Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Relating to Listing Standards for Investment Company Units and Dissemination of Intraday Optimized Portfolio Value, 71590-71591 [E5-6619]

Download as PDF 71590 Federal Register / Vol. 70, No. 228 / Tuesday, November 29, 2005 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52809; File No. SR–PCX– 2005–108] Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Relating to Listing Standards for Investment Company Units and Dissemination of Intraday Optimized Portfolio Value November 18, 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 September 26, 2005, the Pacific Exchange, Inc. (‘‘PCX’’ or ‘‘Exchange’’), through its wholly owned subsidiary PCX Equities, Inc. (‘‘PCXE’’ or ‘‘Corporation’’), filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposal from interested persons and also approving the proposal on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange, through its whollyowned subsidiary PCXE, proposes to amend its rules governing the Archipelago Exchange (‘‘ArcaEx’’), the equities trading facility of PCXE. With this filing, the Exchange proposes to amend its listing standards for Investment Company Units (‘‘ICUs’’) to provide that PCXE may approve a series of ICUs for trading if one or more major market data vendors disseminates for each series of ICUs listed on ArcaEx an estimate of the value of a share of each series of ICUs, sometimes referred to as the Intraday Optimized Portfolio Value (‘‘IOPV’’), at least every 15 seconds during the time these ICUs trade on ArcaEx. The text of the proposed rule change is available on the Exchange’s Internet Web site (http:// 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 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Aug<31>2005 20:13 Nov 28, 2005 Jkt 208001 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 III 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 PCXE Rule 5.2(j)(3), Commentary .01, provides listing standards for ICUs to permit listing and trading of these securities pursuant to Rule 19b–4(e) under the Act.3 Rule 19b–4(e) provides that the listing and trading of a new derivative securities product by a selfregulatory organization (‘‘SRO’’) shall not be deemed a proposed rule change, pursuant to paragraph (c)(1) of Rule 19b–4, if the Commission has approved, pursuant to Section 19(b) of the Act, the SRO’s trading rules, procedures and listing standards for the product class that would include the new derivative securities product, and the SRO has a surveillance program for the product class.4 The Exchange rules for ICUs currently provide that the Reporting Authority 5 will disseminate for each series of ICUs (in the case of PCXE Rule 5.2(j)(3)) an estimate, updated every 15 seconds, of the value of a share of the series. The IOPV may be based, for example, upon current information regarding the required deposit of securities and cash amount to permit creation of new shares of the series or upon the index value.6 3 17 CFR 240.19b–4(e). Securities Exchange Act Release No. 40761 (December 8, 1998), 63 FR 70952 (December 22, 1998). 5 PCXE Rule 5.1(b)(16) provides that the term ‘‘Reporting Authority’’ in respect of a particular series of ICUs means the Corporation, a subsidiary of the Corporation, or an institution or reporting service designated by the Corporation or its subsidiary as the official source for calculating and reporting information relating to such series, including, but not limited to, any current index or portfolio value; the current value of the portfolio of any securities required to be deposited in connection with issuance of ICUs; the amount of any dividend equivalent payment or cash distribution to holders of ICUs, net asset value, or other information relating to the issuance, redemption or trading of ICUs. The rule further states that: (i) Nothing in PCXE Rule 5.2(j)(3) implies that an institution or reporting service that is the source for calculating and reporting information relating to ICUs must be designated by the Corporation and (ii) the term ‘‘Reporting Authority’’ shall not refer to an institution or reporting service not so designated. 6 PCXE Rule 5.2(j)(3), Commentary .01(c). 4 See PO 00000 Frm 00132 Fmt 4703 Sfmt 4703 The Exchange believes that, rather than identifying specifically in its rules the Reporting Authority as the dissemination service, it is preferable to reflect in the rules a requirement for wide dissemination of the IOPV. This proposed rule change would make clear that the IOPV must be widely disseminated by a reputable dissemination service, such as the Consolidated Tape Association, Reuters, or Bloomberg. The Exchange believes that naming the Reporting Authority as the dissemination service is not necessary and that the purpose of the rule would be achieved as long as the service used for dissemination is reputable, accepted in the investment community, and effects appropriately wide dissemination of the IOPV relating to a particular series of ICUs. The Exchange therefore proposes to change the listing standards for ICUs to provide that PCXE may approve a series of ICUs for trading if one or more major market data vendors disseminates for each series of ICUs listed on ArcaEx the IOPV every 15 seconds during the time that these ICUs trade on ArcaEx. 2. 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, 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 and perfect the mechanisms 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 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. