Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Minimum Price Variation for Entry of Orders for Equity Securities Traded on the Archipelago Exchange, 2284-2286 [E6-324]
Download as PDF
<![CDATA[
2284
Federal Register / Vol. 71, No. 9 / Friday, January 13, 2006 / Notices
proposed rule change in no way will
affect the very high level of care to
which OCC has always held itself and
to which it is held through the
regulatory oversight of the
Commission.8 As such, OCC believes
that a gross negligence standard of care
is appropriate for OCC.9
III. Discussion
Section 19(b) of the Act directs the
Commission to approve a proposed rule
change of a self-regulatory organization
if it finds that such proposed rule
change is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
such organization. Section 17A(b)(3)(F)
of the Act requires that the rules of a
clearing agency be designed to assure
the safeguarding of securities and funds
which are in its custody or control.10
The Commission believes that OCC’s
rule change is consistent with this
Section because it will permit the
resources of OCC to be appropriately
utilized to protect funds and assets.11
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act and in
8 Letter
hsrobinson on PROD1PC70 with NOTICES
VerDate Aug<31>2005
15:41 Jan 12, 2006
Jkt 208001
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.13
Nancy M. Morris,
Secretary.
[FR Doc. E6–252 Filed 1–12–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53069; File No. SR–PCX–
2006–01]
Self-Regulatory Organizations; Pacific
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to Minimum
Price Variation for Entry of Orders for
Equity Securities Traded on the
Archipelago Exchange
January 6, 2006.
from William H. Navin, supra, n. 1.
OCC is amending Article VI of its
By-Laws, ‘‘Clearance of Exchange Transactions,’’ by
adding new Section 25, ‘‘Limitation of Liability,’’
which states:
(a) Notwithstanding any other provision in the
By-Laws and Rules, the Corporation will not be
liable for any action taken, or any delay or failure
to take any action, under the By-Laws and Rules or
otherwise, to fulfill the Corporation’s obligations to
its Clearing Members, other than for losses caused
directly by the Corporation’s gross negligence,
willful misconduct, or violation of federal securities
laws for which there is a private right of action.
Under no circumstances will the Corporation be
liable for the acts, delays, omissions, bankruptcy, or
insolvency of any third party, including, without
limitation, any bank or other depository, custodian,
sub-custodian, clearing or settlement system, data
communication service, or other third party, unless
the Corporation was grossly negligent, engaged in
willful misconduct, or was in violation of federal
securities laws for which there is a private right of
action, in selecting such third party; and
(b) Under no circumstances will the Corporation
be liable for any indirect, consequential, incidental,
special, punitive or exemplary loss or damage
(including, but not limited to, loss of business, loss
of profits, trading losses, loss of opportunity and
loss of use) however suffered or incurred, regardless
of whether the Corporation has been advised of the
possibility of such damages or whether such
damages otherwise could have been foreseen or
prevented.
10 15 U.S.C. 78q–1(b)(3)(F).
11 The Commission notes that OCC’s adoption of
a comprehensive gross negligence standard of care
and limitation of liability with respect to its
clearing members does not affect the regulatory
standards (e.g., those set forth in Section 17A of the
Act) that apply to OCC or the way in which OCC
conducts its clearing agency operations.
9 Specifically,
particular Section 17A of the Act and
the rules and regulations thereunder.12
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act, that the
proposed rule change (File No. SR–
OCC–2003–13) be and hereby is
approved.
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 January 4,
2006, 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 and II below, which Items
have been prepared by the Exchange.
The PCX filed the proposal pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(6) thereunder,4 which renders
the proposal effective upon filing with
the Commission. 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 the Substance
of the Proposed Rule Change
The Exchange proposes to amend its
rules governing the Archipelago
12 The Commission notes that the rule change
does not alleviate OCC from liability for violation
of the Federal securities laws where there exists a
private right of action and therefore is not designed
to adversely affect OCC’s compliance with the
Federal securities laws and private rights of action
that exist for violations of the Federal securities
laws.
