Self-Regulatory Organizations; Notice of Filing and Proposed Rule Change and Amendment Nos. 1 and 2 Thereto by the Pacific Exchange, Inc. Relating to the Deletion of Obsolete or Unnecessary Rules, 15139-15141 [E5-1294]
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15139
Federal Register / Vol. 70, No. 56 / Thursday, March 24, 2005 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–1293 Filed 3–23–05; 8:45 am]
which have been determined by the
Exchange to be obsolete or unnecessary.
The text of the proposed rule change, as
amended, is set forth below.
Proposed deletions are in brackets.
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BILLING CODE 8010–01–P
Rule 4
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SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; Notice
of Filing and Proposed Rule Change
and Amendment Nos. 1 and 2 Thereto
by the Pacific Exchange, Inc. Relating
to the Deletion of Obsolete or
Unnecessary Rules
March 17, 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 July 9,
2004, 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 Exchange. On February
9, 2005, the Exchange filed Amendment
No. 1 to the proposed rule change.3 On
March 10, 2005, the Exchange filed
Amendment No. 2 to the proposed rule
change.4 The Commission is publishing
this notice to solicit comments on the
proposed rule change, as amended, from
interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to delete
certain of its rules, or portions thereof,
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Amendment No. 1 replaced and superseded the
original proposal.
4 In Amendment No. 2, PCX deleted the proposed
changes to PCX Rule 6.68(a), which would have
required an OTP Holder or OTP Firm to write its
name or badge number on the trade ticket, since the
necessary changes were made to PCX Rule 6.68(a)
on January 7, 2005. See Securities Exchange Act
Release No. 50998 (January 7, 2005), 70 FR 2443
(January 13, 2005)(approving File No. SR–PCX–
2004–122). In SR–PCX–2004–122, PCX amended its
rules relating to the systematization of orders in
connection with the requirement to design and
implement a consolidated options audit trail
system, which included PCX Rule 6.68(a). PCX
represents that the information in PCX Rule 6.68(a)
is the same information required in PCX Options
Floor Procedure Advice D–10. Amendment No. 2
also deleted language in the filing related to PCX
Rule 6.68(a). In addition, Amendment No. 2
corrected a typographical error in the proposed rule
text.
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Exemptions
[Release No. 34–51392; File No. SR–PCX–
2004–65]
13 17
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Rule 4.7 An OTP Holder or OTP Firm
shall be exempt from the filing
requirements prescribed by Rules 4.5
and 4.6 under the following conditions:
(a) Any Floor Broker, Market Maker in
listed options, or Lead Market Maker in
listed options, registered with the
Exchange in any such capacity, who is
exempt from the minimum net capital
requirements prescribed by Rule 4.1.
[An OTP Holder or OTP Firm
qualifying for an exemption from the
regular filing requirements pursuant to
this Paragraph shall file with the
Exchange for each calendar quarter a
balance sheet and income statement in
such form as prescribed by the
Exchange. Such balance sheet and
income statement shall be due by the
fifteenth calendar day following the end
of each calendar quarter in which the
exemption provided in this Paragraph is
applicable.]
(b) Any OTP Holder or OTP Firm that
is a member of another self-regulatory
organization, which has been designated
the examining authority for such OTP
Holder or OTP Firm by the Securities
and Exchange Commission.
[An OTP Holder or OTP Firm
qualifying for an exemption pursuant to
this Paragraph shall file with the
Exchange a copy of Notice and Part II
of SEC Form X–17A–5, including such
supplementary schedules as may be
required, pursuant to the provisions of
Rule 17a-11 under the Securities
Exchange Act of 1934, as amended, at
such time and at such frequency as
prescribed by such other Designated
Examining Authority or by any
applicable rule.]
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Rule 11
Business Conduct
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Joint Accounts
Rule 11.12(a)—No change.
[(b) Reporting. No OTP Holder or OTP
Firm, nor any participant therein shall
directly or indirectly hold any interest
or participation in any substantial joint
account for buying or selling any
security through the facilities of the
Exchange, unless such joint account is
PO 00000
Frm 00075
Fmt 4703
Sfmt 4703
reported to and not disapproved by the
Exchange. Such reports, in form
prescribed by the Exchange, shall be
filed with the Exchange before any
transaction is completed through the
facilities of the Exchange for such joint
account.
