Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendments Nos. 1 and 2 Thereto Regarding Clearly Erroneous Executions, 70015-70017 [E5-6374]
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Federal Register / Vol. 70, No. 222 / Friday, November 18, 2005 / Notices
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend its Minor Rule Violation Plan
(‘‘MRVP’’) to include NYSE Rule 103.12,
which requires specialists and specialist
organizations to record and report the
actual time spent working as a specialist
or clerk while on the trading floor of the
Exchange. The proposed rule change
was published for comment in the
Federal Register on October 7, 2005.3
The Commission received no comments
regarding the proposal.
The Commission finds that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to a national securities
exchange.4 In particular, the
Commission believes that the proposal
is consistent with Section 6(b)(5) of the
Act,5 because a rule that is reasonably
designed to encourage specialists and
clerks to report accurately the time they
work on the trading floor should help
the Exchange carry out its supervisory
responsibilities and thereby help protect
investors and the public interest. The
Commission also believes that handling
violations of NYSE Rule 103.12
pursuant to the MRVP is consistent with
Sections 6(b)(1) and 6(b)(6) of the Act,6
which require that the rules of an
exchange enforce compliance with, and
provide appropriate discipline for,
violations of Commission and Exchange
rules. In addition, because existing
NYSE Rule 476A provides procedural
rights to a person fined under the MRVP
to contest the fine and permits a hearing
on the matter, the Commission believes
the MRVP, as amended by this proposal,
provides a fair procedure for the
disciplining of members and persons
associated with members, consistent
with Sections 6(b)(7) and 6(d)(1) of the
Act.7
Finally, the Commission finds that the
proposal is consistent with the public
interest, the protection of investors, or
otherwise in furtherance of the purposes
of the Act, as required by Rule 19d–
1(c)(2) under the Act 8 which governs
minor rule violation plans. The
Commission believes that the change to
the MRVP will strengthen its ability to
carry out its oversight and enforcement
responsibilities as a self-regulatory
organization in cases where full
disciplinary proceedings are unsuitable
in view of the minor nature of the
particular violation.
In approving this proposed rule
change, the Commission in no way
minimizes the importance of
compliance with NYSE rules and all
other rules subject to the imposition of
fines under the MRVP. The Commission
believes that the violation of any selfregulatory organization’s rules, as well
as Commission rules, is a serious matter.
However, the MRVP provides a
reasonable means of addressing rule
violations that do not rise to the level of
requiring formal disciplinary
proceedings, while providing greater
flexibility in handling certain violations.
The Commission expects that NYSE will
continue to conduct surveillance with
due diligence and make a determination
based on its findings, on a case-by-case
basis, whether a fine of more or less
than the recommended amount is
appropriate for a violation under the
MRVP or whether a violation requires
formal disciplinary action under NYSE
Rule 476.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act 9 and Rule
19d–1(c)(2) under the Act,10 that the
proposed rule change (SR–NYSE–2005–
64) be, and hereby is, approved and
declared effective.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Jonathan G. Katz,
Secretary.
[FR Doc. E5–6378 Filed 11–17–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52769; File No. SR–PCX–
2005–119]
Self-Regulatory Organizations; Pacific
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change and Amendments Nos. 1
and 2 Thereto Regarding Clearly
Erroneous Executions
November 10, 2005.
1 15
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 52550
(October 3, 2005), 70 FR 58770.
4 In approving this proposed rule change, the
Commission notes that it has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
5 15 U.S.C. 78f(b)(5).
6 15 U.S.C. 78f(b)(1) and 78f(b)(6).
7 15 U.S.C. 78f(b)(7) and 78f(d)(1).
8 17 CFR 240.19d–1(c)(2).
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15:21 Nov 17, 2005
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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 October
9 15
U.S.C. 78s(b)(2).
CFR 240.19d–1(c)(2).
11 17 CFR 200.30–3(a)(12); 17 CFR 200.30–
3(a)(44).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
10 17
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70015
24, 2005, the Pacific Exchange, Inc.
