Notices. SECURITIES AND EXCHANGE COMMISSION

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BILLING CODE 8010-01-M SECURITIES AND EXCHANGE COMMISSION [Release No. 34-44961; File No. SR-NYSE-2001-34] Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the New York Stock Exchange, Inc. Amending NYSE Rule 103A To Delete an Unused Measure of Specialist Performance October 19, 2001. 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 August 29, 2001, the New York Stock Exchange, Inc.

(“NYSE” 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 NYSE. 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. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The NYSE proposes to delete one of the performance measures for specialists under Exchange Rule 103A.

The test of the proposal is below. Deletions are in brackets. Specialist Stock Reallocation and Member Education and Performance Rule 103A(a)(1) In order to ensure that a high level of market quality and performance in Exchange listed securities is achieved and maintained, the Market Performance Committee, under the authority granted in its Charter, shall develop and administer systems and procedures, including the determination of specific kinds of data to be reviewed and the establishment of appropriate standards and measurements of performance, designed to measure specialist performance and market quality on a periodic basis to determine whether or not all or particular specialist units need to take actions to improve their performance.

Based on such determinations, the Market Performance Committee shall take steps as described in this rule, to encourage performance improvement and to improve or sustain market quality in appropriate cases. Supplementary Material .10 Performance Improvement Action Criteria.—The Market Performance Committee shall initiate a Performance Improvement Action as described in paragraph

(b)above whenever a specialist unit does not meet any standard of acceptable performance as specified below.

(A)No change.

(B)No change.

(C)No change.

(D)Market Share

(i)in any case where the Market Performance Committee finds that a specialist unit's overall percentage of the total share volume as reported on the Consolidated Transaction Reporting System in any of its registered securities has declined significantly within two consecutive quarters and further determines that the reason(s) for the decline can be attributed to factors within the control of the specialist unit.] 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 NYSE 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 Exchange proposes to amend NYSE Rule 103A to delete an unused measure of specialist performance. Currently, NYSE Rule 103A provides authority for the Market Performance Committee (“MPC”) to establish and administer measures of specialist performance, conduct performance improvement actions where a specialist unit does not meet the performance standards in the Rule, and reallocate stocks if a unit does not achieve its specified goals when subject to a performance improvement action. The performance standards in the Rule include the Specialist Performance Evaluation Questionnaire, timeliness of stock openings, SuperDot order turnaround, administrative message responses and market share. This latter provision refers to a significant decline in market share, as measured by share volume, in two consecutive quarters where the decline is determined to be attributable to factors within the control of the specialist unit. At the time the Exchange adopted the market share measure, it was intended that the Exchange would develop criteria as to what constitutes a “significant decline“ before the market share performance standard could be enforced. However, criteria were never developed, and the MPC has never used the market share standard as a performance measure. The Exchange, therefore, is proposing to eliminate the provision from NYSE Rule 103A. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act, 3 in general, and furthers the objectives of section 6(b)(5), 4 in particular, because it should promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. 3 15 U.S.C. 78f(b) 4 15 U.S.C. 78f(b)(5). 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 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 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 Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period

(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or

(ii)as to which the NYSE consents, the Commission will:

