Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Conforming Changes to Its By-Laws, 44067-44070 [E6-12520]

Download as PDF Federal Register / Vol. 71, No. 149 / Thursday, August 3, 2006 / Notices II. Description The ISE proposes to amend ISE Rule 720 to provide that, unless all parties to a trade agree otherwise, the Exchange (through its Market Control Unit) may nullify a transaction if all parties to the trade do not receive a trade execution report 5 due to a verifiable system outage. The Exchange represented that it routinely sends out trade execution reports to all Members that are parties to a trade.6 The ISE states that it developed the Obvious Error Rule to address the need to handle errors in a fully electronic market where orders and quotes are executed automatically before an obvious error may be discovered and corrected by Members. The Exchange notes that in formulating the Obvious Error Rule, it weighed carefully the need to assure that one market participant is not permitted to receive a windfall at the expense of another market participant that made an obvious error, against the need to assure that market participants are not simply being given an opportunity to reconsider poor trading decisions. The Exchange believes that the proposed rule change would strengthen ISE’s Obvious Error Rule because it would ensure that parties are not adversely affected by a trade whose terms were never fully communicated to them as a result of a system outage. As a matter of ‘‘housekeeping,’’ the Exchange also proposes to renumber ISE Rule 720(e) as ISE Rule 720(d). hsrobinson on PROD1PC69 with NOTICES III. Discussion The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange 7 and, in particular, the requirements of Section 6(b) of the Act 8 and the rules and regulations thereunder. Specifically, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act,9 in that it is designed to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with 5 A trade execution report is an ISE system message sent to all parties to a trade to inform them that a trade has been consummated. Among other things, a trade execution report contains pertinent details such as the underlying security, the price, number of contracts traded, the strike price and the expiration date. 6 See, Amendment No. 1, supra note 3. 7 In approving this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 15:20 Aug 02, 2006 Jkt 208001 respect to, and facilitating transaction in securities, to remove impediments to and perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. The Commission considers that in most circumstances trades that are executed between parties should be honored. On rare occasions, the circumstances surrounding an execution suggest that it is unrealistic to expect that the parties to the trade had come to a meeting of the minds regarding the terms of the transaction. In the Commission’s view, the determination of whether an ‘‘obvious error’’ has occurred should be based on specific and objective criteria and subject to specific and objective procedures. Under ISE’s proposal, unless all parties to a trade agree otherwise, ISE Market Control may nullify a trade if all parties to the trade fail to receive a trade execution report due to a verifiable system outage. The Commission believes that ISE’s proposal provides specific and objective criteria to be used by the Exchange to nullify a trade in this circumstance. Accordingly, the Commission finds that the Exchange’s proposal is consistent with the Act. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,10 that the proposed rule change (SR–ISE–2006– 14), as amended, is approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 J. Lynn Taylor, Assistant Secretary. [FR Doc. E6–12526 Filed 8–2–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54163A; File No. SR– NSCC–2006–06] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Enhancements to ACATS-Fund/SERV Processing Capabilities July 28, 2006. Correction In Release No. 34–54163, FR Doc. E6– 11681, revise the words ‘‘delivering 10 15 11 17 PO 00000 U.S.C. 78f(b)(2). CFR 200.30–3(a)(12). Frm 00055 Fmt 4703 Sfmt 4703 44067 member’’ to read ‘‘relevant mutual fund’’ in each of the following places: a. page 41852, second column, fourth paragraph, tenth line; b. page 41852, third column, first paragraph, third line; c. page 41852, third column, second paragraph, fourteenth line; d. page 41852, third column, second paragraph, twenty-first line; e. page 41853, first column, second full paragraph, ninth line; and. f. page 41853, first column, second full paragraph, twelfth line. For the Commission by the Division of Market Regulation, pursuant to delegated authority.1 J. Lynn Taylor, Assistant Secretary. [FR Doc. E6–12501 Filed 8–2–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54237; File No. SR–Phlx– 2006–39] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Conforming Changes to Its By-Laws July 28, 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 July 21, 2006, the Philadelphia Stock Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) 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 the Phlx. The Phlx has designated this proposal as one concerned solely with the administration of the Exchange under Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(3) 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 Substance of the Proposed Rule Change The Exchange proposes to amend various provisions of its By-Laws (‘‘By1 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(3). 