(‘‘PCX’’ or ‘‘Exchange’’), through its
wholly owned subsidiary, PCX Equities,
Inc. (‘‘PCXE’’), 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 PCX. On October 27, 2005,
the Exchange submitted Amendment
No. 1 to the proposed rule change.3 On
November 9, 2005, the Exchange
submitted Amendment No. 2 to the
proposed rule change.4 The Exchange
filed the proposed rule change as a
‘‘non-controversial’’ rule change under
Rule 19b–4(f)(6) under the Act,5 which
renders the proposal effective upon
filing with the Commission.6 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, through PCXE, proposes to
amend its rules governing the
Archipelago Exchange, the equities
trading facility of PCXE. This filing
proposes to amend PCXE Rule 7.10
regarding clearly erroneous executions.
Below is the text of the proposed rule
change. Proposed new language is in
italics; proposed deletions are in
[brackets].
*
*
*
*
*
Rules of PCX Equities, Inc.
Rule 7
Equities Trading
Rule 7.10. Clearly Erroneous
Executions
(a)–(b) No change.
(c) Review Procedures.
(1) No change.
(2) If [a party] an ETP Holder affected
by a determination made under this
Rule so requests within the time
permitted below, the Clearly Erroneous
Execution Panel (‘‘CEE Panel’’) will
review decisions made by the Officer
under this Rule, including whether a
clearly erroneous execution occurred
and whether the correct adjustment was
made; provided however that the CEE
Panel will not review decisions made by
3 Amendment No. 1 properly identified proposed
rule text that had not been indicated as new text
in the original filing.
4 Amendment No. 2 corrected minor
typographical errors and properly indentified
changes being made to existing rule text.
5 17 CFR 240.19b–4(f)(6).
6 For purposes of calculating the 60-day period
within which the Commission may summarily
abrogate the proposal, the Commission considers
the period to commence on November 9, 2005, the
date on which the Exchange submitted Amendment
No. 2. See 15 U.S.C. 78s(b)(3)(C).
E:\FR\FM\18NON1.SGM
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70016
Federal Register / Vol. 70, No. 222 / Friday, November 18, 2005 / Notices
an officer under subsection (d) of this
Rule if such Officer also determines
under subsection (d) of this Rule that
the number of the affected transactions
is such that immediate finality is
necessary to maintain a fair and orderly
market and to protect investors and the
public interest.
(A)–(B) No change.
(3)–(4) No change.
(d) System Disruption and
Malfunctions. In the event of any
disruption or a malfunction in the use
or operation of any electronic
communications and trading facilities of
the PCXE, or extraordinary market
conditions or other circumstances in
which the nullification or modification
of transactions may be necessary for the
maintenance of a fair and orderly
market or the protection of investors
and the public interest exist, the Officer,
on his or her own motion, may review
such transactions and declare such
transactions arising out of the use or
operation of such facilities during such
period null and void or modify the
terms of these transactions if the Officer
determines that the transaction(s) is
clearly erroneous, or that such actions
are necessary for the maintenance of a
fair and orderly market or for the
protection of investors and the public
interest. Absent extraordinary
circumstances, any such action of the
Officer pursuant to this subsection (d)
shall be taken within thirty (30) minutes
of detection of the erroneous
transaction. Each ETP Holder involved
in the transaction shall be notified as
soon as practicable, and the ETP Holder
aggrieved by the action may appeal such
action in accordance with the
provisions of subsection (c)(2)–(4).
(e) No change.
*
*
*
*
*
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 PCX has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
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15:21 Nov 17, 2005
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, Proposed Rule
Change
1. Purpose
Currently, PCXE Rule 7.10 sets forth
procedures for PCXE when the terms of
a transaction executed on PCXE are
clearly erroneous. PCXE Rule 7.10
provides for PCXE review procedures,
an appeal process and various
procedures with respect to system
disruption and malfunction and trade
nullification and price adjustments for
unlisted trading privileges securities
that are subject to an initial public
offering.
