Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of Filing of Proposed Rule Change and Amendment Nos. 2 and 3 Thereto Relating to Exposure of Orders in the PCX Plus Crossing Mechanism, 58773-58774 [E5-5525]

Download as PDF Federal Register / Vol. 70, No. 194 / Friday, October 7, 2005 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52542; File No. SR–PCX– 2005–85] Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of Filing of Proposed Rule Change and Amendment Nos. 2 and 3 Thereto Relating to Exposure of Orders in the PCX Plus Crossing Mechanism September 30, 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 19, 2005, the Pacific Exchange, Inc. (‘‘PCX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the PCX. The PCX filed Amendment No. 1 to the proposed rule change on September 20, 2005 and withdrew Amendment No. 1 on September 22, 2005. The PCX filed Amendment No. 2 to the proposed rule change on September 23, 2005.3 The PCX filed Amendment No. 3 to the proposed rule change on September 27, 2005.4 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 PCX is proposing to decrease the exposure period in its Crossing Mechanism from 30 seconds to 10 seconds. Minor changes are also proposed to correct typographical errors in existing rule text. The text of the proposed rule change is available on the PCX’s Web site (https:// www.pacificex.com), at the PCX’s Office of the Secretary, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the PCX included statements concerning the purpose of, and basis for, the proposed 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 In Amendment No. 2, the PCX clarified its statement of the purpose of the proposed rule change, corrected certain terminology that was inadvertently used in the rule text set forth in the original proposal, and corrected typographical errors in the text of the current rule. 4 In Amendment No. 3, the PCX corrected Exhibit 4 to Amendment No. 2. 2 17 VerDate Aug<31>2005 18:27 Oct 06, 2005 Jkt 208001 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 PCX has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose PCX rules provide that a PCX Broker may not facilitate orders or cross two orders, using the Crossing Mechanism of the PCX Plus System (‘‘PCX Plus’’ or ‘‘System’’), unless it enters into the System the terms of each order that is to be included as part of a Cross Order,5 pursuant to PCX Rule 6.76(c)(2)(A). Both facilitation crosses and nonfacilitation crosses are executed in the same manner in PCX Plus. Upon entry into PCX Plus, the System will evaluate the terms of the Cross Order and, after accepting the Cross Order, will execute the cross in accordance with PCX Rule 6.76(c)(2)(B). Among other conditions, Rule 6.76(c)(2)(B) requires a 30-second exposure period in which OTP Holders and OTP Firms may enter orders to trade against the side of the Cross Order that has been designated as the Exposed Order.6 It is this portion of the Crossing Mechanism rule that the PCX proposes to change. The Exchange proposes to shorten the duration of the exposure period contained in the rules governing the Crossing Mechanism, as set forth in PCX Rule 6.76(c)(2)(B)(i)(a) and PCX Rule 6.76(c)(2)(B)(ii)(b),7 from 30 seconds to 10 seconds. This shortened exposure period is fully consistent with the electronic nature of the System. Market participants on the PCX have implemented systems that monitor any updates to the PCX market including any changes resulting from orders being 5 See PCX Rule 6.76(c)(1)(A), which defines Cross Order for the purposes of PCX Rule 6.76(c) as ‘‘two orders with instructions to match the identified buy-side with the identified sell-side at a specified price (the ‘‘Cross Price’’).’’ 6 See PCX Rule 6.76(c)(1)(D), which defines ‘‘Exposed Order’’ as follows: ‘‘the buy or sell side of a Cross Order that has been designated by a PCX Broker as the side to be exposed to the market and that is eligible for execution against all trading interest. Public Customer orders will always be deemed to be the Exposed Order in a Cross Order. In the case of a Cross Order involving a noncustomer on both the buy side and sell side, the PCX Broker must designate one side of the Cross Order as the Exposed Order.’’ 7 PCX Rules 6.76(c)(2)(B)(i) and 6.76(c)(2)(B)(ii) govern the execution of Cross Orders when the Cross Price is between the Best Bid and Offer (‘‘BBO’’) and when it is at the BBO, respectively. PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 58773 entered into the Crossing Mechanism and can automatically respond based upon pre-set parameters. In this electronic environment, it is not necessary to provide an exposure time sufficiently long to permit a person to manually respond to an updated market in order to provide the opportunity for crowd interaction. Thus, an exposure period of 10 seconds will permit exposure of orders on the PCX in a manner consistent with the Exchange’s electronic market. By reducing the exposure period from 30 seconds to 10 seconds the PCX believes that OTP Holders and OTP Firms will be able to provide liquidity to their customers’ orders on a timelier basis, thus providing investors with more speedy executions. Timely and accurate executions are consistent with the principles under which PCX Plus was developed. The PCX also proposes to change a phrase in the text in Rule 6.76(c)(2)(B)(i)(b) and Rule 6.76(c)(2)(B)(ii)(b) from ‘‘OTP Holder or OTP Firm’’ to ‘‘OTP Holders and OTP Firms’’. It has always been the intent of the PCX to have the pluralized version of the terms as part of the rules. 2. Statutory Basis The basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) 8 that an exchange have rules that are designed to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. In particular, the proposed rule change will provide investors with more timely execution of their options orders, while ensuring that there is an adequate exposure of all crossing orders in the PCX marketplace. B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The 8 15 E:\FR\FM\07OCN1.SGM U.S.C. 78f(b)(5). 