The Exchange shall require weekly
reports, in form prescribed by the
Exchange, to be filed with it with
respect to every substantial joint
account for buying or selling any
specific security on the Exchange and
with respect to every joint account
which actively trades in any security on
the Exchange in which any OTP Holder,
OTP Firm or participant therein holds
any interest or participation or of which
such OTP Holder, OTP Firm or
participant therein has knowledge by
reason of transactions executed by or
through such OTP Holder, OTP Firm or
participant therein; provided, however,
that this paragraph shall not apply to
joint accounts specifically permitted by
this Rule.
In the event the requirements hereof
should be applicable to a security also
dealt in on another national securities
exchange having requirements
substantially equivalent hereto and an
OTP Holder or OTP Firm is a member
or member firm of such other exchange
and complies with such requirements of
such other exchange, then such OTP
Holder or OTP Firm need not comply
with the reporting provisions hereof.]
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Options Floor Procedure Advices
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Orders
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[D–10
Subject: Imprinting the Name of OTP
Holder or OTP Firm on Trade Tickets
Rule 6.66 requires an OTP Holder or
OTP Firm to immediately give up the
name of the clearing member through
whom the transaction will be cleared
and Rule 6.67 requires that orders be in
a written form approved by the
Exchange.
In order to reduce confusion and
potential errors, the Exchange has ruled
that OTP Holders or OTP Firms ordering
trade tickets, other than Market Maker
trade tickets, either from the Exchange
or from other approved sources, shall
cause to be imprinted or written thereon
the name of the OTP Holder or OTP
Firm that will be given up in
transactions effected by the use of that
ticket.]
E:\FR\FM\24MRN1.SGM
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15140
Federal Register / Vol. 70, No. 56 / Thursday, March 24, 2005 / Notices
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
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
On December 9, 2003, the Exchange
responded to a request from the
Commission’s Office of Compliance
Inspections and Examinations for
obligation compliance with respect to
Section 19(g) of the Act.5 The Exchange
performed a complete review of PCX
rules, as well as the surveillance
procedures thereto, and found a number
of PCX rules that are obsolete or
superfluous in the current market
structure. Thus, the Exchange proposes
to delete these inapplicable rules, or
portions thereof, at this time. The
proposed rules, or portions thereof, to
be deleted are:
1. PCX Rule 4.7—This rule requires
OTP Holders that are exempt from the
net capital requirement filings (Options
Market Makers without proprietary
trading and inactive lessors) to file with
the Exchange a balance sheet and
income statement every calendar
quarter. The Exchange represents that
this rule is obsolete because the
Exchange never implemented this
reporting requirement as unnecessary.
According to the Exchange, under Rule
17a–10 of the Act,6 exempt OTP Holders
are only required to file an annual
FOCUS Report, which includes a
balance sheet and income statement on
an annual basis.
2. PCX Rule 11.12(b)—This rule
relates to PCX Joint Accounts reporting
requirements. The Exchange proposes to
delete this provision as unnecessary.
According to the Exchange, PCX, by
policy, does not allow the use of joint
accounts by OTP Holders or OTP Firms
for which the Exchange serves as the
Designated Examining Authority, with
one exception. Joint accounts are
5 15
6 17
allowed for Market Makers who trade on
the floor. The use of these accounts is
controlled by Shareholder and
Registration Services (‘‘SRS’’). SRS
assigns the acronyms for use of these
accounts (e.g., J68). Since these accounts
are assigned by SRS, and all trades are
monitored daily and fed through PCX’s
existing surveillance systems, the
Exchange does not require a separate
weekly reporting requirement.
3. PCX Options Floor Procedure
Advice D–10 (Imprinting the Name of
OTP Holder or OTP Firm on Trade
Tickets)—The Exchange no longer
requires that the name of the OTP
Holder or OTP Firm be imprinted on the
trade tickets. The required ticket
information is now set forth in PCX
Rule 6.68.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,7 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,8 in particular, in that it is
designed to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in facilitating transactions in securities,
to remove impediments to and perfect
the mechanism of a free and open
market and a national market system,
and to protect investors and the public
interest.
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
Written comments on the proposed
rule change were neither solicited nor
received.
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:
U.S.C. 78s(b).
CFR 240.17a–10.
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15:04 Mar 23, 2005
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U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00076
Fmt 4703
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(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–PCX–2004–65 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–2004–65. 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 such filing also will be
available for inspection and copying at
the principal office of the Exchange. 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–2004–65 and should
be submitted on or before April 14,
2005.