1 15 E:\FR\FM\03AUN1.SGM 03AUN1 44068 Federal Register / Vol. 71, No. 149 / Thursday, August 3, 2006 / Notices Laws’’) to conform the usage of terms contained in, and to make technical corrections to, the By-Laws. The text of the proposed rule change is set forth below, with italics indicating new text and [brackets] indicating deletions. * * * * * ARTICLE IV Board of Governors Vacancies in Standing Committees—Ad Interim Appointments [Amendment. August 22, 1997 (97–31).] [(a)] In the exercise of its powers it may adopt such rules, issue such orders and directions and make such decisions as it may deem appropriate. SEC. 4.4 (b) No Change * * * * * Number and Composition Vacancies SEC. 4–1. The management of the business and affairs of the Exchange shall be vested in the Board of Governors. The Board of Governors shall be composed of the Chairman of the Board of Governors, who shall be the individual then holding the office of the Chief Executive Officer of the Exchange and twenty-two (22) other Governors consisting of: two (2) Governors who are Member Governors who meet the qualifications set forth in By-Law Article [1] I, Section 1–1 with respect to Member Governors; one (1) Governor who is a PBOT Governor who meets the qualifications set forth in ByLaw Article [1] I, Section 1–1 with respect to the PBOT Governor; six (6) Governors who are Stockholder Governors who meet the qualifications set forth in By-Law Article [1] I, Section 1–1 with respect to Stockholder Governors; twelve (12) Governors who are Independent Governors who meet the qualifications set forth in By-Law Article [1] I, Section 1–1 with respect to Independent Governors and one (1) Governor who is the Vice-Chairman of the Board of Governors who meets the qualifications set forth in By-Law Article V, Section 5–2 with respect to the Vice-Chairman. * * * * * SEC. 4–7. Vacancies in the Board of Governors, including vacancies resulting from [from] the resignation of any Governors or an increase in the number of Governors, shall be filled by the Nominating, [and] Elections and Governance Committee, subject to approval by a majority of the Governors then in office, although less than a quorum, or by a sole remaining Governor, and each person so elected shall be a Governor until his successor is elected and qualified or until his earlier resignation or removal. hsrobinson on PROD1PC69 with NOTICES Duties and Powers SEC. 4–4. (a)—The Board of Governors shall be vested with all the powers necessary for the management of the business and affairs of the Exchange, the regulation of the business conduct of Members, participants, Member Organizations, and participant organizations, and persons associated with such organizations and for the promotion of the welfare, objects and purposes of the Exchange, and in addition to the power and authority conferred by these By-Laws, may exercise all powers of the Exchange and do all such lawful acts and things as are not by statute, these By-Laws or the Certificate of Incorporation directed or required to be exercised or done by the Stockholders. VerDate Aug<31>2005 15:20 Aug 02, 2006 Jkt 208001 Disqualification of Governors SEC. 4–8. (a)–(b)—No change. (c) The last sentence of subsection (a) of this Section shall not apply when the interest of the relevant person is derived solely from being part of the general membership or of a class of [m]Members, unless their impartiality might reasonably be questioned. * * * * * ARTICLE X Standing Committees SEC. 10–4. The Executive Committee shall appoint, subject to the approval of the Board of Governors, a person to fill any vacancy other than Chairman occurring in any Standing Committee except the Nominating, [and] Elections and Governance Committee and the Executive Committee. Should special exigencies require, the Chairman of the Board of Governors may fill any such vacancy ad interim until the next regular meeting of the Board of Governors. * * * * * Nominating, Elections and Governance Committee SEC. 10–19. (a)–(h)—No change. (i) The names of the persons nominated by the Nominating, [and] Elections and Governance Committee shall be identified on the ballot by an appropriate legend or symbol. In the event that there are more nominations of persons [in the categories of On-Floor and Off-Floor Governor] than there are vacancies on the Board of Governors which may be filled by such persons, the number of such persons who may be elected to serve on the Board of Governors in each category shall also be indicated on the ballot. * * * * * Standing Committees