Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Thereto Relating to a Revision and Extension of a Limitation on Trade Through Liability at the End of the Options Trading Day Pilot Program, 6487-6489 [E5-466]
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Federal Register / Vol. 70, No. 24 / Monday, February 7, 2005 / Notices
OCC’s systems would treat the
transaction as a failed CMTA and would
cause the transaction to be cleared in
the executing clearing member’s
designated or default account in
accordance with OCC Rule 403.
Under the terms of a model agreement
developed by the working group to
reflect the rights and obligations of the
carrying and executing clearing
members with respect to their customer
CMTA arrangement, the firms would
identify each CMTA covered customer.
Separately, the clearing members would
assign identifiers to their CMTA
customers and introducing brokers. One
clearing member then would register the
assigned identifiers with OCC. OCC’s
systems would require the other
clearing member to approve the
identifiers before they are submitted to
OCC for registration. Identifiers would
be effectively registered when they are
accepted by OCC’s systems, subject to
OCC’s right to reject an already
registered identifier.6 OCC would retain
the right to specify criteria applicable to
the characters used to form identifiers
for systemic reasons.
The prime broker clearing members
involved in developing these
requirements believe that including
identification information about the
CMTA customer and introducing broker
to a transaction would make CMTA
processing more transparent. Since
carrying clearing members do not have
the ability to approve or reject a
transaction before it is entered into the
exchanges’ systems for reporting to
OCC, they believe having OCC verify
customer and introducing broker
information will assist in limiting the
chances that a transaction erroneously
will be transferred into one of their
clearing accounts. They also believe
having such information available on
the trade record will improve the
effectiveness of their back office efforts
to confirm that transactions cleared in
their accounts conform to the
information supplied by their customer
or its introducing broker, and thereby,
will facilitate decision making on
whether the position resulting from the
transaction is eligible for return under
their CMTA agreement and Rule 403.
OCC believes that the proposed rule
change is consistent with Section 17A of
the Act 7 because it fosters the prompt
and accurate clearance and settlement of
securities transactions, the safeguarding
of funds and securities, and the
6 Carrying and executing clearing members would
be responsible to update their respective
registrations of CMTA Customer Identifiers and IB
Identifiers including registering any changes or
deletions with respect thereto.
7 15 U.S.C. 78q–1.
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21:04 Feb 04, 2005
Jkt 205001
protection of investors and the persons
facilitating transactions by and acting on
behalf of investors.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
OCC does not believe that the
proposed rule change would impose any
burden on competition.
C. Self-Regulatory Organization’s
Statement on Comments on
theProposed Rule Change Received from
Members, Participants or Others
OCC did not solicit or receive written
comments with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within thirty-five 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
ninety 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 self-regulatory
organization 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 an e-mail to rulecomments@sec.gov. Please include File
Number SR–OCC–2004–19 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
450 Fifth Street, NW., Washington, DC
20549–0609.
All submissions should refer to File
Number SR–OCC–2004–19. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
PO 00000
Frm 00081
Fmt 4703
Sfmt 4703
6487
Internet Web site https://www.sec.gov/
rules/sro.shtml. 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 also will be available for
inspection and copying at OCC’s
principal office and on OCC’s Web site
at https://www.optionsclearing. com/
publications/rules/proposed_changes/
proposed_changes.jsp. 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–OCC–
2004–19 and should be submitted on or
before February 28, 2005.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.8
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5–474 Filed 2–4–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51113; File No. SR–PCX–
2005–08]
Self-Regulatory Organizations; Pacific
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Thereto Relating to a
Revision and Extension of a Limitation
on Trade Through Liability at the End
of the Options Trading Day Pilot
Program
January 31, 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
26, 2005, the Pacific Exchange (‘‘PCX’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
8 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\07FEN1.SGM
07FEN1
6488
Federal Register / Vol. 70, No. 24 / Monday, February 7, 2005 / Notices
below, which Items have been prepared
by the PCX. The Exchange has filed the
proposal as a ‘‘non-controversial’’ rule
change pursuant to Section 19(b)(3)(A)
of the Act,3 and Rule 19b–4(f)(6)
thereunder,4 which renders the proposal
effective upon filing with the
Commission.5 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 extend a
pilot program for a limitation on tradethrough liability for certain orders
submitted pursuant to the Plan for the
Purpose of Creating and Operating an
Intermarket Option Linkage (the
‘‘Linkage Plan’’) during the period five
minutes before the close of trading of
the underlying security until the close
of trading in the options class (‘‘Pilot
Program’’). The Pilot Program would be
extended to January 31, 2006 and would
increase the limit on trade-through
liability at the end of the day from 25
contracts to 50 contracts.
