Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Philadelphia Stock Exchange, Inc. Relating to Exchange Fees for Trading Floor Members Participating in the Wireless Telephone System

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41449; File No. SR-PHLX-99-10]

Self-Regulatory Organizations; Notice of Filing and Immediate

Effectiveness of Proposed Rule Change by the Philadelphia Stock

Exchange, Inc. Relating to Exchange Fees for Trading Floor Members

Participating in the Wireless Telephone System

May 25, 1999.

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

(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is thereby given

that on April 19, 1999, the Philadelphia Stock Exchange, Inc. (``Phlx''

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.\3\ The Commission is publishing this notice to solicit

comments on the proposed rule change from interest persons.

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

\2\ 17 CFR 240.19b-4.

\3\ Amendment No. 1, which proposed a Wireless Telephone System

policy, was submitted on April 19, 1999. The Amendment was replaced

by SR-PHLX-99-14 and subsequently withdrawn on May 18, 1999. See

Letter to Michael Walinskas, Associate Director, Division of Market

Regulation SEC from John Dayton Counsel Phlx, dated May 18, 1999.

See also SR-PHLX-99-14 and SR-PHLX-99-15 relating to the use of

wireless telephones. Securities Exchange Act Release Nos. 41450 (May

25, 1999) and 41451 (May 25, 1999).

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

Substance of the Proposed Rule Change

Phlx proposes to amend its schedule of dues, fees and charges to

adopt user fees for all option floor members participating in Phlx's

new wireless telephone system.\4\

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\4\ Phlx currently intends to make this telephone system

available to the equity and index options floor, not the foreign

currency options floor.

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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, Phlx 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. Phlx 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 purpose of this proposed rule change is to amend Phlx's fee

schedule to adopt a wireless telephone system fee applicable to all

option floor members participating in the Ericsson wireless telephone

system offered by Phlx. All options floor members participating in the

wireless telephone system would be assessed a one-time fee of $1,000 to

purchase a handset, headset, battery, charger and clip. In addition,

for each handset purchased, each participant must agree to pay a

monthly charge of $200 for a period of twelve months. The twelve-month

period will commence on the date of the agreement signed by the

participant. At the end of the twelve-month period, a new agreement

will be presented to the participant. Payment of the monthly fees will

be governed by Phlx Rule 50.

Furthermore, a fee for a lost, stolen or damaged headset, handset,

battery charger or clip will be assessed at the current replacement or

repair cost.\5\

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\5\ Each Participant will be required to sign an agreement that

states that a one-year warranty period does not apply (i) to damage

caused by a subscriber, third parties or force of nature, and (ii)

to any system repaired or altered, except by Ericsson, or subjected

to misuse, negligence or accident. Batteries and accessories are not

covered under the warranty.

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2. Statutory Basis

Phix believes that the proposed rule change is consistent with

Section 6(b) \6\ of the Act in general and furthers the objectives of

Section 6(b)(4) \7\ in particular, because it provides for the

equitable allocation of reasonable dues, fees, and other charges among

Phlx members using its facilities.\8\

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\6\ 15 U.S.C. 78f(b).

\7\ 15 U.S.C. 78f(b)(4).

\8\ In reviewing the proposed rule change, the Commission

considered its impact on efficiency, competition, and capital

formation. 15 U.S.C. 78c(f).

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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 written comments on

the proposed rule change.

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

for Commission Action

The foregoing rule change, which establishes or changes a due, fee,

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

to Section 19(b)(3)(A) of the Act \9\ and subparagraph (f)(2) or rule

19b-4 thereunder.\10\ 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.

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\9\ 15 U.S.C. 78s(b)(3)(A).

\10\ 17 CFR 240.19b-4(f)(2).

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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 also will be

available for inspection and copying at the principal office of the

Phlx. All submissions should refer to File No. SR-PHLX-99-10 and should

be submitted by June 23, 1999.

[[Page 29726]]

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.\11\

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\11\ 17 CFR 200.30-3(a)(12).

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Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 99-13866 Filed 6-1-99; 8:45 am]

BILLING CODE 8010-01-M