13 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
PO 00000
Frm 00107
Fmt 4703
Sfmt 4703
Exchange (‘‘ArcaEx’’), the equities
trading facility of PCXE, to: (1) Amend
Commentary .04 to PCXE Rule 7.6 on
minimum price variations for quoting
and entry of orders in equity securities;
(2) delete Commentary .05 to PCXE Rule
7.6; (3) renumber Commentary .06 to
PCXE Rule 7.6 and correct a crossreference in that Commentary; and (4)
delete Commentary .01 to PCXE Rule
6.16. The text of the proposed rule
change is available on the PCX’s Web
site (https://www.pacificex.com), at the
principal office of the PCX, 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
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Commission adopted Regulation
NMS on April 6, 2005.5 One of the new
rules under Regulation NMS is Rule
612, Minimum Pricing Increment. That
rule prohibits a national securities
exchange, its members, and quotation
vendors (among others) from displaying,
ranking, or accepting a bid, offer, order,
or indication of interest for any NMS
stock that is priced in an increment
smaller than $0.01 per share, unless it
is priced less than $1.00 per share.6 In
the latter case, the exchange, its
members, and its quotation vendors may
display, rank, or accept a bid, offer,
order, or indication of interest in the
NMS stock in an increment no smaller
than $0.0001 per share.7 The
compliance date for Rule 612 is January
31, 2006.8
Currently, PCXE Rule 7.6,
Commentary .04 provides that the
minimum price variation (‘‘MPV’’) for
5 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496 (June 29, 2005).
Regulation NMS is comprised of the rules at 17 CFR
642.600–642.612.
6 See 17 CFR 242.612(a).
7 See 17 CFR 242.612(b).
8 See Securities Exchange Act Release No. 52196
(Aug. 2, 2005), 70 FR 45529 (Aug. 8, 2005).
E:\FR\FM\13JAN1.SGM
13JAN1
Federal Register / Vol. 71, No. 9 / Friday, January 13, 2006 / Notices
quoting and entering orders in equity
securities traded on ArcaEx is $0.01 per
share, with the exception of securities
priced less than $1.00 per share, in
which case, on a pilot basis through
September 30, 2005, the MPV is $0.001
per share. PCXE Rule 7.6, Commentary
.05 provides that PCXE will round such
sub-penny prices to whole penny
increments, by rounding the bid down
to the next whole penny and rounding
the offer up to the next whole penny,
and will display the rounded quotes in
the consolidated quotation system
without a rounding identifier.
With this filing, the Exchange is
seeking to amend PCXE Rule 7.6,
Commentary .04 to provide that (1) the
Exchange will accept orders in equity
securities traded on ArcaEx that are
priced less than $1.00 per share in
increments as small as $0.0001 per
share, as permitted under Rule 612; (2)
it will round such orders to whole
penny increments following the same
rounding conventions described above;
and (3) it will display the rounded
quotes in the consolidated quotation
system. As currently provided in PCXE
Rule 7.6, Commentary .04, the MPV for
quoting and entering orders in equity
securities traded on ArcaEx is $0.01 per
share.
The Exchange also proposes to delete
Commentary .05 to PCXE Rule 7.6 and
Commentary .01 to PCXE Rule 6.16
because they will become outdated
when the amendments to PCXE Rule
7.6, Commentary .04 take effect, and to
change the numbering of PCXE Rule 7.6,
Commentary .06 to Commentary .05 and
correct a cross-reference in that
Commentary.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,9 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,10 in particular, in that it is
designed to facilitate transactions in
securities, to promote just and equitable
principles of trade, to enhance
competition, and to protect investors
and the public interest.
hsrobinson on PROD1PC70 with NOTICES
B. Self-Regulatory Organization’s
Statement on Burden on Competition
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 15
VerDate Aug<31>2005
15:41 Jan 12, 2006
Jkt 208001
Written comments on the proposed
rule change were neither solicited nor
received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change: (1)
Does not significantly affect the
protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) does not become operative for 30
days after the date of the filing, or such
shorter time as the Commission may
designate if consistent with the
protection of investors and the public
interest, the proposed rule change has
become effective pursuant to Section
19(b)(3)(A) of the Act 11 and Rule 19b–
4(f)(6) thereunder.12 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 furtherance of the
purposes of the Act.