The text of the proposed rule change
is available on the PCX’s Web site at
https://www.pacificex.com, at the
Exchange’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,
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 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
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this rule filing is to
extend the pilot provision limiting
trade-through liability at the end of the
day. Pursuant to the Pilot Program as
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
5 The PCX asked the Commission to waive the 30day operative delay. See Rule 19b–4(f)(6)(iii). 17
CFR 240.19b–4(f)(6)(iii).
4 17
VerDate jul<14>2003
21:57 Feb 04, 2005
Jkt 205001
currently in effect, an OTP Holder’s 6 or
OTP Firm’s 7 trade-through liability is
limited to 25 contracts per Satisfaction
Order 8 for the period between five
minutes prior to the close of trading in
the underlying security and the close of
trading in the options class.
The proposed rule change would
extend the Pilot Program for an
additional year, until January 31, 2006.
In addition, the proposal will increase
the limit on trade-through liability at the
end of the day from 25 contracts to 50
contracts. This increase in the limit on
liability would be effective on February
1, 2005, when the current pilot expires.
The period during which this limit will
apply will remain the same, from five
minutes prior to the close of trading in
the underlying security until the close
of trading in the options class.
The participants in the Linkage Plan
(‘‘Participants’’) are currently
considering Linkage Plan amendments
that, if proposed and approved, could
obviate the need for this limitation of
liability. Specifically, the amendments
would increase the ability to receive
automatic execution of P/A Orders 9 and
would provide tools to avoid tradethrough liability generally, including at
the end of the day. The Participants,
including the Exchange, anticipate that
these amendments could be in effect
within a year. At that time, the
Participants would either allow the pilot
to lapse, or, if they believed that a
continuation of the limitation was
appropriate, would discuss the matter
further with Commission staff.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,10 in general, and
furthers the objectives of Section
6(b)(5),11 in particular, because it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
change, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities,
and to remove impediments to and
PCX Rule 1(q).
PCX Rule 1(r).
8 A ‘‘Satisfaction Order’’ is an order sent through
the Linkage to notify a Participant Exchange of a
Trade-Through and to seek satisfaction of the
liability arising from that Trade-Through. See
Section 2(16)(c) of the Linkage Plan.
9 A Principal Acting as Agent (‘‘P/A’’) Order is an
order for the principal account of a Market Maker
that is authorized to represent Customer orders,
reflecting the terms of a related unexecuted
Customer order for which the Market Maker is
acting as agent. See Section 2(16)(a) of the Linkage
Plan.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
PO 00000
6 See
7 See
Frm 00082
Fmt 4703
Sfmt 4703
perfect the mechanism of a free and
open market and a national market
system.
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 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 comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing rule change: (1)
Does not significantly affect the
protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) does not become operative for 30
days from the date on which it was
filed, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, the proposed rule
change has become effective pursuant to
Section 19(b)(3)(A) of the Act 12 and
Rule 19b–4(f)(6) thereunder.13
A proposed rule change filed under
Rule 19b–4(f)(6) 14 normally does not
become operative prior to 30 days after
the date of filing. However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the five-day prefiling requirement and the 30-day
operative delay, as specified in Rule
19b–4(f)(6)(iii), and designate the
proposed rule change immediately
operative.