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule 7 15 8 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). E:\FR\FM\29NON1.SGM 29NON1 Federal Register / Vol. 70, No. 228 / Tuesday, November 29, 2005 / Notices change is consistent with the Act. Comments may be submitted by any of the following methods: particular, the Commission believes that the proposed rule change is consistent with Section 6(b)(5) of the Act,10 which requires, among other things, that the Electronic Comments rules of the Exchange be designed to • Use the Commission’s Internet promote just and equitable principles of comment form (http://www.sec.gov/ trade, to remove impediments to and rules/sro.shtml); or perfect the mechanism of a free and • Send an e-mail to ruleopen market and a national market comments@sec.gov. Please include File system, and, in general, to protect Number SR–PCX–2005–108 on the investors and the public interest. subject line. Under the proposed rule change, the Paper Comments Exchange would modify its ‘‘generic’’ • Send paper comments in triplicate listing standards under PCXE Rule to Jonathan G. Katz, Secretary, 5.2(j)(3) applicable to ICUs to remove Securities and Exchange Commission, the requirement that the Reporting 100 F Street NE., Washington, DC Authority disseminate estimated values 20549–9303. for each series every 15 seconds. All submissions should refer to File Instead, the proposal would impose a Number SR–PCX–2005–108. This file requirement to have one or more major number should be included on the subject line if e-mail is used. To help the market vendors to disseminate such information during the time that ICUs Commission process and review your trade on ArcaEx. For the purposes of comments more efficiently, please use only one method. The Commission will this rule, the Exchange notes that its post all comments on the Commission’s definition of major market data vendor Internet Web site (http://www.sec.gov/ includes the Consolidated Tape and rules/sro.shtml). Copies of the services such as Reuters and Bloomberg. submission, all subsequent The Exchange has requested that the amendments, all written statements Commission find good cause for with respect to the proposed rule approving the proposed rule change change that are filed with the prior to the thirtieth day after Commission, and all written publication of notice thereof in the communications relating to the Federal Register. The Commission notes proposed rule change between the Commission and any person, other than that it previously approved a similar rule change for the New York Stock those that may be withheld from the Exchange, Inc. (‘‘NYSE’’).11 public in accordance with the provisions of 5 U.S.C. 552, will be The Commission believes that available for inspection and copying in granting accelerated approval of the the Commission’s Public Reference proposal will allow the Exchange to Room. Copies of such filing also will be implement, without undue delay, these available for inspection and copying at listing standards for dissemination of the principal offices of the Exchange. the estimated values for ICUs. All comments received will be posted Accordingly, the Commission finds without change; the Commission does good cause, pursuant to Section 19(b)(2) not edit personal identifying of the Act,12 for approving this proposal information from submissions. You before the thirtieth day after the should submit only information that you wish to make available publicly. All publication of notice thereof in the Federal Register. submissions should refer to File Number SR–PCX–2005–108 and should V. Conclusion be submitted on or before December 20, It is therefore ordered, pursuant to 2005. Section 19(b)(2) of the Act,13 that the IV. Commission’s Findings and Order proposed rule change (SR–PCX–2005– Granting Accelerated Approval of 108) is hereby approved on an Proposed Rule Change accelerated basis. After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to 10 15 U.S.C. 78f(b)(5). a national securities exchange.9 In 11 9 In approving this proposed rule change, the Commission has considered its impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Aug<31>2005 20:13 Nov 28, 2005 Jkt 208001 See Securities Exchange Act Release No. 52081 (July 20, 2005), 70 FR 43488 (July 27, 2005) (SR– NYSE–2005–44). 12 15 U.S.C. 78s(b)(2). 13 15 U.S.C. 78s(b)(2). PO 00000 Frm 00133 Fmt 4703 Sfmt 4703 71591 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.14 Jonathan G. Katz, Secretary. [FR Doc. E5–6619 Filed 11–28–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52814; File No. SR–PCX– 2005–85] Self-Regulatory Organizations; Pacific Exchange, Inc.; Order Approving Proposed Rule Change and Amendment Nos. 2 and 3 Thereto Relating to Exposure of Orders in the PCX Plus Crossing Mechanism November 21, 2005. On July 19, 2005, the Pacific Exchange, Inc. (‘‘PCX’’ or ‘‘Exchange’’), filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 to reduce the exposure period in the Crossing Mechanism of the PCX Plus System from 30 seconds to 10 seconds. The PCX filed Amendment No. 1 to the proposed rule change on September 20, 2005 and subsequently withdrew Amendment No. 1. The PCX filed Amendment Nos. 2 and 3 to the proposed rule change on September 23, 2005 and September 27, 2005, respectively. The proposed rule change, as amended, was published for comment in the Federal Register on October 7, 2005.3 The Commission received no comments on the proposal. After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of Section 6(b) of the Act 4 and the rules and regulations thereunder applicable to a national securities exchange,5 and in particular with Section 6(b)(5) of the Act.6 The Commission believes that, in the electronic environment of PCX Plus, reducing the exposure period to 10 seconds could facilitate the prompt execution of orders, while providing participants in the PCX Plus System 14 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 52542 (September 30, 2005), 70 FR 58773. 4 15 U.S.C. 78f(b). 5 In approving this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 6 15 U.S.C. 78f(b)(5). 1 15 E:\FR\FM\29NON1.SGM 29NON1