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing.13 However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay and
allow the proposed rule change to
become operative immediately. The
Commission hereby grants that
request.14 The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because the proposal is consistent with
the requirements of Rule 612 and
waiving the operative delay will allow
the PCX to meet the compliance
deadline for Rule 612.
11 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). As required by Rule
19b–4(f)(6)(iii) under the Act, the Exchange also
provided with 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 proposed rule change.
13 See id.
14 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
12 17
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.
9 15
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
PO 00000
Frm 00108
Fmt 4703
Sfmt 4703
2285
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–PCX–2006–01 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–9303.
All submissions should refer to File
Number SR–PCX–2006–01. 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 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–2006–01 and should
be submitted on or before February 3,
2006.
E:\FR\FM\13JAN1.SGM
13JAN1
2286
Federal Register / Vol. 71, No. 9 / Friday, January 13, 2006 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.15
Nancy M. Morris,
Secretary.
[FR Doc. E6–324 Filed 1–12–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53070; File No. SR–Phlx–
2005–63
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Order Granting Approval to Proposed
Rule Change Relating to the
Prohibition of Trade Shredding
January 6, 2006.
I. Introduction
On October 25, 2005, the Philadelphia
Stock Exchange, Inc. (‘‘Phlx’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 the proposed rule change
relating to the prohibition of trade
shredding. The proposed rule change
was published for comment in the
Federal Register on December 5, 2005.3
The Commission received no comments
on the proposal. This order approves the
proposed rule change.
II. Description of the Proposal
The Exchange proposed to amend
Rule 707, Conduct Inconsistent with
Just and Equitable Principles of Trade,
to prohibit members, member
organizations and persons associated
with or employed by a member or
member organization from unbundling
orders for execution for the primary
purpose of maximizing a monetary or
like payment to the member, member
organization, or person associated with
or employed by a member or member
organization.
hsrobinson on PROD1PC70 with NOTICES
III. Discussion and Commission
Findings
The Commission has reviewed
carefully the proposed rule change and
finds that it is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange,4
15 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. 52834
(November 25, 2005), 70 FR 72492.
4 In approving this proposed rule change, the
Commission has considered the proposed rule’s
1 15
VerDate Aug<31>2005
15:41 Jan 12, 2006
Jkt 208001
particularly Section 6(b)(5) of the Act
which, among other things, requires that
the rules of a national securities
exchange be designed to promote just
and equitable principles of trade, to
foster cooperation and coordination
with persons engaged in regulating
securities transactions, to remove
impediments to perfect the mechanism
of a free and open market and a national
market system and, in general, to protect
investors and the public interest.5 The
Commission believes that the proposed
rule change should help eliminate the
distortive practice of trade shredding,
and, therefore, promote just and
equitable principles of trade.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,6 that the
proposed rule change (File No. SR–
Phlx–2005–63), be and hereby is,
approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.7
Nancy M. Morris,
Secretary.
[FR Doc. E6–256 Filed 1–12–06; 8:45 am]
change.3 The Commission is publishing
this notice to solicit comments on the
proposed rule change, as amended, from
interested persons, and is approving the
amended proposal on an accelerated
basis.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Phlx proposes to change the title
from the ‘‘SEC Fee’’ to ‘‘Covered Sale
Fee’’ as it appears on the Exchange’s
Summary of Equity Charges and the
Nasdaq-100 Index Tracking StockSM Fee
Schedule (‘‘Fee Schedule’’).4 The
Exchange also proposes to amend
Exchange Rule 607 to clarify the
description of the Covered Sale Fee,
including renaming the title of Phlx
Rule 607 to ‘‘Covered Sale Fee’’ and
providing a more complete description
of a new arrangement for passing fees
among Intermarket Trading System
(‘‘ITS’’) participants. Below is the text of
the proposed rule change, as amended.