The Commission believes that
waiving the five-day pre-filing provision
and the 30-day operative delay is
consistent with the protection of
investors and the public interest.15 By
waiving the pre-filing requirement and
accelerating the operative date, the Pilot
Program can continue without
interruption. The Commission believes
that allowing the pilot to continue will
12 15
13 17
U.S.C. 78s(b)(3)(A)
CFR 240.19b–4(f)(6).
14 Id.
15 For purposes of accelerating the operative date
of this proposal, the Commission has considered
the proposed rule’s impact on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
E:\FR\FM\07FEN1.SGM
07FEN1
Federal Register / Vol. 70, No. 24 / Monday, February 7, 2005 / Notices
allow Participants to either gather
sufficient information to justify the need
for the pilot program or determine that
the exemption from trade-through
liability is no longer necessary.
Increasing the maximum number of
contracts to be satisfied with respect to
Satisfaction Orders in the last seven
minutes of trading in options to 50
contracts will enhance customer order
protection.
At any time within 60 days of the
filing of such 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:
Electronic Comments
• Use the Commission’s Internet
comment form
(https://www.sec.gov/rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–PCX–2005–08 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
450 Fifth Street, NW., Washington, DC
20549–0609.
All submissions should refer to File
Number SR–PCX–2005–08. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site
(https://www.sec.gov/rules/sro.shtml).
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 the filing also will be
VerDate jul<14>2003
21:04 Feb 04, 2005
Jkt 205001
available for inspection and copying at
the principal offices of the PCX. 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–PCX–2005–08 and should
be submitted on or before February 28,
2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.16
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5–466 Filed 2–4–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51094; File No. SR–PCX–
2004–43]
Self-Regulatory Organizations; Order
Approving Proposed Rule Change and
Amendment Nos. 1 and 2 Thereto by
the Pacific Exchange, Inc. and Notice
of Filing and Order Granting
Accelerated Approval to Amendment
No. 3 Thereto Relating to a Proposed
Listing Fee Schedule for Structured
Products
January 28, 2005.
I. Introduction
On May 11, 2004, the Pacific
Exchange, Inc. (‘‘PCX’’) submitted to 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 its fee schedule to provide
separate listing fees for structured
products. PCX filed Amendment No. 1
to the proposed rule change on August
9, 2004.3 PCX filed Amendment No. 2
to the proposed rule change on August
23, 2004.4
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See letter from Tania Blanford, Regulatory
Policy, PCX, to Nancy J. Sanow, Assistant Director,
Division of Market Regulation (‘‘Division’’),
Commission, dated August 5, 2004 (‘‘Amendment
No. 1’’). Amendment No. 1 replaced and
superseded the original filing in its entirety. In
Amendment No. 1, PCX added a definition of
‘‘Structured Products’’ to the proposal and made
other clarifying changes.
4 See letter from Tania Blanford, Regulatory
Policy, PCX, to Nancy J. Sanow, Assistant Director,
Division, Commission, dated August 20, 2004
(‘‘Amendment No. 2’’). In Amendment No. 2, PCX
made a minor typographical correction to its
proposed rule text.
PO 00000
16 17
1 15
Frm 00083
Fmt 4703
Sfmt 4703
6489
The proposed rule change and
Amendment Nos. 1 and 2 were
published for comment in the Federal
Register on September 24, 2004.5 The
Commission received no comment
letters on the proposed rule change and
Amendment Nos. 1 and 2. PCX filed
Amendment No. 3 to the proposed rule
change on December 9, 2004.6 This
order approves the proposed rule
change and Amendment Nos. 1 and 2,
and issues notice of filing of, and
approves on an accelerated basis,
Amendment No. 3.
