Self-Regulatory Organizations; the Pacific Exchange, Inc.; Order Approving Proposed Rule Change and Amendment No. 2 Thereto by the Pacific Exchange, Inc., Relating to the Exchange's Rules Under Its Minor Rule Plan and Recommended Fine Schedule, 4173-4174 [E5-325]
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Federal Register / Vol. 70, No. 18 / Friday, January 28, 2005 / Notices
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 Exchange consents,
the Commission will:
(A) By order approve such 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.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2004–70 on the
subject line.
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 NYSE. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–NYSE–2004–70 and should
be submitted on or before February 18,
2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.6
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–319 Filed 1–27–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51051; File No. SR–PCX–
2004–58]
Self-Regulatory Organizations; the
Pacific Exchange, Inc.; Order
Approving Proposed Rule Change and
Amendment No. 2 Thereto by the
Pacific Exchange, Inc., Relating to the
Exchange’s Rules Under Its Minor Rule
Plan and Recommended Fine Schedule
January 18, 2005.
On December 2, 2004, the Pacific
Exchange, Inc., (‘‘PCX’’ or ‘‘Exchange’’)
Paper Comments
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
• Send paper comments in triplicate
to section 19(b)(1) of the Securities
to Jonathan G. Katz, Secretary,
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
Securities and Exchange Commission,
19b–4 thereunder,2 a proposed rule
450 Fifth Street, NW., Washington, DC
change to amend PCX Rule 10.12 to add
20549–0609.
new provisions (h)(45) and (k)(i)45.
All submissions should refer to File
These provisions amend the PCX Minor
Number SR–NYSE–2004–70. This file
Rule Plan (‘‘MRP’’) and Recommended
number should be included on the
subject line if e-mail is used. To help the Fine Schedule (‘‘RFS’’) to add the
failure to maintain adequate procedures
Commission process and review your
and controls to monitor and supervise
comments more efficiently, please use
only one method. The Commission will the entry of electronic orders by Users 3
post all comments on the Commission’s to prevent the prohibited practices set
Internet Web site (https://www.sec.gov/
6 17 CFR 200.30–3(a)(12).
rules/sro/shtml). Copies of the
1 15 U.S.C. 78s(b)(1).
submission, all subsequent
2 17 CFR 240.19b–4.
amendments, all written statements
3 Pursuant to PCX Rule 6.87(a)(2), ‘‘User’’ means
with respect to the proposed rule
any person or firm that obtains electronic access to
change that are filed with the
Auto-Ex (defined in PCX Rule 6.87(a)(1)) through an
Order Entry Firm (defined in PCX Rule 6.87(a)(3)).
Commission, and all written
Pursuant to PCX Rule 6.90(c)(1), ‘‘User’’ means any
communications relating to the
person or broker-dealer that obtains electronic
proposed rule change between the
access to PCX Plus (defined in PCX Rule 6.90(a))
Commission and any person, other than through an Order Entry Firm (defined in PCX Rule
6.90(c)(2)).
those that may be withheld from the
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15:43 Jan 27, 2005
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Frm 00090
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4173
forth in PCX Rules 6.87(d) and 6.90(e).4
The proposed rule change was
published for comment in the Federal
Register on December 17, 2004.5 On
January 3, 2005, PCX filed Amendment
No. 1 to the proposal. On January 4,
2005, PCX withdrew Amendment No. 1
and filed Amendment No. 2 to the
proposal.6 The Commission received no
comments on the proposal. This order
approves the proposed rule change, as
amended.
The Commission finds that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to a national securities
exchange,7 and, in particular, the
requirements of section 6(b)(5) of the
Act,8 in that it is designed to promote
just and equitable principles of trade,
facilitate transactions in securities,
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. The Commission also
finds that the proposal is consistent
with section 6(b)(6) of the Act,9 which
requires that members and persons
associated with members be
appropriately disciplined for violations
of Exchange rules, and section 6(b)(7) of
the Act,10 which requires that members
and persons associated with members
are provided a fair procedures for
disciplinary procedure.
In approving this proposal, the
Commission in no way minimizes the
importance of compliance with these
rules, and all other rules subject to the
imposition of fines under the MRP. The
Commission believes that the violation
of any self-regulatory organization’s
rules, as well as Commission rules, is a
serious matter. However, in an effort to
provide the Exchange with greater
flexibility in addressing certain
violations, the MRP provides a
reasonable means to address rule
violations that do not rise to the level of
requiring formal disciplinary
4 PCX Rules 6.87(c)(4) and 6.90(d)(3) require
Order Entry Firms to maintain such controls and
procedures.
5 See Securities Exchange Act Release No. 50830
(December 9, 2004), 69 FR 75581 (December 17,
2004) (‘‘Notice’’).
