Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of Filing of Proposed Rule Change Relating to Modifications to Archipelago Exchange's Closing Auction, 3145-3147 [E6-520]

Download as PDF Federal Register / Vol. 71, No. 12 / Thursday, January 19, 2006 / Notices firms in their order routing and execution systems. In this respect, the ISE has modified its system to disclose the identity of order entry firms to DMMs on a temporary basis.5 The purpose of this proposed rule change is to specify in the ISE rules that Directed Orders are not anonymous, which if approved by the Commission, will make the temporary system change permanent.6 2. Statutory Basis The Exchange believes that the basis under the Act for this proposed rule change is found in section 6(b)(5),7 in that the proposed rule change is designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, to remove impediments to and perfect the mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest. In particular, the proposed rule change will enable the Exchange to remain competitive in the market place. B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action sroberts on PROD1PC70 with NOTICES Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or 5 See Securities Exchange Act Release No. 53104 (January 11, 2006) (File No. SR–ISE–2006–02). This temporary system change was effective upon filing pursuant to Rule 19b–4(f)(5) under the Act. 17 CFR 240.19b–4(f)(5). 6 Currently, the ISE rules do not specify that Directed Orders are sent to a DMM on an anonymous basis. The ISE also enforces anonymity in certain other trading systems, such as its Facilitation Mechanism. The Exchange plans to file a proposed rule change eliminating the anonymity provisions in certain of these areas as well. 7 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 16:38 Jan 18, 2006 Jkt 208001 (ii) as to which the Exchange consents, the Commission shall: (a) By order approve such proposed rule change, or (b) Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change 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 rulecomments@sec.gov. Please include File No. SR–ISE–2006–01 on the subject line. 3145 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.8 Nancy M. Morris, Secretary. [FR Doc. E6–521 Filed 1–18–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53096; File No. SR–PCX– 2005–141] Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of Filing of Proposed Rule Change Relating to Modifications to Archipelago Exchange’s Closing Auction January 11, 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 21, 2005, the Pacific Exchange, Inc. Paper Comments (‘‘PCX’’ or ‘‘Exchange’’), through its • Send paper comments in triplicate wholly owned subsidiary (‘‘PCXE’’ or to Nancy M. Morris, Secretary, the ‘‘Corporation’’), filed with the Securities and Exchange Commission, Securities and Exchange Commission Station Place, 100 F Street, NE., (‘‘Commission’’) the proposed rule Washington, DC 20549–9303. change as described in Items I, II and III All submissions should refer to File below, which Items have been prepared Number SR–ISE–2006–01. This file by PCX. The Commission is publishing number should be included on the this notice to solicit comment on the subject line if e-mail is used. To help the proposed rule change from interested Commission process and review your persons. comments more efficiently, please use only one method. The Commission will I. Self-Regulatory Organization’s post all comments on the Commission’s Statement of the Terms of Substance of the Proposed Rule Change Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the The Exchange proposes to amend its submission, all subsequent rules governing the Archipelago amendments, all written statements Exchange (‘‘ArcaEx’’), the equity trading with respect to the proposed rule facility of PCXE. With this filing, the change that are filed with the Exchange proposes to clarify the Commission, and all written ArcaEx’s Closing Auction functionality communications relating to the and limit the use of the Closing Auction proposed rule change between the to primary listed securities. The text of Commission and any person, other than the proposed rule change is available on those that may be withheld from the the PCX Web site public in accordance with the (http:/www.pacificex.com), at the PCX’s provisions of 5 U.S.C. 552, will be Office of the Secretary and at the available for inspection and copying in Commission’s Public Reference Room. the Commission’s Public Reference Room. Copies of such filing also will be II. Self-Regulatory Organization’s Statement of the Purpose of, and available for inspection and copying at Statutory Basis for, the Proposed Rule the principal office of the ISE. All comments received will be posted Change without change; the Commission does In its filing with the Commission, the not edit personal identifying Exchange included statements information from submissions. You concerning the purpose of, and basis for, should submit only information that the proposed rule change. The text of you wish to make available publicly. All these statements may be examined at submissions should refer to File the places specified in Item IV below. Number SR–ISE–2006–01 and should be The Exchange has prepared summaries, submitted on or before February 9, 2006. 