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Federal Register / Vol. 70, No. 56 / Thursday, March 24, 2005 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.9
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–1294 Filed 3–23–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51394; File No. SR–Phlx–
2004–83]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing of Proposed Rule
Change and Amendment No. 1 Thereto
Relating to the Matching of Certain
Incoming Orders With Certain Phlx
Existing Orders
March 18, 2005.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1, and Rule 19b–4 2 thereunder,
notice is hereby given that on November
26, 2004, 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. On
March 10, 2005, the Phlx filed
Amendment No. 1 to the proposed rule
change.3 The Commission is publishing
this notice to solicit comments on the
proposed rule change, as amended, from
interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Phlx proposes to modify Phlx
Rule 229 to permit the PACE 4 System
to match certain incoming orders with
certain Phlx existing orders (the
‘‘Matching Rule’’).
The text of amended Phlx Rule 229 is
set forth below. New text is italicized
and [brackets] indicate deletions.
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 In Amendment No. 1, which replaced the
original proposal in its entirety, Phlx modified two
concepts contained in the original proposed rule
change (those of the Midpoint Price and the
Modified PACE Quote), clarified the operation of
the proposed rule change, reorganized the rule text
of proposed new Supplementary Material .04A to
Phlx Rule 229 into subsections, and made
corresponding changes to other portions of the
Supplementary Material to Phlx Rule 229 to reflect
the applicability of the proposed rule change.
4 PACE is the Exchange’s automated order
routing, delivery, execution and reporting system
for equities. See Phlx Rule 229.
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Rule 229. Philadelphia Stock Exchange
Automated Communication and
Execution System (PACE)
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Supplementary Material: * * *
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.01 No Change.
.02 Specialists are required to
provide, at a minimum, PACE execution
parameters, as defined by the Rule, to
agency orders received through the
system, except as provided below.
Although specialists are not required
to provide PACE execution parameters,
except enhanced matching in
Supplementary Material .04A, to nonagency orders received through PACE, if
the specialists choose to execute nonagency orders automatically through
PACE, they must provide the same
PACE executions to non-agency orders
as they provide to agency orders. If
however, the specialists choose to
execute non-agency orders manually,
they must adhere to existing Exchange
rules governing orders not on the system
with respect to such orders.
For purposes of the PACE System, an
agency order is any order entered on
behalf of a public customer, and does
not include any order entered for the
account of a broker-dealer, or any
account in which a broker-dealer or an
associated person of a broker-dealer has
any direct or indirect interest. Nonagency orders are not permitted on
PACE except where the Exchange has
been provided with a Specialist
Agreement, signed by the respective
specialist, acknowledging the
acceptance of such non-agency orders
from the specific firm(s), and any
minimum execution parameters (order
size guarantees) agreed to be provided to
such orders by the respective specialist.
Any such Specialist Agreement must
provide the same minimum execution
parameters to all non-agency orders by
that specialist and will not provide for
greater order size guarantees to nonagency orders than those provided to
agency orders. Specialists’ agreements
to execute non-agency orders on PACE,
and the termination of such agreements,
shall be in accordance with the
procedures set by the Exchange.
The specialist may choose to accept
orders through PACE, without
participating in the PACE execution
guarantees for agency orders, where the
entering member organization has
generally elected not to receive
automatic execution or primary market
print protection for electronically
delivered limit orders, in accordance
with the procedures established by the
Floor Procedure Committee.
.03–.04 No Change.
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15141
.04A (a) Definitions. For purposes of
this Supplementary Material:
(i) Midpoint Price means the midpoint
of the Modified PACE Quote as
rounded, if applicable. Rounding will be
applicable if the midpoint of the
Modified PACE Quote is not a penny
increment, in which case the Midpoint
Price shall be rounded down (up) to the
nearest penny if the existing Phlx order
is an order to buy (sell). When the
Modified PACE Quote is locked, the
Midpoint Price is the locked price.
(ii) Modified PACE Quote means the
PACE Quote, unless the PACE Quote is
comprised of another market’s quote of
100 shares or less (‘‘100 Share Away
Quote’’), in which case the Modified
PACE Quote will be 1 cent away from
such 100 Share Away Quote.
(b) Enhanced Matching
(i) Round-lot market and limit orders
(except as provided in (ii) below) and
the round-lot portion of non-all-or-none
PRL market and limit orders entered
after the opening when the PACE Quote
is not crossed will execute against
existing round-lot market and limit
orders and the round-lot portion of nonall-or-none PRL market and limit orders
that have not been marked for lay-off
and are executable at or within the
Modified PACE Quote, if any, before
being processed according to
Supplementary Material .05, .07(b),
(c)(i)–(ii) or .10(a)(i) of this rule or Rule
229A.