At this time, the Exchange proposes to
amend PCXE Rule 7.10 with respect to
the appeal procedures. Currently, PCXE
Rule 7.10(c)(2) provides that if a party
affected by a determination made under
this Rule so requests within the time
permitted, the Clearly Erroneous
Execution Panel (‘‘CEE Panel’’) will
review decisions made by an officer of
PCXE under this rule, including
whether a clearly erroneous execution
occurred and whether the correct
adjustment was made. The Exchange
proposes to modify this provision to
provide that the CEE Panel will not
review decisions made by a PCXE
officer under this rule in the event of
any disruption or a malfunction in the
use or operation of any electronic
communications and trading facilities of
the PCXE, or extraordinary market
conditions or other circumstances,
when the officer making the
determination also determines on his or
her own motion that it is necessary to
nullify or modify clearly erroneous
transactions because the number of the
affected transactions is such that
immediate finality is necessary to
maintain a fair and orderly market and
to protect investors and the public
interest. PCXE also proposes to amend
subsection (d) of PCXE Rule 7.10 to state
that PCXE’s authority may be exercised
in the event of extraordinary market
conditions or other circumstances in
which the PCXE officer determines that
the nullification or modification of
transactions may be necessary for the
maintenance of a fair and orderly
market or the protection of investors
and the public interest. PCXE believes
that in such circumstances review(s) by
the CEE Panel(s) of large numbers of
trades would be impractical and could
expose market participants to
unacceptable levels of risk. PCXE
expects that the amended rule would be
used only on rare occasions and
primarily in circumstances where the
disruption or malfunction of a system
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Fmt 4703
Sfmt 4703
resulted in the execution of large
numbers of trades with obvious errors,
such as prices substantially unrelated to
the inside market.7 According to the
Exchange, with this rule change, it
would be able to keep the markets
orderly during such times when finality
of trade rulings is necessary. The
Exchange notes that this rule proposal is
based on the National Association of
Securities Dealers’ (‘‘NASD’’) Rule
11890(c)(l).
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
section 6(b) of the Act 8 in general, and
furthers the objectives of section 6(b)(5)
of the Act 9 in particular, because it is
designed to promote just and equitable
principles of trade, 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 to protect investors
and the public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The PCX does not believe that the
proposed rule change will impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The PCX neither solicited nor
received written comments on the
proposed rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change: (i)
Does not significantly affect the
protection of investors or the public
interest; (ii) does not impose any
significant burden on competition; and
(iii) by its terms, does not become
operative for 30 days after the date of
filing, the proposed rule change has
become effective pursuant to section
19(b)(3)(A) of the Act 10 and
7 For example, PCX believes that if an erroneously
priced order or quote causes a large number of
transactions to occur at prices far in excess of a
security’s true value and if a decision is made to
break all of the affected trades, some sellers may
appeal the decision to break the trades. If a market
participant is a party to trades on both sides of the
market, and some remain broken while others are
appealed and reinstated, it will suffer losses that
arise solely from the inconsistent treatment of its
trades.
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
10 15 U.S.C. 78s(b)(3)(A).
E:\FR\FM\18NON1.SGM
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Federal Register / Vol. 70, No. 222 / Friday, November 18, 2005 / Notices
subparagraph (f)(6) of Rule 19b–4
thereunder.11 As required under Rule
19b–4(f)(6)(iii),12 the Exchange provided
the Commission with written notice of
its intent to file the proposed rule
change, along with a brief description
and text of the proposed rule change, at
least five business days prior to the date
of the filing of the proposed rule change.
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in the furtherance of the
purposes of the Act.13
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–2005–119 on the
subject line.
the Commission’s Public Reference
Section. Copies of such 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–2005–119 and should
be submitted on or before December 9,
2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
Jonathan G. Katz,
Secretary.