1 15 8 17 PO 00000 CFR 200.30–3(a)(12). Frm 00097 Fmt 4703 2 17 Sfmt 4703 E:\FR\FM\19JAN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 19JAN1 3146 Federal Register / Vol. 71, No. 12 / Thursday, January 19, 2006 / Notices 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 sroberts on PROD1PC70 with NOTICES The Exchange proposes to make clarifying changes to the Closing Auction rule contained in PCXE Rule 7.35. In particular, the Exchange proposes to make conforming changes that were recently incorporated into the ArcaEx Market Order Auction rules.3 In addition, the Exchange proposes to limit the use of its Closing Auction to Exchange-listed securities, including Exchange-listed exchange traded funds, for which the Corporation is the primary market. The conforming changes that the Exchange proposes are as follows. First, PCXE Rule 7.35(e)(2)(A) would be clarified to reflect that orders on the side of the Imbalance 4 shall be executed as follows: (i) Market-on-Close (‘‘MOC’’) Orders 5; (ii) Limit Orders entered prior to the Closing Auction; and (iii) Limiton-Close (‘‘LOC’’) Orders.6 Second, the language in PCXE Rule 7.35(e)(3) would be modified to be substantively consistent with that of the Market Order Auction changes recently adopted.7 Specifically, when there are Limited Price Orders 8 eligible for execution in the Closing Auction, the Closing Auction price would be the Indicative Match Price.9 If there were no Limited Price Orders eligible for execution in the Closing Auction, MOC Orders would be rejected. In addition, MOC Orders that are eligible for, but not executed in, the Closing Auction would be cancelled immediately upon conclusion of the Closing Auction. The Exchange also proposes to delete PCXE Rule 7.35(e)(3)(C), regarding limiting the Closing Auction Price to prices within a threshold amount. In the rule filing where modifications were made to the ArcaEx Market Order Auction, the same concept as described in PCXE Rule 3 See Securities Exchange Act Release No. 52361 (August 30, 2005), 70 FR 53704 (September 9, 2005)(SR–PCX–2005–58). 4 See PCXE Rule 1.1(q). 5 See PCXE Rule 1.1(dd). 6 See PCXE Rule 1.1(ee). 7 See supra note 3. Note that the Market Order Auction rule text can be distinguished from the Closing Auction because the Market Order Auction applies both to Nasdaq-listed and Exchange-listed securities for which the Corporation is the primary market and all Exchange-listed exchange traded funds. 8 See PCXE Rule 1.1(s). 9 See PCXE Rule 1.1(r). VerDate Aug<31>2005 16:38 Jan 18, 2006 Jkt 208001 7.35(e)(3)(C), was incorporated into PCXE Rule 1.1(r)(A).10 Further, the Exchange proposes a few, non-substantive changes to clarify the existing language in the Closing Auction rule. First, the Exchange proposes to modify PCXE Rule 7.35(e)(1)(A) to clarify that the Total Imbalance 11 and Market Imbalance 12 would be published via electronic means. Second, Examples 1 and 2 of that provision would be clarified to make the reference to the last sale during normal market hours as determined by the consolidated tape to be consistent with the reference in the ‘‘Indicative Match Price’’ definition. Lastly, PCXE Rule 7.35(e)(2)(B) would be modified to reflect that Limited Price Orders, with the exception of LOC Orders, may be cancelled. The Exchange also proposes to limit the use of its Closing Auction to Exchange-listed securities, including Exchange-listed exchange traded funds, for which the Corporation is the primary market. Accordingly, PCXE Rule 7.31(dd) that defines MOC Orders and PCXE Rule 7.31(ee) that defines LOC Orders would be modified to reflect that such orders might be cancelled in the following circumstances: (i) in securities for which the Corporation is not the primary market; or (ii) when the auction is suspended pursuant to PCXE Rule 7.35(g). In addition, PCXE Rule 7.35(e) would be modified to reflect that the Closing Auction would be limited to Exchange-listed securities, including Exchange-listed exchange traded funds, for which the Corporation is the primary market. The Exchange proposes to limit the use of its Closing Auction to certain securities because of limited participation in the Closing Auction to date. Accordingly, with limited liquidity to participate in the Closing Auction, orders are frequently executed at prices that vary from the closing prices at other primary markets. In order to protect ETP Holders 13 from this execution occurring, the Exchange proposes to limit its Closing Auctions to only those securities where the Corporation is the primary market. Lastly, the Exchange proposes to clarify that in the case of unusual system problems or other malfunctions, the Exchange may suspend auctions. Accordingly, PCXE Rule 7.35(g) would be modified to reflect this. This exception would only be used on an infrequent basis when needed to maintain a fair and orderly market. In 10 See supra note 3. PCXE Rule 1.1(q)(1)(A). 12 See PCXE Rule 1.1(q)(1)(B). 13 See PCXE Rule 1.1(n). 11 See PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 addition, the Exchange would reject MOC and LOC Orders as indicated in proposed PCXE Rules 7.31(dd) and (ee), respectively. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) 14 of the Act, in general, and furthers the objectives of Section 6(b)(5) of the Act,15 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. In particular, the Exchange believes that making such changes to the Closing Auction procedures would better protect ETP Holders from executions at the close that are substantially away from the primary market closing prices.16 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 Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) by order approve the proposed modifications, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and 14 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 16 Clarified in telephone conference among Bridget Farrell, Director, Strategy, ArcaEx, Timothy Fox, Special Counsel, Division of Market Regulation (‘‘Division’’), Commission and Mitra Mehr, Special Counsel, Division, Commission on January 10, 2006. 