07OCN1 58774 Federal Register / Vol. 70, No. 194 / Friday, October 7, 2005 / Notices Exchange has not received any unsolicited written comments from members or other interested parties. 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 PCX 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: Room. Copies of the filing also will 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 Number SR–PCX–2005–85 and should be submitted on or before October 28, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.9 Jonathan G. Katz, Secretary. [FR Doc. E5–5525 Filed 10–6–05; 8:45 am] BILLING CODE 8010–01–P SOCIAL SECURITY ADMINISTRATION Agency Information Collection Activities: Proposed Request and Comment Request The Social Security Administration (SSA) publishes a list of information collection packages that will require Electronic Comments clearance by the Office of Management • Use the Commission’s Internet and Budget (OMB) in compliance with comment form (https://www.sec.gov/ Public Law 104–13, the Paperwork rules/sro.shtml); or Reduction Act of 1995, effective October • Send an e-mail to rule1, 1995. The information collection comments@sec.gov. Please include File packages that may be included in this Number SR–PCX–2005–85 on the notice are for new information subject line. collections, approval of existing information collections, revisions to Paper Comments OMB-approved information collections, • Send paper comments in triplicate and extensions (no change) of OMBto Jonathan G. Katz, Secretary, approved information collections. Securities and Exchange Commission, SSA is soliciting comments on the 100 F Street, NE., Washington, DC accuracy of the agency’s burden 20549–9303. estimate; the need for the information; All submissions should refer to File its practical utility; ways to enhance its Number SR–PCX–2005–85. This file quality, utility, and clarity; and on ways number should be included on the to minimize burden on respondents, subject line if e-mail is used. To help the including the use of automated Commission process and review your collection techniques or other forms of comments more efficiently, please use information technology. Written only one method. The Commission will comments and recommendations post all comments on the Commission’s regarding the information collection(s) Internet Web site (https://www.sec.gov/ should be submitted to the OMB Desk rules/sro.shtml). Copies of the Officer and the SSA Reports Clearance submission, all subsequent Officer. The information can be mailed amendments, all written statements and/or faxed to the individuals at the with respect to the proposed rule addresses and fax numbers listed below: change that are filed with the (OMB), Office of Management and Commission, and all written Budget, Attn: Desk Officer for SSA, New communications relating to the Executive Building, Room 10235, 725 proposed rule change between the 17th St., NW., Washington, DC 20503, Commission and any person, other than Fax: 202–395–6974. those that may be withheld from the (SSA), Social Security public in accordance with the Administration, DCFAM, Attn: Reports provisions of 5 U.S.C. 552, will be Clearance Officer, 1333 Annex Building, available for inspection and copying in 9 17 CFR 200.30–3(a)(12). the Commission’s Public Reference VerDate Aug<31>2005 18:27 Oct 06, 2005 Jkt 208001 PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 6401 Security Blvd., Baltimore, MD 21235, Fax: 410–965–6400. I. The information collections listed below are pending at SSA and will be submitted to OMB within 60 days from the date of this notice. Therefore, your comments should be submitted to SSA within 60 days from the date of this publication. You can obtain copies of the collection instruments by calling the SSA Reports Clearance Officer at 410– 965–0454 or by writing to the address listed above. 1. Application for Mother’s or Father’s Insurance Benefits—20 CFR 404.339– 404.342, 20 CFR 404.601–404.603— 0960–0003. SSA collects the information on the SSA–5–F6 to entitle an individual to his/her mother’s and father’s insurance benefits. The respondents are individuals who apply for entitlement to their mothers’ or fathers’ benefits. Type of Request: Revision of an OMBapproved information collection. Number of Respondents: 50,000. Frequency of Response: 1. Average Burden Per Response: 15 minutes. Estimated Annual Burden: 12,500 hours. 2. Missing and Discrepant Wage Reports Letter and Questionnaire—26 CFR 31.6051–2—0960–0432. Each year employers report the wage amounts they paid their employees to IRS for tax purposes, and, separately, to SSA for retirement and disability coverage purposes. These amounts should be the same, however, each year many employer wage reports received by SSA are less than those reported to IRS. Through Forms SSA–L93, 95, and 97, SSA attempts to reconcile the amounts to ensure employees receive full credit. The respondents are employers who reported less wage amounts to SSA than they did to IRS. Type of Request: Extension of an OMB-approved information collection. Number of Respondents: 359,999. Frequency of Response: 1. Average Burden Per Response: 30 minutes. Estimated Annual Burden: 180,000 hours. 3. Information Collection Requirements for Title VIII of the Social Security Act—20 CFR 408.202(d), 408.210, 408.230(a), 408.232(a), 408.320, 408.305, 408.310, 408.315, 408.340, 408.345, 408.351(d) and (f), 408.355(a), 408.360(a), 408.404(c), 408.410, 408.412, 408.420(a) and (b), 408.430, 408.432, 408.435(a) and (b), 408.437(b), (c) and (d)—0960–0658. Section 251 of the ‘‘Foster Care Independence Act of 1999’’ added Title VIII to the Social Security Act (Special E:\FR\FM\07OCN1.SGM 07OCN1