II. Description of the Proposed Rule
Change
The PCX, through its wholly-owned
subsidiary PCX Equities, Inc. (‘‘PCXE’’),
has proposed to adopt new listing fees
specifically for Structured Products
listed and traded on the Archipelago
Exchange. The proposed listing fees
include a non-refundable listing
application fee, initial listing fees, and
annual maintenance fees for Structured
Products. The proposal adds a
definition of ‘‘Structured Products’’ 7 to
the PCXE rules to clarify which
products would be assessed the
proposed listing fees.
In Amendment No. 3 to the proposed
rule change, PCX added definitions of
‘‘Exchange-Traded Fund’’ 8 and
‘‘Closed-End Fund’’ 9 to the PCXE rules
and a definition of ‘‘Funds’’ 10 to the
PCXE fee schedule. Amendment No. 3
also modified the proposed definition of
‘‘Structured Products.’’ Amendment No.
5 See Securities Exchange Act Release No. 50448
(October 1, 2004), 69 FR 58989.
6 In Amendment No. 3, PCX added definitions for
exchange-traded funds and closed-end funds and
added a statement to the fee schedule to clarify that
the term ‘‘Funds’’ refers to exchange-traded funds
and closed-end funds in order to properly
distinguish Funds from Structured Products.
7 As modified by Amendment No. 3, Structured
Products are defined as ‘‘products that are derived
from and/or based on a single security or securities,
a basket of stocks, an index, a commodity, debt
issuance and/or a foreign currency, among other
things’’ and would include ‘‘index and equity
linked notes, term notes and units generally
consisting of a contract to purchase equity and/or
debt securities at a specified time.’’
8 Amendment No. 3 defines Exchange-Traded
Funds as ‘‘unit investment trusts, portfolio
depository receipts and trust issued receipts
designed to track the performance of the broad
stock or bond market, stock industry sector, and
U.S. Treasury and corporate bonds, among other
things.’’
9 Amendment No. 3 defines Closed-End Funds
(‘‘CEFs’’) as ‘‘a type of investment company
registered under the Investment Company Act of
1940 that offers a fixed number of shares’’ that ‘‘are
professionally managed in accordance with the
CEF’s investment objectives and policies, and may
be invested in stocks, fixed income securities or a
combination of both.’’
10 Amendment No. 3 provides that ‘‘Funds’’, as
that term is used in the Fee Schedule, include
Exchange-Traded Funds and Closed-End Funds.
E:\FR\FM\07FEN1.SGM
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]]>Agencies
[Federal Register Volume 70, Number 24 (Monday, February 7, 2005)]
[Notices]
[Pages 6487-6489]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-466]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51113; File No. SR-PCX-2005-08]
Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Thereto
Relating to a Revision and Extension of a Limitation on Trade Through
Liability at the End of the Options Trading Day Pilot Program
January 31, 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 26, 2005, the Pacific Exchange (``PCX'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II
[[Page 6488]]
below, which Items have been prepared by the PCX. The Exchange has
filed the proposal as a ``non-controversial'' rule change pursuant to
Section 19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(6) thereunder,\4\
which renders the proposal effective upon filing with the
Commission.\5\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
\5\ The PCX asked the Commission to waive the 30-day operative
delay. See Rule 19b-4(f)(6)(iii). 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The PCX is proposing to extend a pilot program for a limitation on
trade-through liability for certain orders submitted pursuant to the
Plan for the Purpose of Creating and Operating an Intermarket Option
Linkage (the ``Linkage Plan'') during the period five minutes before
the close of trading of the underlying security until the close of
trading in the options class (``Pilot Program''). The Pilot Program
would be extended to January 31, 2006 and would increase the limit on
trade-through liability at the end of the day from 25 contracts to 50
contracts.