15 15 E:\FR\FM\19JAN1.SGM 19JAN1 Federal Register / Vol. 71, No. 12 / Thursday, January 19, 2006 / Notices 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 SMALL BUSINESS ADMINISTRATION Data Collection Available for Public Comments and Recommendations sroberts on PROD1PC70 with NOTICES SUMMARY: In accordance with the Paperwork Reduction Act of 1995, this notice announces the Small Business Administration’s intentions to request • Send an e-mail to rulesapproval on a new and/or currently comments@sec.gov. Please include File approved information collection. No. SR–PCX–2005–141 on the subject line. DATES: Submit comments on or before March 20, 2006. Paper Comments ADDRESSES: Send all comments regarding whether this information • Send paper comments in triplicate collection is necessary for the proper to Nancy M. Morris, Secretary, performance of the function of the Securities and Exchange Commission, agency, whether the burden estimates 100 F Street, NE., Washington, DC are accurate, and if there are ways to 20549–9303. minimize the estimated burden and All submissions should refer to File enhance the quality of the collection, to No. SR–PCX–2005–141. This file Gary Jackson, Assistant Administrator, number should be included on the Office of Size Standards, Small Business subject line if e-mail is used. To help the Administration, 409 3rd Street, SW., Commission process and review your Suite 8800, Washington, DC 20416. comments more efficiently, please use FOR FURTHER INFORMATION CONTACT: Gary only one method. The Commission will post all comments on the Commission’s Jackson, Assistant Administrator, Office of Size Standards, 202–205–6464, Internet Web site (http://www.sec.gov/ gary.jackson@sba.gov. Curtis B. Rich, rules/sro.shtml). Management Analyst, 202–205–7030, Copies of the submission, all curtis.rich@sba.gov. subsequent amendments, all written statements with respect to the proposed SUPPLEMENTARY INFORMATION: Title: ‘‘Application for Small Business rule change that are filed with the Size Standards’’. Commission, and all written Description of Respondents: Small communications relating to the Businesses. proposed rule change between the Form No.: 355. Commission and any person, other than Annual Responses: 10,500. those that may be withheld from the Annual Burden: 42,000. public in accordance with the provisions of 5 U.S.C. 552, will be ADDRESSES: Send all comments available for inspection and copying in regarding whether this information the Commission’s Public Reference collection is necessary for the proper Room. Copies of such filing will also be performance of the function of the available for inspection and copying at agency, whether the burden estimates the principal office of the PCX. All are accurate, and if there are ways to comments received will be posted minimize the estimated burden and without change; the Commission does enhance the quality of the collection, to not edit personal identifying Cynthia Pitts, Office of Disaster information from submissions. You Assistance, Administrative Officer, should submit only information that Small Business Administration, 409 3rd you wish to make available publicly. All Street, SW., Suite 6000, Washington, DC submissions should refer to File No. 20416. SR–PCX–2005–141 and should be FOR FURTHER INFORMATION CONTACT: submitted February 9, 2006. Cynthia Pitts, Administrative Officer, For the Commission, by the Division of Office of Disaster Assistance, 202–205– Market Regulation, pursuant to delegated 7570, cynthia.pitts@sba.gov. Curtis B. authority.17 Rich, Management Analyst, 202–205– Nancy M. Morris, 7030, curtis.rich@sba.gov. Secretary. SUPPLEMENTARY INFORMATION: [FR Doc. E6–520 Filed 1–18–06; 8:45 am] Title: ‘‘Governor’s Request for Disaster BILLING CODE 8010–01–P Declaration’’. Description of Respondents: Victims 17 17 CFR 200.30–3(a)(12). in Presidential Declared Disaster. 19:17 Jan 18, 2006 Jkt 208001 Form No.: N/A. Annual Responses: 47. Annual Burden: 940. Send all comments regarding whether this information collection is necessary for the proper performance of the function of the agency, whether the burden estimates are accurate, and if there are ways to minimize the estimated burden and enhance the quality of the collection, to Patricia Branch, Office of Procurement and Grants Management, Grants Management Specialist, Small Business Administration, 409 3rd Street, SW., Suite 5000, Washington, DC 20416. ADDRESSES: Notice and request for comments. ACTION: • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or VerDate Aug<31>2005 3147 PO 00000 Frm 00099 Fmt 4703 Sfmt 4703 FOR FURTHER INFORMATION CONTACT: Patricia Branch, Grants Management Specialist, Office of Procurement and Grants Management, 202–205–7081, patricia.branch@sba.gov. Curtis B. Rich, Management Analyst, 202–205–7030, curtis.rich@sba.gov. SUPPLEMENTARY INFORMATION: Title: ‘‘Notice of Award and Grant/ Cooperative Agreement Cost Sharing Proposal’’. Description of Respondents: Participating Colleges. Form No.: 1222. Annual Responses: 2,526. Annual Burden: 202,080. Send all comments regarding whether this information collection is necessary for the proper performance of the function of the agency, whether the burden estimates are accurate, and if there are ways to minimize the estimated burden and enhance the quality of the collection, to Darryl Glover, Office of Small Business Administration, 409 3rd Street, SW., Suite 6000, Washington, DC 20416. ADDRESSES: FOR FURTHER INFORMATION CONTACT: Darryl Glover, Grants Management Specialist, Office of Small Business Development Centers, 202–205–7306, darryl.glover@sba.gov. Curtis B. Rich, Management Analyst, 202–205–7030, curtis.rich@sba.gov. SUPPLEMENTARY INFORMATION: Title: ‘‘Grant Cooperative Agreement Cost Sharing Proposal’’. Description of Respondents: Grants Management Offices. Form No.: 1224. Annual Responses: 2,526. Annual Burden: 202,080. Jacqueline White, Chief, Administrative Information Branch. [FR Doc. E6–514 Filed 1–18–06; 8:45am] BILLING CODE 8025–01–P E:\FR\FM\19JAN1.SGM 19JAN1