6 In Amendment No. 2, PCX proposes to correct
a typographical error in the proposed rule text by
changing footnote 1 to tie to PCX Rule 10.12(k)(i)
instead of to PCX Rule 10.12(k). Amendment No.
2 is a technical amendment, and, therefore, not
subject to notice and comment.
7 In approving this proposed rule change, the
Commission notes that it has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
8 15 U.S.C. 78f(b)(5).
9 15 U.S.C. 78f(b)(6).
10 15 U.S.C. 78f(b)(7).
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4174
Federal Register / Vol. 70, No. 18 / Friday, January 28, 2005 / Notices
proceedings. The Commission notes,
however, that after the first failure by an
Order Entry Firm to maintain adequate
controls and procedures to monitor and
supervise the entry of electronic orders
pursuant to PCX Rules 6.87(c)(4) and
6.90(d)(3), the Exchange will treat
subsequent violations as a formal
disciplinary matter.11 The Commission
expects that the Exchange will continue
to conduct surveillance with due
diligence, and make a determination
based on its findings as to whether fines
of more or less than the recommended
amount are appropriate for violations of
rules under the MRP on a case-by-case
basis, or if a violation requires formal
disciplinary action.
It is therefore ordered, pursuant to
section 19(b)(2) of the Act12, that the
proposed rule change, including
Amendment No.2 thereto (File No. SR–
PCX–2004–58) be, and it hereby is,
approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–325 Filed 1–27–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51053; File No. SR–PCX–
2005–03]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by the
Pacific Exchange, Inc., Relating to
Exchange Fees and Charges
January 18, 2005.
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 January
11, 2005, the Pacific Exchange, Inc.,
(‘‘PCX’’ 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 PCX. The PCX has designated
this proposal as one establishing or
changing a due, fee, or other charge
imposed by the PCX under section
19(b)(3)(A)(ii) of the Act,3 and Rule
11 See
proposed PCX Rule 10.12(k)(i)45. See also
Notice, supra note 5.
12 15 U.S.C. 78s(b)(2).
13 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
VerDate jul<14>2003
15:43 Jan 27, 2005
Jkt 205001
19b–4(f)(2) thereunder,4 which renders
the proposal effective upon filing with
the Commission. 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
The PCX is proposing to amend its
Schedule of Fees and Charges For
Exchange Services (‘‘Schedule’’) in
order to add provisions for the handling
of options on the Standard and Poor’s
Depositary Receipts (ticker symbol
‘‘SPY’’) under the Exchange’s marketing
fee program. The text of the proposed
rule change is available on the PCX’s
Web site (https://www.pacificex.com), at
the PCX’s Office of the Secretary, and at
the Commission’s Public Reference
Room.
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
PCX included statements concerning the
purpose of and basis for its proposal and
discussed any comments it had received
regarding the proposal. 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.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The PCX states that the purpose of the
proposed filing is to amend the
Schedule in order to add provisions for
the handling of SPY options under the
Exchange’s marketing fee program. The
Exchange proposes to collect a $1.00 per
contract marketing fee for SPY options
and assess this fee on all transactions
except for Market Maker to Market
Maker transactions. In addition, the
Exchange is proposing to exclude trades
of SPY options from the existing cap on
marketing fees. The PCX states that this
charge is necessary as a result of the
costs associated with trading SPY
options. The Exchange believes that
capping marketing fees at $200 per trade
would put it at a competitive
disadvantage to other exchanges that
trade SPY options.
The Exchange has also proposed to
revise the Schedule to show the change
PO 00000
4 17
CFR 240.19b–4(f)(2).
Frm 00091
Fmt 4703
Sfmt 4703
in the symbol of the Nasdaq-100
Tracking Stock Options from QQQ to
QQQQ.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
section 6(b) of the Act 5 in general, and
furthers the objectives of section 6(b)(4)
of the Act 6 in particular, in that it is
designed to provide for the equitable
allocation of reasonable dues, fees, and
other charges among its members and
other persons using its facilities for
trading option contracts.7
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 PCX neither solicited nor
received written comments with respect
to the proposed rule change.
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)(ii) of the Act 8 and
subparagraph (f)(2) of Rule 19b–4
thereunder.9 Accordingly, the proposal
will take effect upon filing with the
Commission. 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.
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.
Comments may be submitted by any of
the following methods:
5 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
7 Telephone conversation between Steven Matlin,
Senior Counsel, PCX, and Davis Liu, Attorney,
Division of Market Regulation, Commission, on
January 14, 2005.
8 15 U.S.C. 78s(b)(3)(A)(ii).
9 17 CFR 240.19b–4(f)(2).