[FR Doc. E5–6374 Filed 11–17–05; 8:45 am]
BILLING CODE 8010–01–P
DEPARTMENT OF STATE
[Public Notice 5231]
Bureau of Educational and Cultural
Affairs (ECA) Request for Grant
Proposals: Summer Language Institute
for American Youth
Announcement Type: New Grant.
Funding Opportunity Number: ECA/
PE/C/PY–06–16.
Catalog of Federal Domestic
Assistance Number: 00.000.
Paper Comments
Key Dates:
Application Deadline: January 18,
• Send paper comments in triplicate
2006.
to Jonathan G. Katz, Secretary,
Executive Summary: The Youth
Securities and Exchange Commission,
Programs Division, Office of Citizen
100 F Street, NE., Washington, DC
Exchanges of the Bureau of Educational
20549–9309.
and Cultural Affairs, announces an open
All submissions should refer to File
competition for projects to provide
Number SR–PCX–2005–119. This file
Arabic or Chinese language instruction
number should be included on the
subject line if e-mail is used. To help the overseas for American high school
students in Summer 2006. Public and
Commission process and review your
private non-profit organizations meeting
comments more efficiently, please use
only one method. The Commission will the provisions described in Internal
post all comments on the Commission’s Revenue Code section 26 U.S.C.
501(c)(3) may submit proposals to
Internet Web site (https://www.sec.gov/
implement six-to eight-week summer
rules/sro.shtml). Copies of the
institutes in an Arabic-speaking country
submission, all subsequent
and/or a Chinese-speaking country
amendments, all written statements
(hereafter referred to as China and
with respect to the proposed rule
understood to include mainland China
change that are filed with the
and Taiwan as training sites) for U.S.
Commission, and all written
students aged 15 to 18 to have both
communications relating to the
formal and informal Arabic or Chinese
proposed rule change between the
Commission and any person, other than language instruction through a
comprehensive exchange experience.
those that may be withheld from the
ECA plans to award one or two grants
public in accordance with the
for either an Arabic Institute or a
provisions of 5 U.S.C. 552, will be
Chinese Institute, or both. Applicants
available for inspection and copying in
may apply to implement institutes in
11 17 CFR 240.19b–4(f)(6).
one or both languages.
12 17
CFR 240.19b–4(f)(6)(iii).
supra note 6.
13 See
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15:21 Nov 17, 2005
14 17
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CFR 200.30–3(a)(12).
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70017
I. Funding Opportunity Description
Authority
Overall grant making authority for
this program is contained in the Mutual
Educational and Cultural Exchange Act
of 1961, Public Law 87–256, as
amended, also known as the FulbrightHays Act. The purpose of the Act is ‘‘to
enable the Government of the United
States to increase mutual understanding
between the people of the United States
and the people of other countries * * *;
to strengthen the ties that unite us with
other nations by demonstrating the
educational and cultural interests,
developments, and achievements of the
people of the United States and other
nations * * * and thus to assist in the
development of friendly, sympathetic
and peaceful relations between the
United States and the other countries of
the world.’’ The funding authority for
the program above is provided through
legislation.
Purpose
The Bureau of Educational and
Cultural Affairs (ECA) is supporting the
participation of youth in intensive,
substantive educational experiences that
will promote language learning as well
as engage the successor generation in a
dialogue for greater understanding.
Promoting the study of critical
languages among American youth is a
vital element of America’s security in
the post-9/11 world, as well as
promoting mutual understanding and
respect between the people of the
United States and the citizens of
strategically important countries around
the world.
The goals of the Summer Language
Institute for American Youth are:
• To improve the ability of Americans
to engage with the people of Arabic or
Chinese-speaking countries through the
shared language of the partner country;
• To develop a cadre of Americans
with advanced linguistic skills and
cultural understanding who are able to
advance the international dialogue,
promote the security of the United
States, and compete effectively in the
global economy;
• To provide a tangible incentive for
the learning and use of foreign
languages.