ARTICLE XI SEC. 10–1 (a) The Standing Committees of the Exchange shall consist of: an Executive Committee, an Admissions Committee, an Allocation, Evaluation and Securities Committee, an Audit Committee, an Automation Committee, a Business Conduct Committee, a Compensation Committee, a Finance Committee, a Floor Procedure Committee, a Foreign Currency Options Committee, a Marketing Committee, a Nominating, [and] Elections and Governance Committee, a Quality of Markets Committee, and an Options Committee. Each of such Committees shall be composed of not more than nine (9) members, including ex-officio members, except for the Floor Procedure Committee, the Options Committee, and the Foreign Currency Options Committee, which shall each consist of not more than twelve (12) members, including ex-officio members. The Chairman of each Standing Committee shall be a member of the Board of Governors and at least one other person on each Committee shall be a Governor. * * * * * When Allowed PO 00000 Frm 00056 Fmt 4703 Sfmt 4703 Appeals SEC. 11–1. (a)—No change. (b) Notwithstanding the foregoing, any appeal from a decision of the Nominating, [and] Elections and Governance Committee regarding the eligibility of any candidate for election to the Board of Governors shall be heard by a special committee of the Board of Governors composed of not less than a majority of all Governors who are not then candidates for office on the Board of Governors. An affected candidate or interested party may appeal by filing a written notice thereof with the Secretary of the Exchange within seven (7) days after a decision. Said notice shall also state the reasons for his appeal and the relief requested. He may appear before the special committee and present arguments concerning the decision. An appropriate record shall be kept. The decision of the special committee shall be final. (c)—No change. * * * * * E:\FR\FM\03AUN1.SGM 03AUN1 Federal Register / Vol. 71, No. 149 / Thursday, August 3, 2006 / Notices ARTICLE XV Transfer of Foreign Currency Options Participations Transfer of Foreign Currency Options Participations Transfer of Equitable Title A transfer of equitable title only to a foreign currency options participation shall be made upon submission of the name of the transferor and the transferee thereof to the Admissions Committee. A transfer may not be effected pursuant to a lease agreement. Notice of this transfer shall be posted upon the website of the Exchange and shall also appear in the Weekly Bulletin mailed to the [m]Members and/or foreign currency options participants at least seven (7) days in advance of the transfer’s effective date. Notice of the proposed transfer shall specify the date on which the proposed transfer will become effective. * * * * * SEC. 15–2. * * * 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 Phlx included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposal. 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 Contracts of Transferor * payment of such sums that are or may become due to the claimants pursuant to these By-Laws and the rules of the Exchange. The decision of the Board of Governors shall be in writing and sent to the parties to the proceeding respecting the determination of claims. * * * * * * Effect of Involuntary Transfers 1. Purpose Notice of a transfer to be made pursuant to a sale of a foreign currency options participation by the Admissions Committee shall be sent to the [m]Members and the foreign currency options participants as in the case of a voluntary transfer, and shall have the same effect in respect to open contracts and unmatured debts and obligations of the foreign currency options participant or former foreign currency options participant as in the case of a voluntary transfer. The Exchange represents that the purpose of the proposed rule change is to make minor, technical adjustments to certain By-Laws, in order to conform them to the current By-Laws as amended recently by SR–Phlx–2005– 93.5 The Exchange represents that the proposed amendments are administrative in nature and are only intended to add consistency to the rules in terms of form. The term ‘‘member’’ is being capitalized in certain places to clarify the intended meaning of the term. The Exchange represents that the purpose of this amendment is not to change the intent of its meaning within the ByLaws, but rather to clarify the intended meaning by capitalizing the term in relevant places. The capitalization should differentiate between intended references to the term ‘‘Member’’ as defined in Phlx Rule 2 6 from the term ‘‘member’’ as used in other contexts.7 The Exchange represents that this amendment does not intend to substantively amend the By-Laws, but Disposition of Proceeds of Sale of Foreign Currency Options Participation * SEC. 15–3. * * * * hsrobinson on PROD1PC69 with NOTICES Determination of Claims An Advisory Committee of (3) Governors, of whom at least two (2) shall be Independent Governors, shall be appointed by the Chairman of the Board of Governors to examine the validity of claims asserted against the [m]Members or the foreign currency options participants and give an advisory opinion to the Board of Governors thereon. The examination of the validity of the claims shall be made upon written submission of claimants and respondents with provision for these parties to request oral argument before the Advisory Committee. The Board of Governors, based upon the written record before the Advisory Committee, shall determine the VerDate Aug<31>2005 15:20 Aug 02, 2006 Jkt 208001 5 See Securities Exchange Act Release No. 53734 (April 27, 2006), 71 FR 26589 (May 5, 2006). 