(A)By order approve the proposed rule change, or

(B)Institute proceedings to determine whether the proposed rule change should be disapproved. 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 the Commission's Pubic Reference Room Copies of such filing will also be available for inspection and copying at the principal office of the NYSE. All submissions should refer to File No. SR-NYSE-2001-34 and should be submitted by November 16, 2001. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 5 5 17 CFR 200.30-2(a)(12). Margaret H. McFarland, Deputy Secretary. FR Doc. 01-26958 Filed 10-25-01; 8:45 am] BILLING CODE 8010-01-M SECURITIES AND EXCHANGE COMMISSION [Release No. 34-44963; File No. SR-PHLX-2001-84] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Philadelphia Stock Exchange, Inc. Adopting a Fee for Installing and Maintaining Tethers on the Options Trading Floor October 19, 2001. 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 August 31, 2001, the Philadelphia Stock Exchange, Inc. (“Phlx” 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 Phlx. The Phlx amended the proposed rule change on October 15, 2001. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 The Phlx submitted a new Form 19b-4, which replaces and supersedes the original filing in its entirety (“Amendment No. 1”). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Phlx proposes to amend its schedule of dues, fees and charges to adopt a Tether 4 Initial Connectivity Fee of $1,100 and a Tether Monthly Service Fee of $150 for installing and thereafter maintaining tethers that allow a hardwire connection to an existing communication network (local area network) on the Exchange's options trading floor. 4 A tether is a hardwire connection to an existing Exchange communication network. It would augment the current wireless network on the options floor and allow users to connect their handheld devices to the existing Exchange communication network and thereby interface with member firm communication networks. 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 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. The 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 the proposed rule change is to amend the Exchange's schedule of dues, fees and charges to adopt a Tether Initial Connectivity Fee of $1,100 and a Tether Monthly Service Fee of $150 for installing and thereafter maintaining tethers that allow a hardwire connection to an existing communication network (local area network) on the Exchange's options trading floor. Each tethering device will incur one initial connectivity fee, and thereafter may be transferred to another user as well as to another location on the floor without incurring any additional connectivity fee. The connectivity and monthly fees will be imposed on the users of such tethers and communication network, namely registered options traders and floor brokers (but not specialists) on the options trading floor. The Exchange has had a wireless communication network on its options and other trading floors. Due to increases in bandwidth demands and the use of applications by traders, namely on the options floor, that are not designated to effectively operate on a shared wireless network, the Exchange has determined to augment its wireless network with hardwire access to an existing local area network that would allow users on the options trading floor to connect with communications networks of Exchange member firms. The Exchange is installing hardwire tethers at trading posts across the options trading floor and will maintain an existing communication network at considerable cost to the Exchange. 5 The Exchange believes that the proposed fees are equitable and reasonable in that they are based on actual and estimated expenses incurred in installing and maintaining the tethered connections. 6 5 The decision to install tethers and augment a network on a trading floor is solely within the Exchange's discretion. 6 The restrictions of Exchange Rule 606 and any other rules applicable to communications would apply to all communications via the tethers. The Exchange intends in the near future to propose amendments to Rule 606 and any other relevant rules to clarify their applicability to tethers. In the case of a newly installed tether, the initial connectivity fee commences upon installation and the monthly fee commences in the first full calendar month after installation is completed. 7 For instance, installation on September 1 would trigger a connectivity fee on September 1 and a monthly fee beginning October 1 (but not September 1). 7 This fee is eligible for the monthly credit of up to $1,000 to be applied against certain fees, dues and charges and other amounts owned to the Exchange by certain members. *See* Securities Exchange Act Release No. 44292 (May 11, 2001), 66 FR 27715 (May 18, 2001) (SR-Phlx-2001-49). 2. Statutory Basis The Exchange believes that is proposal to amend its schedule of dues, fees and charges is consistent with section 6(b) of the Act,\8\ in general, and furthers the objectives of section 6(b)(4), 9 in particular, in that it is an equitable allocation of reasonable fees among the Exchange's members because the members who pay the additional amount for the tethers incur the benefit of their use and access to a communication network. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change, as amended, will impose any inappropriate burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated the proposed rule change as a fee change pursuant to section 19(b)(3)(A)(ii) of the Act 10 and Rule 19b-4(f)(2) thereunder. 11 Accordingly, the proposal will take effect upon filing with the Commission. At any time within 60 days of the filing of Amendment No. 1 to 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. 10 15 U.S.C. 78s(b)(3)(A)(ii). 11 17 CFR 240.19b-4(f)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as amended, 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 in the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying it the principal office of the Phlx. All submissions should refer to the File No. SR-Phlx-2001-84 and should be submitted by November 16, 2001. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 12 12 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. 01-26959 Filed 10-25-01; 8:45 am]

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