In order to achieve these goals, the
Bureau is offering the opportunity for
American secondary school students to
gain basic to intermediate skills in the
Arabic language or the Chinese
language. ECA plans to award one or
two grants for either an Arabic Institute
or a Chinese Institute, or both.
Applicants may apply to implement
institutes in one or both languages. The
E:\FR\FM\18NON1.SGM
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]]>Agencies
[Federal Register Volume 70, Number 222 (Friday, November 18, 2005)]
[Notices]
[Pages 70015-70017]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-6374]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52769; File No. SR-PCX-2005-119]
Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change and
Amendments Nos. 1 and 2 Thereto Regarding Clearly Erroneous Executions
November 10, 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 October 24, 2005, the Pacific Exchange, Inc. (``PCX'' or
``Exchange''), through its wholly owned subsidiary, PCX Equities, Inc.
(``PCXE''), 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 PCX. On October 27,
2005, the Exchange submitted Amendment No. 1 to the proposed rule
change.\3\ On November 9, 2005, the Exchange submitted Amendment No. 2
to the proposed rule change.\4\ The Exchange filed the proposed rule
change as a ``non-controversial'' rule change under Rule 19b-4(f)(6)
under the Act,\5\ which renders the proposal effective upon filing with
the Commission.\6\ 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\ Amendment No. 1 properly identified proposed rule text that
had not been indicated as new text in the original filing.
\4\ Amendment No. 2 corrected minor typographical errors and
properly indentified changes being made to existing rule text.
\5\ 17 CFR 240.19b-4(f)(6).
\6\ For purposes of calculating the 60-day period within which
the Commission may summarily abrogate the proposal, the Commission
considers the period to commence on November 9, 2005, the date on
which the Exchange submitted Amendment No. 2. See 15 U.S.C.
78s(b)(3)(C).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The PCX, through PCXE, proposes to amend its rules governing the
Archipelago Exchange, the equities trading facility of PCXE. This
filing proposes to amend PCXE Rule 7.10 regarding clearly erroneous
executions. Below is the text of the proposed rule change. Proposed new
language is in italics; proposed deletions are in [brackets].
* * * * *
Rules of PCX Equities, Inc.
Rule 7 Equities Trading
Rule 7.10. Clearly Erroneous Executions
(a)-(b) No change.
(c) Review Procedures.
(1) No change.
(2) If [a party] an ETP Holder affected by a determination made
under this Rule so requests within the time permitted below, the
Clearly Erroneous Execution Panel (``CEE Panel'') will review decisions
made by the Officer under this Rule, including whether a clearly
erroneous execution occurred and whether the correct adjustment was
made; provided however that the CEE Panel will not review decisions
made by
[[Page 70016]]
an officer under subsection (d) of this Rule if such Officer also
determines under subsection (d) of this Rule that the number of the
affected transactions is such that immediate finality is necessary to
maintain a fair and orderly market and to protect investors and the
public interest.
(A)-(B) No change.
(3)-(4) No change.
(d) System Disruption and Malfunctions. In the event of any
disruption or a malfunction in the use or operation of any electronic
communications and trading facilities of the PCXE, or extraordinary
market conditions or other circumstances in which the nullification or
modification of transactions may be necessary for the maintenance of a
fair and orderly market or the protection of investors and the public
interest exist, the Officer, on his or her own motion, may review such
transactions and declare such transactions arising out of the use or
operation of such facilities during such period null and void or modify
the terms of these transactions if the Officer determines that the
transaction(s) is clearly erroneous, or that such actions are necessary
for the maintenance of a fair and orderly market or for the protection
of investors and the public interest. Absent extraordinary
circumstances, any such action of the Officer pursuant to this
subsection (d) shall be taken within thirty (30) minutes of detection
of the erroneous transaction. Each ETP Holder involved in the
transaction shall be notified as soon as practicable, and the ETP
Holder aggrieved by the action may appeal such action in accordance
with the provisions of subsection (c)(2)-(4).
(e) No change.