6 Phlx Rule 2 states, ‘‘The term ‘‘Member’’ means a permit holder which has not been terminated in accordance with the by-laws and these rules of the Exchange.’’ 7 For example, the By-Laws use the term ‘‘member’’ to refer to members of a committee. The Exchange represents that the proposed rule change would not amend references to the term ‘‘member’’ in the Exchange’s Certificate of Incorporation. PO 00000 Frm 00057 Fmt 4703 Sfmt 4703 44069 only to correct inadvertent omissions in the previously referenced filing. The term ‘‘Governance’’ was previously added to the title of the Nominating and Elections Committee in the previously referenced filing.8 The failure to include the term ‘‘Governance’’, when referencing this Committee in certain places, was an inadvertent omission in the previously referenced filing. The proposed amendments will provide consistency throughout the By-Laws when referring to this Committee. The Exchange proposes to remove the references to ‘‘Off-Floor Governor’’ and ‘‘On-Floor Governor’’ as these terms no longer have a defined meaning in the By-Laws. The terms ‘‘Off-Floor Governor’’ and ‘‘On-Floor Governor’’ were removed from the By-Laws by a previous rule filing.9 The Exchange represents that the remaining references to these terms in the specified By-Laws was an inadvertent oversight. The removal of these terms should provide clarity to the existing language in these By-Laws. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 10 in general, and furthers the objectives of Section 6(b)(5) of the Act 11 in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest, by maintaining consistency in the terms referenced throughout the By-Laws and the intended usage of defined terms. 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 No written comments were either solicited or received. 8 See Securities Exchange Act Release No. 53734, supra note 5. 9 See id. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(5). E:\FR\FM\03AUN1.SGM 03AUN1 44070 Federal Register / Vol. 71, No. 149 / Thursday, August 3, 2006 / Notices III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act,12 and paragraph (f)(3) of Rule 19b–4 thereunder 13 because the Phlx has designated it as being concerned solely with the administration of the Exchange. 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.14 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 Number SR–Phlx–2006–39 on the subject line. provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room. Copies of such filing also will be available for inspection and copying at the Phlx. 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–Phlx–2006–39 and should be submitted on or before August 24, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.15 Jill M. Peterson, Assistant Secretary. [FR Doc. E6–12520 Filed 8–2–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54233; File No. SR–Phlx– 2006–44] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change To Extend the Linkage Fee Pilot Program July 27, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 • Send paper comments in triplicate notice is hereby given that on July 17, to Nancy M. Morris, Secretary, 2006, the Philadelphia Stock Exchange, Securities and Exchange Commission, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with 100 F Street, NE., Washington, DC the Securities and Exchange 20549–1090. Commission (‘‘Commission’’) the All submissions should refer to File proposed rule change as described in Number SR–Phlx–2006–39. This file Items I and II below, which Items have number should be included on the been prepared by the Exchange. The subject line if e-mail is used. To help the Commission is publishing this notice to Commission process and review your solicit comments on the proposed rule comments more efficiently, please use change from interested persons and is only one method. The Commission will approving the proposal on an post all comments on the Commission’s accelerated basis for a pilot period Internet Web site (http://www.sec.gov/ through July 31, 2007. rules/sro.shtml). Copies of the I. Self-Regulatory Organization’s submission, all subsequent Statement of the Terms of Substance of amendments, all written statements the Proposed Rule Change with respect to the proposed rule change that are filed with the The Phlx proposes to extend, for a Commission, and all written one-year period, a pilot relating to communications relating to the transaction fees applicable to the proposed rule change between the execution of Principal Acting as Agent Commission and any person, other than Orders (‘‘P/A Orders’’) 3 and Principal those that may be withheld from the public in accordance with the 15 17 CFR 200.30–3(a)(12). hsrobinson on PROD1PC69 with NOTICES Paper Comments 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 A P/A Order is an order for the principal account of a specialist reflecting the terms of a 15 U.S.C. 78s(b)(3)(A)(iii). 