Agencies

[Federal Register Volume 70, Number 194 (Friday, October 7, 2005)]
[Notices]
[Pages 58773-58774]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-5525]



[[Page 58773]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52542; File No. SR-PCX-2005-85]


Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of 
Filing of Proposed Rule Change and Amendment Nos. 2 and 3 Thereto 
Relating to Exposure of Orders in the PCX Plus Crossing Mechanism

September 30, 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 19, 2005, the Pacific Exchange, Inc. (``PCX'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II, and III below, which 
Items have been prepared by the PCX. The PCX filed Amendment No. 1 to 
the proposed rule change on September 20, 2005 and withdrew Amendment 
No. 1 on September 22, 2005. The PCX filed Amendment No. 2 to the 
proposed rule change on September 23, 2005.\3\ The PCX filed Amendment 
No. 3 to the proposed rule change on September 27, 2005.\4\ 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. 2, the PCX clarified its statement of the 
purpose of the proposed rule change, corrected certain terminology 
that was inadvertently used in the rule text set forth in the 
original proposal, and corrected typographical errors in the text of 
the current rule.
    \4\ In Amendment No. 3, the PCX corrected Exhibit 4 to Amendment 
No. 2.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The PCX is proposing to decrease the exposure period in its 
Crossing Mechanism from 30 seconds to 10 seconds. Minor changes are 
also proposed to correct typographical errors in existing rule text. 
The text of the proposed rule change is available on the PCX's Web site 
(https://www.pacificex.com), at the PCX's Office of the Secretary, and 
at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the PCX included statements 
concerning the purpose of, and basis for, 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 PCX has prepared summaries, set forth in Sections A, 
B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    PCX rules provide that a PCX Broker may not facilitate orders or 
cross two orders, using the Crossing Mechanism of the PCX Plus System 
(``PCX Plus'' or ``System''), unless it enters into the System the 
terms of each order that is to be included as part of a Cross Order,\5\ 
pursuant to PCX Rule 6.76(c)(2)(A). Both facilitation crosses and non-
facilitation crosses are executed in the same manner in PCX Plus. Upon 
entry into PCX Plus, the System will evaluate the terms of the Cross 
Order and, after accepting the Cross Order, will execute the cross in 
accordance with PCX Rule 6.76(c)(2)(B). Among other conditions, Rule 
6.76(c)(2)(B) requires a 30-second exposure period in which OTP Holders 
and OTP Firms may enter orders to trade against the side of the Cross 
Order that has been designated as the Exposed Order.\6\ It is this 
portion of the Crossing Mechanism rule that the PCX proposes to change.
---------------------------------------------------------------------------