(ii) If the round-lot order entered after
the opening is an all-or-none order, then
such order will only receive the
treatment described in the previous
sentence if the size of the first potential
existing order it would execute against
is equal to or greater than such order.
(iii) No order for which the entering
member organization has elected
primary market high-low protection (as
provided in .07(a)(ii)) will be matched in
(i) above, if the execution price of such
execution would be outside the primary
market high-low range for the day.
(iv) Enhanced Matching Priority.
Notwithstanding Supplementary
Material .01 regarding priority, existing
Phlx orders will be executed in price/
time priority with the highest bid/lowest
offer executed first, with existing market
orders, for purposes of enhanced
matching priority, being treated as limit
orders priced at the Midpoint Price.
(c) Execution Price
(i) If the orders to be matched in (b)
above are both market orders, then the
execution price of these orders is the
Midpoint Price.
(ii) If the orders to be matched in (b)
above are both limit orders, then the
execution price of these orders is the
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]]>Agencies
[Federal Register Volume 70, Number 56 (Thursday, March 24, 2005)]
[Notices]
[Pages 15139-15141]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-1294]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51392; File No. SR-PCX-2004-65]
Self-Regulatory Organizations; Notice of Filing and Proposed Rule
Change and Amendment Nos. 1 and 2 Thereto by the Pacific Exchange, Inc.
Relating to the Deletion of Obsolete or Unnecessary Rules
March 17, 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 July 9, 2004, 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 Exchange. On February 9, 2005, the
Exchange filed Amendment No. 1 to the proposed rule change.\3\ On March
10, 2005, the Exchange filed Amendment No. 2 to the proposed rule
change.\4\ The Commission is publishing this notice to solicit comments
on the proposed rule change, as amended, from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 replaced and superseded the original
proposal.
\4\ In Amendment No. 2, PCX deleted the proposed changes to PCX
Rule 6.68(a), which would have required an OTP Holder or OTP Firm to
write its name or badge number on the trade ticket, since the
necessary changes were made to PCX Rule 6.68(a) on January 7, 2005.
See Securities Exchange Act Release No. 50998 (January 7, 2005), 70
FR 2443 (January 13, 2005)(approving File No. SR-PCX-2004-122). In
SR-PCX-2004-122, PCX amended its rules relating to the
systematization of orders in connection with the requirement to
design and implement a consolidated options audit trail system,
which included PCX Rule 6.68(a). PCX represents that the information
in PCX Rule 6.68(a) is the same information required in PCX Options
Floor Procedure Advice D-10. Amendment No. 2 also deleted language
in the filing related to PCX Rule 6.68(a). In addition, Amendment
No. 2 corrected a typographical error in the proposed rule text.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to delete certain of its rules, or portions
thereof, which have been determined by the Exchange to be obsolete or
unnecessary. The text of the proposed rule change, as amended, is set
forth below.
Proposed deletions are in brackets.
* * * * *
Rule 4
* * * * *
Exemptions
Rule 4.7 An OTP Holder or OTP Firm shall be exempt from the filing
requirements prescribed by Rules 4.5 and 4.6 under the following
conditions:
(a) Any Floor Broker, Market Maker in listed options, or Lead
Market Maker in listed options, registered with the Exchange in any
such capacity, who is exempt from the minimum net capital requirements
prescribed by Rule 4.1.
[An OTP Holder or OTP Firm qualifying for an exemption from the
regular filing requirements pursuant to this Paragraph shall file with
the Exchange for each calendar quarter a balance sheet and income
statement in such form as prescribed by the Exchange. Such balance
sheet and income statement shall be due by the fifteenth calendar day
following the end of each calendar quarter in which the exemption
provided in this Paragraph is applicable.]
(b) Any OTP Holder or OTP Firm that is a member of another self-
regulatory organization, which has been designated the examining
authority for such OTP Holder or OTP Firm by the Securities and
Exchange Commission.
[An OTP Holder or OTP Firm qualifying for an exemption pursuant to
this Paragraph shall file with the Exchange a copy of Notice and Part
II of SEC Form X-17A-5, including such supplementary schedules as may
be required, pursuant to the provisions of Rule 17a-11 under the
Securities Exchange Act of 1934, as amended, at such time and at such
frequency as prescribed by such other Designated Examining Authority or
by any applicable rule.]
* * * * *
Rule 11
Business Conduct
* * * * *
Joint Accounts
Rule 11.12(a)--No change.