13 17 CFR 240.19b–4(f)(3). 14 See 15 U.S.C. 78s(b)(3)(C). 12 VerDate Aug<31>2005 15:20 Aug 02, 2006 2 17 Jkt 208001 PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 Orders (‘‘P Orders’’) 4 sent to the Exchange via the Intermarket Option Linkage (‘‘Linkage’’) under the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage (the ‘‘Plan’’).5 The Exchange proposes to extend the pilot through July 31, 2007. The text of the proposed rule change is available on the Phlx’s Web site at (http://www.phlx.com), at the Exchange’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 and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to extend the current pilot program for one year, through July 31, 2007. The Exchange currently charges $0.25 per option contract for P Orders sent to the Exchange via Linkage under the Plan. The Exchange currently charges $0.15 per option contract for P/A Orders. By extending the current pilot program, the Exchange should remain competitive with other exchanges that charge fees for P and P/A Orders.6 related unexecuted Public Customer order for which the specialist is acting as agent. See Phlx Rule 1083(k)(i). 4 A P Order is an order for the principal account of an Eligible Market Maker and is not a P/A Order. See Phlx Rule 1083(k)(ii). 5 See Securities Exchange Act Release Nos. 44482 (June 27, 2001), 66 FR 35470 (July 5, 2001) (Amendment to Plan to Conform to the Requirements of Securities Exchange Act Rule 11Ac1–7); 43573 (November 16, 2000), 65 FR 70851 (November 28, 2000) (Notice of Phlx Joining the Plan); and 43086 (July 28, 2000), 65 FR 48023 (August 4, 2000) (Approval of the Plan). 6 See Securities Exchange Act Release Nos. 52168 (July 29, 2005), 70 FR 45454 (August 5, 2005) (SR– ISE–2005–32); 52147 (July 28, 2005), 70 FR 44706 (August 3, 2005) (SR–BSE–2005–25); 52151 (July 28, 2005), 70 FR 44713 (August 3, 2005) (SR–PCX– 2005–86); 52073 (July 20, 2005), 70 FR 43474 (July 27, 2005) (SR–CBOE–2005–54). See also Securities Exchange Act Release No. 54064 (June 28, 2006), 71 FR 38438 (July 6, 2006) (SR–CBOE–2006–59). E:\FR\FM\03AUN1.SGM 03AUN1

Agencies

[Federal Register Volume 71, Number 149 (Thursday, August 3, 2006)]
[Notices]
[Pages 44067-44070]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-12520]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54237; File No. SR-Phlx-2006-39]


Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to Conforming Changes to Its By-Laws

July 28, 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 July 21, 2006, the Philadelphia Stock Exchange, Inc. (``Phlx'' or 
``Exchange'') 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 the Phlx. The Phlx has 
designated this proposal as one concerned solely with the 
administration of the Exchange under Section 19(b)(3)(A)(iii) of the 
Act \3\ and Rule 19b-4(f)(3) 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)(iii).
    \4\ 17 CFR 240.19b-4(f)(3).
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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 various provisions of its By-Laws 
(``By-

[[Page 44068]]

Laws'') to conform the usage of terms contained in, and to make 
technical corrections to, the By-Laws. The text of the proposed rule 
change is set forth below, with italics indicating new text and 
[brackets] indicating deletions.
* * * * *
ARTICLE IV Board of Governors
Number and Composition
    SEC. 4-1. The management of the business and affairs of the 
Exchange shall be vested in the Board of Governors. The Board of 
Governors shall be composed of the Chairman of the Board of Governors, 
who shall be the individual then holding the office of the Chief 
Executive Officer of the Exchange and twenty-two (22) other Governors 
consisting of: two (2) Governors who are Member Governors who meet the 
qualifications set forth in By-Law Article [1] I, Section 1-1 with 
respect to Member Governors; one (1) Governor who is a PBOT Governor 
who meets the qualifications set forth in By-Law Article [1] I, Section 
1-1 with respect to the PBOT Governor; six (6) Governors who are 
Stockholder Governors who meet the qualifications set forth in By-Law 
Article [1] I, Section 1-1 with respect to Stockholder Governors; 
twelve (12) Governors who are Independent Governors who meet the 
qualifications set forth in By-Law Article [1] I, Section 1-1 with 
respect to Independent Governors and one (1) Governor who is the Vice-
Chairman of the Board of Governors who meets the qualifications set 
forth in By-Law Article V, Section 5-2 with respect to the Vice-
Chairman.