    \5\ See PCX Rule 6.76(c)(1)(A), which defines Cross Order for 
the purposes of PCX Rule 6.76(c) as ``two orders with instructions 
to match the identified buy-side with the identified sell-side at a 
specified price (the ``Cross Price'').''
    \6\ See PCX Rule 6.76(c)(1)(D), which defines ``Exposed Order'' 
as follows: ``the buy or sell side of a Cross Order that has been 
designated by a PCX Broker as the side to be exposed to the market 
and that is eligible for execution against all trading interest. 
Public Customer orders will always be deemed to be the Exposed Order 
in a Cross Order. In the case of a Cross Order involving a non-
customer on both the buy side and sell side, the PCX Broker must 
designate one side of the Cross Order as the Exposed Order.''
---------------------------------------------------------------------------

    The Exchange proposes to shorten the duration of the exposure 
period contained in the rules governing the Crossing Mechanism, as set 
forth in PCX Rule 6.76(c)(2)(B)(i)(a) and PCX Rule 
6.76(c)(2)(B)(ii)(b),\7\ from 30 seconds to 10 seconds. This shortened 
exposure period is fully consistent with the electronic nature of the 
System. Market participants on the PCX have implemented systems that 
monitor any updates to the PCX market including any changes resulting 
from orders being entered into the Crossing Mechanism and can 
automatically respond based upon pre-set parameters. In this electronic 
environment, it is not necessary to provide an exposure time 
sufficiently long to permit a person to manually respond to an updated 
market in order to provide the opportunity for crowd interaction. Thus, 
an exposure period of 10 seconds will permit exposure of orders on the 
PCX in a manner consistent with the Exchange's electronic market.
---------------------------------------------------------------------------

    \7\ PCX Rules 6.76(c)(2)(B)(i) and 6.76(c)(2)(B)(ii) govern the 
execution of Cross Orders when the Cross Price is between the Best 
Bid and Offer (``BBO'') and when it is at the BBO, respectively.
---------------------------------------------------------------------------

    By reducing the exposure period from 30 seconds to 10 seconds the 
PCX believes that OTP Holders and OTP Firms will be able to provide 
liquidity to their customers' orders on a timelier basis, thus 
providing investors with more speedy executions. Timely and accurate 
executions are consistent with the principles under which PCX Plus was 
developed.
    The PCX also proposes to change a phrase in the text in Rule 
6.76(c)(2)(B)(i)(b) and Rule 6.76(c)(2)(B)(ii)(b) from ``OTP Holder or 
OTP Firm'' to ``OTP Holders and OTP Firms''. It has always been the 
intent of the PCX to have the pluralized version of the terms as part 
of the rules.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \8\ that an exchange have rules that 
are designed to foster cooperation and coordination with persons 
engaged in regulating, clearing, settling, processing information with 
respect to, and facilitating transactions in securities, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and, in general, to protect investors and the 
public interest. In particular, the proposed rule change will provide 
investors with more timely execution of their options orders, while 
ensuring that there is an adequate exposure of all crossing orders in 
the PCX marketplace.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    The proposed rule change does not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The

[[Page 58774]]

Exchange has not received any unsolicited written comments from members 
or other interested parties.

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 PCX 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-2005-85 on the subject line.

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 Number SR-PCX-2005-85. 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 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 Number SR-PCX-2005-85 and should be submitted on or before October 
28, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jonathan G. Katz,
Secretary.
 [FR Doc. E5-5525 Filed 10-6-05; 8:45 am]
BILLING CODE 8010-01-P
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