Proposed new language is in italics;
proposed deletions are in brackets.
Rule 607.
[Transaction] Covered Sale Fee
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53088; File No. SR–Phlx–
2005–87]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing and Order Granting
Accelerated Approval to a Proposed
Rule Change, and Amendment No. 1
Thereto Relating to the Exchange’s
Covered Sale Fee and Exchange Rule
607
January 6, 2006.
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 December
23, 2005, the Philadelphia Stock
Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’)
the proposed rule change as described
in Items I and II below, which Items
have been prepared by the Phlx. On
January 4, 2006, the Exchange filed
Amendment No. 1 to the proposed rule
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. 78s(b)(2).
7 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
PO 00000
Frm 00109
Fmt 4703
Sfmt 4703
Under Section 31 of the Securities
Exchange Act of 1934, the Exchange
must pay certain fees to the Securities
and Exchange Commission
(‘‘Commission’’). To help fund the
Exchange’s obligations to the
Commission under Section 31, a
Covered Sale Fee is assessed by the
Exchange to members and member
organizations. To the extent there may
be any excess monies collected under
this Rule, the Exchange may retain
those monies to help fund its general
operating expenses. [Every member and
member organization shall pay to the
Exchange in such manner and at such
time as the Exchange shall direct, the
fees specified in Section 31 of the
Securities Exchange Act of 1934, and
rules thereunder, for all sales upon the
Exchange of securities specified in
3 Amendment No. 1 made technical changes to
the proposed rule text.
4 The Nasdaq-100, Nasdaq-100 Index,
Nasdaq, The Nasdaq Stock Market, Nasdaq-100
SharesSM, Nasdaq-100 TrustSM, Nasdaq-100 Index
Tracking StockSM, and QQQSM are trademarks or
service marks of The Nasdaq Stock Market, Inc.
(‘‘Nasdaq’’) and have been licensed for use for
certain purposes by the Phlx pursuant to a license
agreement with Nasdaq. The Nasdaq-100 Index
(‘‘Index’’) is determined, composed, and calculated
by Nasdaq without regard to the Licensee, the
Nasdaq-100 TrustSM, or the beneficial owners of
Nasdaq-100 SharesSM. Nasdaq has complete control
and sole discretion in determining, comprising, or
calculating the Index or in modifying in any way
its method for determining, comprising, or
calculating the Index in the future.
E:\FR\FM\13JAN1.SGM
13JAN1
]]>Agencies
[Federal Register Volume 71, Number 9 (Friday, January 13, 2006)]
[Notices]
[Pages 2284-2286]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-324]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53069; File No. SR-PCX-2006-01]
Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Minimum Price Variation for Entry of Orders for Equity Securities
Traded on the Archipelago Exchange
January 6, 2006.
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 January 4, 2006, 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 and
II below, which Items have been prepared by the Exchange. The PCX filed
the proposal pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule
19b-4(f)(6) thereunder,\4\ which renders the proposal effective upon
filing with the Commission. 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\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange proposes to amend its rules governing the Archipelago
Exchange (``ArcaEx''), the equities trading facility of PCXE, to: (1)
Amend Commentary .04 to PCXE Rule 7.6 on minimum price variations for
quoting and entry of orders in equity securities; (2) delete Commentary
.05 to PCXE Rule 7.6; (3) renumber Commentary .06 to PCXE Rule 7.6 and
correct a cross-reference in that Commentary; and (4) delete Commentary
.01 to PCXE Rule 6.16. The text of the proposed rule change is
available on the PCX's Web site (https://www.pacificex.com), at the
principal office of the PCX, 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Commission adopted Regulation NMS on April 6, 2005.\5\ One of
the new rules under Regulation NMS is Rule 612, Minimum Pricing
Increment. That rule prohibits a national securities exchange, its
members, and quotation vendors (among others) from displaying, ranking,
or accepting a bid, offer, order, or indication of interest for any NMS
stock that is priced in an increment smaller than $0.01 per share,
unless it is priced less than $1.00 per share.\6\ In the latter case,
the exchange, its members, and its quotation vendors may display, rank,
or accept a bid, offer, order, or indication of interest in the NMS
stock in an increment no smaller than $0.0001 per share.\7\ The
compliance date for Rule 612 is January 31, 2006.\8\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496 (June 29, 2005). Regulation NMS is comprised of
the rules at 17 CFR 642.600-642.612.