Agencies

[Federal Register Volume 71, Number 12 (Thursday, January 19, 2006)]
[Notices]
[Pages 3145-3147]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-520]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53096; File No. SR-PCX-2005-141]


Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of 
Filing of Proposed Rule Change Relating to Modifications to Archipelago 
Exchange's Closing Auction

January 11, 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 21, 2005, the Pacific Exchange, Inc. (``PCX'' or 
``Exchange''), through its wholly owned subsidiary (``PCXE'' or the 
``Corporation''), 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. The Commission is 
publishing this notice to solicit comment on the proposed rule change 
from interested persons.
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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 proposes to amend its rules governing the Archipelago 
Exchange (``ArcaEx''), the equity trading facility of PCXE. With this 
filing, the Exchange proposes to clarify the ArcaEx's Closing Auction 
functionality and limit the use of the Closing Auction to primary 
listed securities. The text of the proposed rule change is available on 
the PCX Web site (http:/www.pacificex.com), at the PCX's Office of the 
Secretary and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of, and basis for, 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,

[[Page 3146]]

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 Exchange proposes to make clarifying changes to the Closing 
Auction rule contained in PCXE Rule 7.35. In particular, the Exchange 
proposes to make conforming changes that were recently incorporated 
into the ArcaEx Market Order Auction rules.\3\ In addition, the 
Exchange proposes to limit the use of its Closing Auction to Exchange-
listed securities, including Exchange-listed exchange traded funds, for 
which the Corporation is the primary market.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 52361 (August 30, 
2005), 70 FR 53704 (September 9, 2005)(SR-PCX-2005-58).
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    The conforming changes that the Exchange proposes are as follows. 
First, PCXE Rule 7.35(e)(2)(A) would be clarified to reflect that 
orders on the side of the Imbalance \4\ shall be executed as follows: 
(i) Market-on-Close (``MOC'') Orders \5\; (ii) Limit Orders entered 
prior to the Closing Auction; and (iii) Limit-on-Close (``LOC'') 
Orders.\6\ Second, the language in PCXE Rule 7.35(e)(3) would be 
modified to be substantively consistent with that of the Market Order 
Auction changes recently adopted.\7\ Specifically, when there are 
Limited Price Orders \8\ eligible for execution in the Closing Auction, 
the Closing Auction price would be the Indicative Match Price.\9\ If 
there were no Limited Price Orders eligible for execution in the 
Closing Auction, MOC Orders would be rejected. In addition, MOC Orders 
that are eligible for, but not executed in, the Closing Auction would 
be cancelled immediately upon conclusion of the Closing Auction. The 
Exchange also proposes to delete PCXE Rule 7.35(e)(3)(C), regarding 
limiting the Closing Auction Price to prices within a threshold amount. 
In the rule filing where modifications were made to the ArcaEx Market 
Order Auction, the same concept as described in PCXE Rule 
7.35(e)(3)(C), was incorporated into PCXE Rule 1.1(r)(A).\10\
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    \4\ See PCXE Rule 1.1(q).
    \5\ See PCXE Rule 1.1(dd).
    \6\ See PCXE Rule 1.1(ee).
    \7\ See supra note 3. Note that the Market Order Auction rule 
text can be distinguished from the Closing Auction because the 
Market Order Auction applies both to Nasdaq-listed and Exchange-
listed securities for which the Corporation is the primary market 
and all Exchange-listed exchange traded funds.
    \8\ See PCXE Rule 1.1(s).
    \9\ See PCXE Rule 1.1(r).
    \10\ See supra note 3.
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    Further, the Exchange proposes a few, non-substantive changes to 
clarify the existing language in the Closing Auction rule. First, the 
Exchange proposes to modify PCXE Rule 7.35(e)(1)(A) to clarify that the 
Total Imbalance \11\ and Market Imbalance \12\ would be published via 
