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]
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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).
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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 (https://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 (https://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 (https://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 (https://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]
-----------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
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).
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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 (https://
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 (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
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
