Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To Amend Its Minor Rule Plan and Recommended Fine Schedule in Connection With Rules Regarding Principal Orders, Principal Acting as Agent Orders, and Limitations on Principal Order Access, 57918-57919 [05-19807]

Download as PDF 57918 Federal Register / Vol. 70, No. 191 / Tuesday, October 4, 2005 / Notices Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–9303. All submissions should refer to File No. SR–PCX–2005–106. 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 will also be available for inspection and copying at the principal office 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 No. SR–PCX–2005–106 and should be submitted on or before October 25, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.16 Jonathan G. Katz, Secretary. [FR Doc. 05–19773 Filed 10–3–05; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52523; File No. SR–PCX– 2005–98] Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To Amend Its Minor Rule Plan and Recommended Fine Schedule in Connection With Rules Regarding Principal Orders, Principal Acting as Agent Orders, and Limitations on Principal Order Access A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change September 28, 2005. 1. Purpose 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 16, 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 Exchange. On September 27, 2005, the Exchange 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 PCX proposes to amend its Minor Rule Plan (‘‘MRP’’) and Recommended Fine Schedule (‘‘RFS’’) under PCX Rule 10.12 with respect to provisions of the PCX Options Linkage program (‘‘Linkage’’) that relate to Principal Orders (‘‘P Orders’’), Principal Acting as Agent Orders (‘‘P/A Orders’’), and Limitations on Principal Order Access. The text of the proposed rule change is available on the Exchange’s Internet Web site (https://www.pacificex.com), at the Exchange’s principal office, 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 Exchange included statements BILLING CODE 8010–01–P 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 In Amendment No. 1, the Exchange incorporated additional provisions under PCX Rule 6.93 to apply to the Minor Rule Plan and Recommended Fine Schedule, provided more detailed descriptions of the PCX Rules that would apply to the Minor Rule Plan and Recommended Fine Schedule under this proposed rule change, and made other non-substantive changes to clarify the purpose of the proposal. 1 2 17 16 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 16:55 Oct 03, 2005 Jkt 205001 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. PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 The Exchange’s MRP, which incorporates the RFS, under PCX Rule 10.12 provides for an abbreviated procedure for the resolution of minor rule violations. The Exchange is proposing to amend the MRP and RFS to bring additional rules within their coverage. PCX believes that inclusion of such matters would provide a fair means of promptly resolving minor rule violations that do not rise to the level of formal disciplinary proceedings and enforcement action. Specifically, the Exchange is proposing to add the violation of its Linkage rules relating to: (i) P Orders and P/A Orders (PCX Rules 6.93(a), (b), (c)(1), (d), and (e)), which require OTP Holders and OTP Firms 4 to observe certain time constraints and Linkage order procedures in sending and receiving P Orders and P/A Orders through Linkage; and (ii) Limitations on Principal Order Access (also known as 80/20) (PCX Rule 6.96), which prohibits the sending of P Orders in an eligible option class through Linkage for a given quarter if a market maker effected 20 percent or more of its volume by sending P Orders through Linkage. As proposed, an OTP Holder or OTP Firm, who fails to follow the Linkage rules set forth above, would be fined $500 for the first violation, $1,000 for the second violation, and $2,500 for the third violation.5 The Exchange believes that the proposed rule change would strengthen the ability of the Exchange to carry out its oversight responsibilities as a selfregulatory organization. The Exchange also believes that the proposed rule change should aid PCX in carrying out its surveillance and enforcement functions. The Exchange represents that 4 The terms ‘‘OTP Holder’’ and ‘‘OTP Firm’’ are defined in PCX Rules 1.1(q) and 1.1(r), respectively. 