* * * * *
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 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, Proposed Rule Change
1. Purpose
Currently, PCXE Rule 7.10 sets forth procedures for PCXE when the
terms of a transaction executed on PCXE are clearly erroneous. PCXE
Rule 7.10 provides for PCXE review procedures, an appeal process and
various procedures with respect to system disruption and malfunction
and trade nullification and price adjustments for unlisted trading
privileges securities that are subject to an initial public offering.
At this time, the Exchange proposes to amend PCXE Rule 7.10 with
respect to the appeal procedures. Currently, PCXE Rule 7.10(c)(2)
provides that if a party affected by a determination made under this
Rule so requests within the time permitted, the Clearly Erroneous
Execution Panel (``CEE Panel'') will review decisions made by an
officer of PCXE under this rule, including whether a clearly erroneous
execution occurred and whether the correct adjustment was made. The
Exchange proposes to modify this provision to provide that the CEE
Panel will not review decisions made by a PCXE officer under this rule
in the event of any disruption or a malfunction in the use or operation
of any electronic communications and trading facilities of the PCXE, or
extraordinary market conditions or other circumstances, when the
officer making the determination also determines on his or her own
motion that it is necessary to nullify or modify clearly erroneous
transactions because the number of the affected transactions is such
that immediate finality is necessary to maintain a fair and orderly
market and to protect investors and the public interest. PCXE also
proposes to amend subsection (d) of PCXE Rule 7.10 to state that PCXE's
authority may be exercised in the event of extraordinary market
conditions or other circumstances in which the PCXE officer determines
that the nullification or modification of transactions may be necessary
for the maintenance of a fair and orderly market or the protection of
investors and the public interest. PCXE believes that in such
circumstances review(s) by the CEE Panel(s) of large numbers of trades
would be impractical and could expose market participants to
unacceptable levels of risk. PCXE expects that the amended rule would
be used only on rare occasions and primarily in circumstances where the
disruption or malfunction of a system resulted in the execution of
large numbers of trades with obvious errors, such as prices
substantially unrelated to the inside market.\7\ According to the
Exchange, with this rule change, it would be able to keep the markets
orderly during such times when finality of trade rulings is necessary.
The Exchange notes that this rule proposal is based on the National
Association of Securities Dealers' (``NASD'') Rule 11890(c)(l).
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\7\ For example, PCX believes that if an erroneously priced
order or quote causes a large number of transactions to occur at
prices far in excess of a security's true value and if a decision is
made to break all of the affected trades, some sellers may appeal
the decision to break the trades. If a market participant is a party
to trades on both sides of the market, and some remain broken while
others are appealed and reinstated, it will suffer losses that arise
solely from the inconsistent treatment of its trades.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b) of the Act \8\ in general, and furthers the
objectives of section 6(b)(5) of the Act \9\ in particular, because it
is designed to promote just and equitable principles of trade, 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 to protect
investors and the public interest.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The PCX does not believe that the proposed rule change will impose
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The PCX neither solicited nor received written comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change: (i) Does not significantly affect
the protection of investors or the public interest; (ii) does not
impose any significant burden on competition; and (iii) by its terms,
does not become operative for 30 days after the date of filing, the
proposed rule change has become effective pursuant to section
19(b)(3)(A) of the Act \10\ and
[[Page 70017]]
subparagraph (f)(6) of Rule 19b-4 thereunder.\11\ As required under
Rule 19b-4(f)(6)(iii),\12\ the Exchange provided the Commission with
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at least
five business days prior to the date of the filing of the proposed rule
change.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in the furtherance of the purposes of the Act.\13\
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\13\ See supra note 6.
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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-2005-119 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 20549-9309.
All submissions should refer to File Number SR-PCX-2005-119. 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. Copies of such
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-2005-119 and should be submitted on or before
December 9, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
Jonathan G. Katz,
Secretary.
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\14\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E5-6374 Filed 11-17-05; 8:45 am]
BILLING CODE 8010-01-P