electronic means. Second, Examples 1 and 2 of that provision would be 
clarified to make the reference to the last sale during normal market 
hours as determined by the consolidated tape to be consistent with the 
reference in the ``Indicative Match Price'' definition. Lastly, PCXE 
Rule 7.35(e)(2)(B) would be modified to reflect that Limited Price 
Orders, with the exception of LOC Orders, may be cancelled.
---------------------------------------------------------------------------

    \11\ See PCXE Rule 1.1(q)(1)(A).
    \12\ See PCXE Rule 1.1(q)(1)(B).
---------------------------------------------------------------------------

    The Exchange also proposes to limit the use of its Closing Auction 
to Exchange-listed securities, including Exchange-listed exchange 
traded funds, for which the Corporation is the primary market. 
Accordingly, PCXE Rule 7.31(dd) that defines MOC Orders and PCXE Rule 
7.31(ee) that defines LOC Orders would be modified to reflect that such 
orders might be cancelled in the following circumstances: (i) in 
securities for which the Corporation is not the primary market; or (ii) 
when the auction is suspended pursuant to PCXE Rule 7.35(g). In 
addition, PCXE Rule 7.35(e) would be modified to reflect that the 
Closing Auction would be limited to Exchange-listed securities, 
including Exchange-listed exchange traded funds, for which the 
Corporation is the primary market. The Exchange proposes to limit the 
use of its Closing Auction to certain securities because of limited 
participation in the Closing Auction to date. Accordingly, with limited 
liquidity to participate in the Closing Auction, orders are frequently 
executed at prices that vary from the closing prices at other primary 
markets. In order to protect ETP Holders \13\ from this execution 
occurring, the Exchange proposes to limit its Closing Auctions to only 
those securities where the Corporation is the primary market.
---------------------------------------------------------------------------

    \13\ See PCXE Rule 1.1(n).
---------------------------------------------------------------------------

    Lastly, the Exchange proposes to clarify that in the case of 
unusual system problems or other malfunctions, the Exchange may suspend 
auctions. Accordingly, PCXE Rule 7.35(g) would be modified to reflect 
this. This exception would only be used on an infrequent basis when 
needed to maintain a fair and orderly market. In addition, the Exchange 
would reject MOC and LOC Orders as indicated in proposed PCXE Rules 
7.31(dd) and (ee), respectively.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \14\ of the Act, in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\15\ 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. In particular, the Exchange 
believes that making such changes to the Closing Auction procedures 
would better protect ETP Holders from executions at the close that are 
substantially away from the primary market closing prices.\16\
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
    \16\ Clarified in telephone conference among Bridget Farrell, 
Director, Strategy, ArcaEx, Timothy Fox, Special Counsel, Division 
of Market Regulation (``Division''), Commission and Mitra Mehr, 
Special Counsel, Division, Commission on January 10, 2006.
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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. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) by order approve the proposed modifications, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and

[[Page 3147]]

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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rules-comments@sec.gov. Please include 
File No. SR-PCX-2005-141 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 No. SR-PCX-2005-141. 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 will also be 
available for inspection and copying at the principal office of the 
PCX. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File No. SR-PCX-
2005-141 and should be submitted February 9, 2006.
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    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
Nancy M. Morris,
Secretary.
 [FR Doc. E6-520 Filed 1-18-06; 8:45 am]
BILLING CODE 8010-01-P