on June 24, 1996.

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The text of the proposed rule change is available at the Office of

the Secretary, PSE, 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 prices 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 the

Statutory Basis for, the Proposed Rule Change

Purpose

The PSE proposes to adopt a $50 fee for members who transfer their

membership rights, on a one-day basis, to other members of the same

firm. This change is intended to address situations where floor members

are unable to be present on the trading floor for one day and need to

have substitute coverage on the floor for that day. Under the proposal,

members who expect to be away from the floor for one day will notify

the Exchange of the proposed transfer and the Exchange will bill them

$50.

The Schedule of Rates currently provides for a fee of $100 for

``temporary'' transfers of membership.\4\ That fee is intended to cover

transfers of membership that last longer than one day (but less than 30

days), such as when a floor member takes a vacation. The Exchange

believes that the proposed one-day intrafirm transfer fee will provide

an equitable alternative to the $100 temporay transfer fee for members

who are away from the floor for just one day. In addition, the PSE

notes that the proposal will address more directly situations in which

a member transfers his or her membership to another person, one a one-

day basis, on more than two separate occasions during a 30-day period.

In such situations, the member would be charged $50 for each one-day

transfer of membership. In addition, if a member notifies the PSE of a

one-day transfer, and that member is later unable to return to the

floor for a consecutive period of from two to 30 days, that member

would be charged a maximum fee of $100.

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\4\ In addition, the Schedule of Rates provides a $250 fee for

permanent intrafirm or interfirm transfers of membership.

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The Exchange also proposes to amend its Schedule of Rates with

regard to ``temporary'' transfers of membership by specifying that such

transfers are for a period of less than 30 days.\5\ In addition, the

PSE proposes to eliminate a reference in the provision governing

temporary transfers to ``interfirm'' transfers of membership, so that

the $100 fee will apply solely to temporary ``intrafirm'' transfers of

membership.\6\

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\5\ The $100 fee for a temporary transfer of membership was

implemented in 1995. See Securities Exchange Act Release No. 35817

(September 5, 1995), 60 FR 47417 (September 12, 1995) (Notice of

filing and immediate effectiveness for File No. SR-PSE-95-19).

\6\ See note 3, supra.

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Statutory Basis

The PSE believes that the proposal is consistent with Section 6(b)

of the Act, in general, and with Section 6(b)(4), in particular, in

that it provides for the equitable allocation of reasonable charges

among its members.

(B) Self-Regulatory Organization's Statement on Burden on Competition

The PSE does not believe that the proposed rule change will impose

any burden on competition that is not necessary or appropriate in

furtherance of the purposes of the Act.

(C) 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

or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for

Commission Action

Because the foregoing rule change establishes or changes a due, fee

or other charge imposed by the Exchange, it has become effective

pursuant to Section 19(b)(3)(A) of the Act and subparagraph (e) of Rule

19b-4 thereunder. 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

[[Page 34919]]

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. Persons making written submissions

should file six copies thereof with the Secretary, Securities and

Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.

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 Section, 450 Fifth Street, NW.,

Washington, DC 20549. Copies of such filing will also be available for

inspection and copying at the principal office of the Exchange. All

submissions should refer to the file number in the caption above and

should be submitted by July 24, 1996.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.\7\

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\7\ 17 CFR 200.30-3(a)(12) (1995).

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Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96-16925 Filed 7-2-96; 8:45 am]

BILLING CODE 8010-01-M