\6\ See 17 CFR 242.612(a).
\7\ See 17 CFR 242.612(b).
\8\ See Securities Exchange Act Release No. 52196 (Aug. 2,
2005), 70 FR 45529 (Aug. 8, 2005).
---------------------------------------------------------------------------
Currently, PCXE Rule 7.6, Commentary .04 provides that the minimum
price variation (``MPV'') for
[[Page 2285]]
quoting and entering orders in equity securities traded on ArcaEx is
$0.01 per share, with the exception of securities priced less than
$1.00 per share, in which case, on a pilot basis through September 30,
2005, the MPV is $0.001 per share. PCXE Rule 7.6, Commentary .05
provides that PCXE will round such sub-penny prices to whole penny
increments, by rounding the bid down to the next whole penny and
rounding the offer up to the next whole penny, and will display the
rounded quotes in the consolidated quotation system without a rounding
identifier.
With this filing, the Exchange is seeking to amend PCXE Rule 7.6,
Commentary .04 to provide that (1) the Exchange will accept orders in
equity securities traded on ArcaEx that are priced less than $1.00 per
share in increments as small as $0.0001 per share, as permitted under
Rule 612; (2) it will round such orders to whole penny increments
following the same rounding conventions described above; and (3) it
will display the rounded quotes in the consolidated quotation system.
As currently provided in PCXE Rule 7.6, Commentary .04, the MPV for
quoting and entering orders in equity securities traded on ArcaEx is
$0.01 per share.
The Exchange also proposes to delete Commentary .05 to PCXE Rule
7.6 and Commentary .01 to PCXE Rule 6.16 because they will become
outdated when the amendments to PCXE Rule 7.6, Commentary .04 take
effect, and to change the numbering of PCXE Rule 7.6, Commentary .06 to
Commentary .05 and correct a cross-reference in that Commentary.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\10\ in particular, in that it
is designed to facilitate transactions in securities, to promote just
and equitable principles of trade, to enhance competition, and to
protect investors and the public interest.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments on the proposed rule change were neither solicited
nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change: (1) Does not significantly affect
the protection of investors or the public interest; (2) does not impose
any significant burden on competition; and (3) does not become
operative for 30 days after the date of the filing, or such shorter
time as the Commission may designate if consistent with the protection
of investors and the public interest, the proposed rule change has
become effective pursuant to Section 19(b)(3)(A) of the Act \11\ and
Rule 19b-4(f)(6) thereunder.\12\ 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 furtherance of the purposes of
the Act.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). As required by Rule 19b-
4(f)(6)(iii) under the Act, the Exchange also provided with 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
proposed rule change.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing.\13\ However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange has asked the Commission to waive the
30-day operative delay and allow the proposed rule change to become
operative immediately. The Commission hereby grants that request.\14\
The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because the proposal is consistent with the requirements of Rule 612
and waiving the operative delay will allow the PCX to meet the
compliance deadline for Rule 612.
---------------------------------------------------------------------------
\13\ See id.
\14\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-PCX-2006-01 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-9303.
All submissions should refer to File Number SR-PCX-2006-01. 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 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-2006-01 and
should be submitted on or before February 3, 2006.
[[Page 2286]]
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Nancy M. Morris,
Secretary.
[FR Doc. E6-324 Filed 1-12-06; 8:45 am]
BILLING CODE 8010-01-P