6 15
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]]>Agencies
[Federal Register Volume 70, Number 18 (Friday, January 28, 2005)]
[Notices]
[Pages 4173-4174]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-325]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51051; File No. SR-PCX-2004-58]
Self-Regulatory Organizations; the Pacific Exchange, Inc.; Order
Approving Proposed Rule Change and Amendment No. 2 Thereto by the
Pacific Exchange, Inc., Relating to the Exchange's Rules Under Its
Minor Rule Plan and Recommended Fine Schedule
January 18, 2005.
On December 2, 2004, the Pacific Exchange, Inc., (``PCX'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend PCX Rule 10.12 to add new provisions
(h)(45) and (k)(i)45. These provisions amend the PCX Minor Rule Plan
(``MRP'') and Recommended Fine Schedule (``RFS'') to add the failure to
maintain adequate procedures and controls to monitor and supervise the
entry of electronic orders by Users \3\ to prevent the prohibited
practices set forth in PCX Rules 6.87(d) and 6.90(e).\4\ The proposed
rule change was published for comment in the Federal Register on
December 17, 2004.\5\ On January 3, 2005, PCX filed Amendment No. 1 to
the proposal. On January 4, 2005, PCX withdrew Amendment No. 1 and
filed Amendment No. 2 to the proposal.\6\ The Commission received no
comments on the proposal. This order approves the proposed rule change,
as amended.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Pursuant to PCX Rule 6.87(a)(2), ``User'' means any person
or firm that obtains electronic access to Auto-Ex (defined in PCX
Rule 6.87(a)(1)) through an Order Entry Firm (defined in PCX Rule
6.87(a)(3)). Pursuant to PCX Rule 6.90(c)(1), ``User'' means any
person or broker-dealer that obtains electronic access to PCX Plus
(defined in PCX Rule 6.90(a)) through an Order Entry Firm (defined
in PCX Rule 6.90(c)(2)).
\4\ PCX Rules 6.87(c)(4) and 6.90(d)(3) require Order Entry
Firms to maintain such controls and procedures.
\5\ See Securities Exchange Act Release No. 50830 (December 9,
2004), 69 FR 75581 (December 17, 2004) (``Notice'').
\6\ In Amendment No. 2, PCX proposes to correct a typographical
error in the proposed rule text by changing footnote 1 to tie to PCX
Rule 10.12(k)(i) instead of to PCX Rule 10.12(k). Amendment No. 2 is
a technical amendment, and, therefore, not subject to notice and
comment.
---------------------------------------------------------------------------
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange,\7\ and, in
particular, the requirements of section 6(b)(5) of the Act,\8\ in that
it is designed to promote just and equitable principles of trade,
facilitate transactions in securities, 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.
The Commission also finds that the proposal is consistent with section
6(b)(6) of the Act,\9\ which requires that members and persons
associated with members be appropriately disciplined for violations of
Exchange rules, and section 6(b)(7) of the Act,\10\ which requires that
members and persons associated with members are provided a fair
procedures for disciplinary procedure.
---------------------------------------------------------------------------
\7\ In approving this proposed rule change, the Commission notes
that it has considered the proposed rule's impact on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
\8\ 15 U.S.C. 78f(b)(5).
\9\ 15 U.S.C. 78f(b)(6).
\10\ 15 U.S.C. 78f(b)(7).
---------------------------------------------------------------------------
In approving this proposal, the Commission in no way minimizes the
importance of compliance with these rules, and all other rules subject
to the imposition of fines under the MRP. The Commission believes that
the violation of any self-regulatory organization's rules, as well as
Commission rules, is a serious matter. However, in an effort to provide
the Exchange with greater flexibility in addressing certain violations,
the MRP provides a reasonable means to address rule violations that do
not rise to the level of requiring formal disciplinary
[[Page 4174]]
proceedings. The Commission notes, however, that after the first
failure by an Order Entry Firm to maintain adequate controls and
procedures to monitor and supervise the entry of electronic orders
pursuant to PCX Rules 6.87(c)(4) and 6.90(d)(3), the Exchange will
treat subsequent violations as a formal disciplinary matter.\11\ The
Commission expects that the Exchange will continue to conduct
surveillance with due diligence, and make a determination based on its
findings as to whether fines of more or less than the recommended
amount are appropriate for violations of rules under the MRP on a case-
by-case basis, or if a violation requires formal disciplinary action.
---------------------------------------------------------------------------
\11\ See proposed PCX Rule 10.12(k)(i)45. See also Notice, supra
note 5.
---------------------------------------------------------------------------
It is therefore ordered, pursuant to section 19(b)(2) of the
Act\12\, that the proposed rule change, including Amendment No.2
thereto (File No. SR-PCX-2004-58) be, and it hereby is, approved.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-325 Filed 1-27-05; 8:45 am]
BILLING CODE 8010-01-P