Agencies

[Federal Register Volume 70, Number 228 (Tuesday, November 29, 2005)]
[Notices]
[Pages 71590-71591]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-6619]



[[Page 71590]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52809; File No. SR-PCX-2005-108]


Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of 
Filing and Order Granting Accelerated Approval of Proposed Rule Change 
Relating to Listing Standards for Investment Company Units and 
Dissemination of Intraday Optimized Portfolio Value

November 18, 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 September 26, 2005, the Pacific Exchange, Inc. (``PCX'' or 
``Exchange''), through its wholly owned subsidiary PCX Equities, Inc. 
(``PCXE'' or ``Corporation''), filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the Exchange. 
The Commission is publishing this notice to solicit comments on the 
proposal from interested persons and also approving the proposal on an 
accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange, through its wholly-owned subsidiary PCXE, proposes to 
amend its rules governing the Archipelago Exchange (``ArcaEx''), the 
equities trading facility of PCXE. With this filing, the Exchange 
proposes to amend its listing standards for Investment Company Units 
(``ICUs'') to provide that PCXE may approve a series of ICUs for 
trading if one or more major market data vendors disseminates for each 
series of ICUs listed on ArcaEx an estimate of the value of a share of 
each series of ICUs, sometimes referred to as the Intraday Optimized 
Portfolio Value (``IOPV''), at least every 15 seconds during the time 
these ICUs trade on ArcaEx. The text of the proposed rule change is 
available on the Exchange's Internet Web site (http://
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 III 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
    PCXE Rule 5.2(j)(3), Commentary .01, provides listing standards for 
ICUs to permit listing and trading of these securities pursuant to Rule 
19b-4(e) under the Act.\3\ Rule 19b-4(e) provides that the listing and 
trading of a new derivative securities product by a self-regulatory 
organization (``SRO'') shall not be deemed a proposed rule change, 
pursuant to paragraph (c)(1) of Rule 19b-4, if the Commission has 
approved, pursuant to Section 19(b) of the Act, the SRO's trading 
rules, procedures and listing standards for the product class that 
would include the new derivative securities product, and the SRO has a 
surveillance program for the product class.\4\
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    \3\ 17 CFR 240.19b-4(e).
    \4\ See Securities Exchange Act Release No. 40761 (December 8, 
1998), 63 FR 70952 (December 22, 1998).
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    The Exchange rules for ICUs currently provide that the Reporting 
Authority \5\ will disseminate for each series of ICUs (in the case of 
PCXE Rule 5.2(j)(3)) an estimate, updated every 15 seconds, of the 
value of a share of the series. The IOPV may be based, for example, 
upon current information regarding the required deposit of securities 
and cash amount to permit creation of new shares of the series or upon 
the index value.\6\ The Exchange believes that, rather than identifying 
specifically in its rules the Reporting Authority as the dissemination 
service, it is preferable to reflect in the rules a requirement for 
wide dissemination of the IOPV. This proposed rule change would make 
clear that the IOPV must be widely disseminated by a reputable 
dissemination service, such as the Consolidated Tape Association, 
Reuters, or Bloomberg. The Exchange believes that naming the Reporting 
Authority as the dissemination service is not necessary and that the 
purpose of the rule would be achieved as long as the service used for 
dissemination is reputable, accepted in the investment community, and 
effects appropriately wide dissemination of the IOPV relating to a 
particular series of ICUs.
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    \5\ PCXE Rule 5.1(b)(16) provides that the term ``Reporting 
Authority'' in respect of a particular series of ICUs means the 
Corporation, a subsidiary of the Corporation, or an institution or 
reporting service designated by the Corporation or its subsidiary as 
the official source for calculating and reporting information 
relating to such series, including, but not limited to, any current 
index or portfolio value; the current value of the portfolio of any 
securities required to be deposited in connection with issuance of 
ICUs; the amount of any dividend equivalent payment or cash 
distribution to holders of ICUs, net asset value, or other 
information relating to the issuance, redemption or trading of ICUs. 
The rule further states that: (i) Nothing in PCXE Rule 5.2(j)(3) 
implies that an institution or reporting service that is the source 
for calculating and reporting information relating to ICUs must be 
designated by the Corporation and (ii) the term ``Reporting 
Authority'' shall not refer to an institution or reporting service 
not so designated.
    \6\ PCXE Rule 5.2(j)(3), Commentary .01(c).
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    The Exchange therefore proposes to change the listing standards for 
ICUs to provide that PCXE may approve a series of ICUs for trading if 
one or more major market data vendors disseminates for each series of 
ICUs listed on ArcaEx the IOPV every 15 seconds during the time that 
these ICUs trade on ArcaEx.
2. 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, 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 and 
perfect the mechanisms of a free and open market, 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. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule

[[Page 71591]]

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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-PCX-2005-108 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-2005-108. 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 (http://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 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-2005-108 and should be submitted on or before 
December 20, 2005.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    After careful consideration, 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.\9\ In particular, the Commission believes that the proposed 
rule change is consistent with Section 6(b)(5) of the Act,\10\ which 
requires, among other things, that the rules of the Exchange be 
designed to promote just and equitable principles of trade, 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.
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    \9\ In approving this proposed rule change, the Commission has 
considered its impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b)(5).
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    Under the proposed rule change, the Exchange would modify its 
``generic'' listing standards under PCXE Rule 5.2(j)(3) applicable to 
ICUs to remove the requirement that the Reporting Authority disseminate 
estimated values for each series every 15 seconds. Instead, the 
proposal would impose a requirement to have one or more major market 
vendors to disseminate such information during the time that ICUs trade 
on ArcaEx. For the purposes of this rule, the Exchange notes that its 
definition of major market data vendor includes the Consolidated Tape 
and services such as Reuters and Bloomberg.
    The Exchange has requested that the Commission find good cause for 
approving the proposed rule change prior to the thirtieth day after 
publication of notice thereof in the Federal Register. The Commission 
notes that it previously approved a similar rule change for the New 
York Stock Exchange, Inc. (``NYSE'').\11\
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    \11\ See Securities Exchange Act Release No. 52081 (July 20, 
2005), 70 FR 43488 (July 27, 2005) (SR-NYSE-2005-44).
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    The Commission believes that granting accelerated approval of the 
proposal will allow the Exchange to implement, without undue delay, 
these listing standards for dissemination of the estimated values for 
ICUs. Accordingly, the Commission finds good cause, pursuant to Section 
19(b)(2) of the Act,\12\ for approving this proposal before the 
thirtieth day after the publication of notice thereof in the Federal 
Register.
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    \12\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\13\ that the proposed rule change (SR-PCX-2005-108) is hereby 
approved on an accelerated basis.
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    \13\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. E5-6619 Filed 11-28-05; 8:45 am]
BILLING CODE 8010-01-P