The text of the proposed rule change is available on the PCX's Web
site at https://www.pacificex.com, at the Exchange'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, 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 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this rule filing is to extend the pilot provision
limiting trade-through liability at the end of the day. Pursuant to the
Pilot Program as currently in effect, an OTP Holder's \6\ or OTP Firm's
\7\ trade-through liability is limited to 25 contracts per Satisfaction
Order \8\ for the period between five minutes prior to the close of
trading in the underlying security and the close of trading in the
options class.
---------------------------------------------------------------------------
\6\ See PCX Rule 1(q).
\7\ See PCX Rule 1(r).
\8\ A ``Satisfaction Order'' is an order sent through the
Linkage to notify a Participant Exchange of a Trade-Through and to
seek satisfaction of the liability arising from that Trade-Through.
See Section 2(16)(c) of the Linkage Plan.
---------------------------------------------------------------------------
The proposed rule change would extend the Pilot Program for an
additional year, until January 31, 2006. In addition, the proposal will
increase the limit on trade-through liability at the end of the day
from 25 contracts to 50 contracts. This increase in the limit on
liability would be effective on February 1, 2005, when the current
pilot expires. The period during which this limit will apply will
remain the same, from five minutes prior to the close of trading in the
underlying security until the close of trading in the options class.
The participants in the Linkage Plan (``Participants'') are
currently considering Linkage Plan amendments that, if proposed and
approved, could obviate the need for this limitation of liability.
Specifically, the amendments would increase the ability to receive
automatic execution of P/A Orders \9\ and would provide tools to avoid
trade-through liability generally, including at the end of the day. The
Participants, including the Exchange, anticipate that these amendments
could be in effect within a year. At that time, the Participants would
either allow the pilot to lapse, or, if they believed that a
continuation of the limitation was appropriate, would discuss the
matter further with Commission staff.
---------------------------------------------------------------------------
\9\ A Principal Acting as Agent (``P/A'') Order is an order for
the principal account of a Market Maker that is authorized to
represent Customer orders, reflecting the terms of a related
unexecuted Customer order for which the Market Maker is acting as
agent. See Section 2(16)(a) of the Linkage Plan.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\10\ in general, and furthers the
objectives of Section 6(b)(5),\11\ in particular, because it is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of change, to foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, and to remove impediments to and perfect the mechanism of a
free and open market and a national market system.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 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 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 comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing rule change: (1) Does not significantly
affect the protection of investors or the public interest; (2) does not
impose any significant burden on competition; and (3) does not become
operative for 30 days from the date on which it was filed, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest, the proposed rule
change has become effective pursuant to Section 19(b)(3)(A) of the Act
\12\ and Rule 19b-4(f)(6) thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A)
\13\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally
does not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the five-day pre-filing requirement and the 30-day
operative delay, as specified in Rule 19b-4(f)(6)(iii), and designate
the proposed rule change immediately operative.
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\14\ Id.
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The Commission believes that waiving the five-day pre-filing
provision and the 30-day operative delay is consistent with the
protection of investors and the public interest.\15\ By waiving the
pre-filing requirement and accelerating the operative date, the Pilot
Program can continue without interruption. The Commission believes that
allowing the pilot to continue will
[[Page 6489]]
allow Participants to either gather sufficient information to justify
the need for the pilot program or determine that the exemption from
trade-through liability is no longer necessary. Increasing the maximum
number of contracts to be satisfied with respect to Satisfaction Orders
in the last seven minutes of trading in options to 50 contracts will
enhance customer order protection.
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\15\ For purposes of accelerating the operative date of this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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At any time within 60 days of the filing of such 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:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-PCX-2005-08 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW.,
Washington, DC 20549-0609.
All submissions should refer to File Number SR-PCX-2005-08. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (https://www.sec.gov/
rules/sro.shtml). 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 the
filing also will be available for inspection and copying at the
principal offices of the PCX. 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-PCX-2005-08 and should be submitted on or before
February 28, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-466 Filed 2-4-05; 8:45 am]
BILLING CODE 8010-01-P