5 If the PCX determines that a violation is not minor in nature, including repeated violations of a PCX Rule, the PCX may, at its discretion, proceed under PCX Rule 10.4 (Complaints) rather than under the MRP. See PCX Rule 10.12(f). E:\FR\FM\04OCN1.SGM 04OCN1 Federal Register / Vol. 70, No. 191 / Tuesday, October 4, 2005 / Notices it does not minimize the importance of compliance with these rules and all other rules subject to the imposition of fines under the Exchange’s MRP. The Exchange relies on its MRP as a tool to address enumerated violations to provide the Exchange with greater flexibility in addressing violations that may not require formal disciplinary proceedings. Under the proposed rule change, the Exchange’s Enforcement Department would continue to exercise its discretion under PCX Rule 10.12(f) and pursue certain cases as a formal disciplinary matter under PCX Rule 10.4 to the extent that the facts or circumstances warrant such action.6 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 would promote just and equitable principles of trade, facilitate transactions in securities, remove impediments to and perfect the mechanisms of a free and open market and a national market system, and protect investors and the public interest. The proposal is also consistent with, and furthers the objectives of, Sections 6(b)(6) and 6(b)(7) of the Act 9 in that it would help ensure that members and persons associated with members are appropriately disciplined for violations of the Act, the rules and regulations thereunder, and the rules of the Exchange, and provide a fair procedure for disciplining members and persons associated with members. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change would 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 No written comments were solicited or received with respect to 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 6 See supra note 5. U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). 9 15 U.S.C. 78f(b)(6) and (7). 7 15 VerDate Aug<31>2005 16:55 Oct 03, 2005 Jkt 205001 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 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, as amended, 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–2005–98 on the subject line. 57919 should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–PCX–2005–98 and should be submitted on or before October 25, 2005. For the Commission by the Division of Market Regulation, pursuant to delegated authority.10 Jonathan G. Katz, Secretary. [FR Doc. 05–19807 Filed 10–3–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52512; File No. SR–Phlx– 2005–50] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Reduce the Value of PHLX Housing SectorSM Index Options by Half September 27, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 Paper comments (‘‘Act’’),1 and Rule 19b–4 thereunder,2 • Send paper comments in triplicate notice is hereby given that on to Jonathan G. Katz, Secretary, September 15, 2005, the Philadelphia Securities and Exchange Commission, Stock Exchange, Inc. (‘‘Phlx’’ or Station Place, 100 F Street, NE., ‘‘Exchange’’) filed with the Securities Washington, DC 20549–9303. and Exchange Commission (‘‘SEC’’ or All submissions should refer to File ‘‘Commission’’) the proposed rule Number SR–PCX–2005–98. This file change as described in Items I and II number should be included on the below, which Items have been prepared subject line if e-mail is used. To help the by the Phlx. The Phlx filed the proposal Commission process and review your pursuant to Section 19(b)(3)(A) under comments more efficiently, please use the Act,3 and Rule 19b–4(f)(6) only one method. The Commission will thereunder,4 which renders the proposal post all comments on the Commission’s effective upon filing with the Internet Web site Commission. The Commission is (https://www.sec.gov/rules/sro.shtml). publishing this notice to solicit Copies of the submission, all subsequent comments on the proposed rule change amendments, all written statements from interested persons. with respect to the proposed rule I. Self-Regulatory Organization’s change that are filed with the Statement of the Terms of Substance of Commission, and all written the Proposed Rule Change communications relating to the proposed rule change between the The Phlx proposes to reduce the value Commission and any person, other than of its PHLX Housing SectorSM Index those that may be withheld from the (‘‘Index’’) option (‘‘HGX’’) 5 to one-half public in accordance with the 10 17 CFR 200.30–3(a)(12). provisions of 5 U.S.C. 552, will be 1 15 U.S.C. 78s(b)(1). available for inspection and copying in 2 17 CFR 240.19b–4. the Commission’s Public Reference 3 15 U.S.C. 78s(b)(3)(A). Section, 100 F Street, NE., Washington, 4 17 CFR 240.19b–4(f)(6). DC 20549. Copies of such filing also will 5 The PHLX Housing SectorSM (HGXSM) is a be available for inspection and copying modified capitalization-weighted index composed of 21 companies whose primary lines of business at the principal offices of the Exchange. are directly associated with the U.S. housing All comments received will be posted construction market. The index composition without change; the Commission does encompasses residential builders, suppliers of not edit personal identifying aggregate, lumber and other construction materials, Continued information from submissions. You PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 E:\FR\FM\04OCN1.SGM 04OCN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 70, Number 191 (Tuesday, October 4, 2005)]
[Notices]
[Pages 57918-57919]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-19807]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52523; File No. SR-PCX-2005-98]


Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of 
Filing of Proposed Rule Change and Amendment No. 1 Thereto To Amend Its 
Minor Rule Plan and Recommended Fine Schedule in Connection With Rules 
Regarding Principal Orders, Principal Acting as Agent Orders, and 
Limitations on Principal Order Access

September 28, 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 August 16, 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 Exchange. On 
September 27, 2005, the Exchange 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange incorporated additional 
provisions under PCX Rule 6.93 to apply to the Minor Rule Plan and 
Recommended Fine Schedule, provided more detailed descriptions of 
the PCX Rules that would apply to the Minor Rule Plan and 
Recommended Fine Schedule under this proposed rule change, and made 
other non-substantive changes to clarify the purpose of the 
proposal.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    PCX proposes to amend its Minor Rule Plan (``MRP'') and Recommended 
Fine Schedule (``RFS'') under PCX Rule 10.12 with respect to provisions 
of the PCX Options Linkage program (``Linkage'') that relate to 
Principal Orders (``P Orders''), Principal Acting as Agent Orders (``P/
A Orders''), and Limitations on Principal Order Access. The text of the 
proposed rule change is available on the Exchange's Internet Web site 
(https://www.pacificex.com), at the Exchange's principal office, 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 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange's MRP, which incorporates the RFS, under PCX Rule 
10.12 provides for an abbreviated procedure for the resolution of minor 
rule violations. The Exchange is proposing to amend the MRP and RFS to 
bring additional rules within their coverage. PCX believes that 
inclusion of such matters would provide a fair means of promptly 
resolving minor rule violations that do not rise to the level of formal 
disciplinary proceedings and enforcement action.
    Specifically, the Exchange is proposing to add the violation of its 
Linkage rules relating to: (i) P Orders and P/A Orders (PCX Rules 
6.93(a), (b), (c)(1), (d), and (e)), which require OTP Holders and OTP 
Firms \4\ to observe certain time constraints and Linkage order 
procedures in sending and receiving P Orders and P/A Orders through 
Linkage; and (ii) Limitations on Principal Order Access (also known as 
80/20) (PCX Rule 6.96), which prohibits the sending of P Orders in an 
eligible option class through Linkage for a given quarter if a market 
maker effected 20 percent or more of its volume by sending P Orders 
through Linkage. As proposed, an OTP Holder or OTP Firm, who fails to 
follow the Linkage rules set forth above, would be fined $500 for the 
first violation, $1,000 for the second violation, and $2,500 for the 
third violation.\5\
---------------------------------------------------------------------------

    \4\ The terms ``OTP Holder'' and ``OTP Firm'' are defined in PCX 
Rules 1.1(q) and 1.1(r), respectively.
    \5\ If the PCX determines that a violation is not minor in 
nature, including repeated violations of a PCX Rule, the PCX may, at 
its discretion, proceed under PCX Rule 10.4 (Complaints) rather than 
under the MRP. See PCX Rule 10.12(f).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change would 
strengthen the ability of the Exchange to carry out its oversight 
responsibilities as a self-regulatory organization. The Exchange also 
believes that the proposed rule change should aid PCX in carrying out 
its surveillance and enforcement functions. The Exchange represents 
that

[[Page 57919]]

it does not minimize the importance of compliance with these rules and 
all other rules subject to the imposition of fines under the Exchange's 
MRP. The Exchange relies on its MRP as a tool to address enumerated 
violations to provide the Exchange with greater flexibility in 
addressing violations that may not require formal disciplinary 
proceedings. Under the proposed rule change, the Exchange's Enforcement 
Department would continue to exercise its discretion under PCX Rule 
10.12(f) and pursue certain cases as a formal disciplinary matter under 
PCX Rule 10.4 to the extent that the facts or circumstances warrant 
such action.\6\
---------------------------------------------------------------------------

    \6\ See supra note 5.
---------------------------------------------------------------------------

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 
would promote just and equitable principles of trade, facilitate 
transactions in securities, remove impediments to and perfect the 
mechanisms of a free and open market and a national market system, and 
protect investors and the public interest. The proposal is also 
consistent with, and furthers the objectives of, Sections 6(b)(6) and 
6(b)(7) of the Act \9\ in that it would help ensure that members and 
persons associated with members are appropriately disciplined for 
violations of the Act, the rules and regulations thereunder, and the 
rules of the Exchange, and provide a fair procedure for disciplining 
members and persons associated with members.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ 15 U.S.C. 78f(b)(6) and (7).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
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

    No written comments were solicited or received with respect to 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 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, as amended, 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-2005-98 on the subject line.

Paper comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-9303.

    All submissions should refer to File Number SR-PCX-2005-98. 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 Section, 100 F Street, 
NE., Washington, DC 20549. Copies of such filing also will be available 
for inspection and copying at the principal offices 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-2005-98 
and should be submitted on or before October 25, 2005.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jonathan G. Katz,
Secretary.
[FR Doc. 05-19807 Filed 10-3-05; 8:45 am]
BILLING CODE 8010-01-P

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