[(b) Reporting. No OTP Holder or OTP Firm, nor any participant
therein shall directly or indirectly hold any interest or participation
in any substantial joint account for buying or selling any security
through the facilities of the Exchange, unless such joint account is
reported to and not disapproved by the Exchange. Such reports, in form
prescribed by the Exchange, shall be filed with the Exchange before any
transaction is completed through the facilities of the Exchange for
such joint account.
The Exchange shall require weekly reports, in form prescribed by
the Exchange, to be filed with it with respect to every substantial
joint account for buying or selling any specific security on the
Exchange and with respect to every joint account which actively trades
in any security on the Exchange in which any OTP Holder, OTP Firm or
participant therein holds any interest or participation or of which
such OTP Holder, OTP Firm or participant therein has knowledge by
reason of transactions executed by or through such OTP Holder, OTP Firm
or participant therein; provided, however, that this paragraph shall
not apply to joint accounts specifically permitted by this Rule.
In the event the requirements hereof should be applicable to a
security also dealt in on another national securities exchange having
requirements substantially equivalent hereto and an OTP Holder or OTP
Firm is a member or member firm of such other exchange and complies
with such requirements of such other exchange, then such OTP Holder or
OTP Firm need not comply with the reporting provisions hereof.]
* * * * *
Options Floor Procedure Advices
* * * * *
Orders
* * * * *
[D-10
Subject: Imprinting the Name of OTP Holder or OTP Firm on Trade Tickets
Rule 6.66 requires an OTP Holder or OTP Firm to immediately give up
the name of the clearing member through whom the transaction will be
cleared and Rule 6.67 requires that orders be in a written form
approved by the Exchange.
In order to reduce confusion and potential errors, the Exchange has
ruled that OTP Holders or OTP Firms ordering trade tickets, other than
Market Maker trade tickets, either from the Exchange or from other
approved sources, shall cause to be imprinted or written thereon the
name of the OTP Holder or OTP Firm that will be given up in
transactions effected by the use of that ticket.]
[[Page 15140]]
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 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
On December 9, 2003, the Exchange responded to a request from the
Commission's Office of Compliance Inspections and Examinations for
obligation compliance with respect to Section 19(g) of the Act.\5\ The
Exchange performed a complete review of PCX rules, as well as the
surveillance procedures thereto, and found a number of PCX rules that
are obsolete or superfluous in the current market structure. Thus, the
Exchange proposes to delete these inapplicable rules, or portions
thereof, at this time. The proposed rules, or portions thereof, to be
deleted are:
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78s(b).
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1. PCX Rule 4.7--This rule requires OTP Holders that are exempt
from the net capital requirement filings (Options Market Makers without
proprietary trading and inactive lessors) to file with the Exchange a
balance sheet and income statement every calendar quarter. The Exchange
represents that this rule is obsolete because the Exchange never
implemented this reporting requirement as unnecessary. According to the
Exchange, under Rule 17a-10 of the Act,\6\ exempt OTP Holders are only
required to file an annual FOCUS Report, which includes a balance sheet
and income statement on an annual basis.
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\6\ 17 CFR 240.17a-10.
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2. PCX Rule 11.12(b)--This rule relates to PCX Joint Accounts
reporting requirements. The Exchange proposes to delete this provision
as unnecessary. According to the Exchange, PCX, by policy, does not
allow the use of joint accounts by OTP Holders or OTP Firms for which
the Exchange serves as the Designated Examining Authority, with one
exception. Joint accounts are allowed for Market Makers who trade on
the floor. The use of these accounts is controlled by Shareholder and
Registration Services (``SRS''). SRS assigns the acronyms for use of
these accounts (e.g., J68). Since these accounts are assigned by SRS,
and all trades are monitored daily and fed through PCX's existing
surveillance systems, the Exchange does not require a separate weekly
reporting requirement.
3. PCX Options Floor Procedure Advice D-10 (Imprinting the Name of
OTP Holder or OTP Firm on Trade Tickets)--The Exchange no longer
requires that the name of the OTP Holder or OTP Firm be imprinted on
the trade tickets. The required ticket information is now set forth in
PCX Rule 6.68.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\7\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\8\ in particular, in that it
is designed to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and to protect investors and the public interest.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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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 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
nor received.
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 an e-mail to rule-comments@sec.gov. Please include
File Number SR-PCX-2004-65 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-2004-65. 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 such
filing also will be available for inspection and copying at the
principal office of the Exchange. 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-2004-65 and should be submitted on or before April
14, 2005.
[[Page 15141]]
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-1294 Filed 3-23-05; 8:45 am]
BILLING CODE 8010-01-P