* * * * *
Duties and Powers
    SEC. 4-4. (a)--The Board of Governors shall be vested with all the 
powers necessary for the management of the business and affairs of the 
Exchange, the regulation of the business conduct of Members, 
participants, Member Organizations, and participant organizations, and 
persons associated with such organizations and for the promotion of the 
welfare, objects and purposes of the Exchange, and in addition to the 
power and authority conferred by these By-Laws, may exercise all powers 
of the Exchange and do all such lawful acts and things as are not by 
statute, these By-Laws or the Certificate of Incorporation directed or 
required to be exercised or done by the Stockholders.
[Amendment.
August 22, 1997 (97-31).]
    [(a)] In the exercise of its powers it may adopt such rules, issue 
such orders and directions and make such decisions as it may deem 
appropriate.
    SEC. 4.4 (b) No Change
* * * * *
Vacancies
    SEC. 4-7. Vacancies in the Board of Governors, including vacancies 
resulting from [from] the resignation of any Governors or an increase 
in the number of Governors, shall be filled by the Nominating, [and] 
Elections and Governance Committee, subject to approval by a majority 
of the Governors then in office, although less than a quorum, or by a 
sole remaining Governor, and each person so elected shall be a Governor 
until his successor is elected and qualified or until his earlier 
resignation or removal.
Disqualification of Governors
    SEC. 4-8. (a)-(b)--No change.
    (c) The last sentence of subsection (a) of this Section shall not 
apply when the interest of the relevant person is derived solely from 
being part of the general membership or of a class of [m]Members, 
unless their impartiality might reasonably be questioned.
* * * * *
ARTICLE X Standing Committees
Standing Committees
    SEC. 10-1 (a) The Standing Committees of the Exchange shall consist 
of: an Executive Committee, an Admissions Committee, an Allocation, 
Evaluation and Securities Committee, an Audit Committee, an Automation 
Committee, a Business Conduct Committee, a Compensation Committee, a 
Finance Committee, a Floor Procedure Committee, a Foreign Currency 
Options Committee, a Marketing Committee, a Nominating, [and] Elections 
and Governance Committee, a Quality of Markets Committee, and an 
Options Committee. Each of such Committees shall be composed of not 
more than nine (9) members, including ex-officio members, except for 
the Floor Procedure Committee, the Options Committee, and the Foreign 
Currency Options Committee, which shall each consist of not more than 
twelve (12) members, including ex-officio members. The Chairman of each 
Standing Committee shall be a member of the Board of Governors and at 
least one other person on each Committee shall be a Governor.
* * * * *
Vacancies in Standing Committees--Ad Interim Appointments
    SEC. 10-4. The Executive Committee shall appoint, subject to the 
approval of the Board of Governors, a person to fill any vacancy other 
than Chairman occurring in any Standing Committee except the 
Nominating, [and] Elections and Governance Committee and the Executive 
Committee. Should special exigencies require, the Chairman of the Board 
of Governors may fill any such vacancy ad interim until the next 
regular meeting of the Board of Governors.
* * * * *
Nominating, Elections and Governance Committee
    SEC. 10-19. (a)-(h)--No change.
    (i) The names of the persons nominated by the Nominating, [and] 
Elections and Governance Committee shall be identified on the ballot by 
an appropriate legend or symbol. In the event that there are more 
nominations of persons [in the categories of On-Floor and Off-Floor 
Governor] than there are vacancies on the Board of Governors which may 
be filled by such persons, the number of such persons who may be 
elected to serve on the Board of Governors in each category shall also 
be indicated on the ballot.
* * * * *
ARTICLE XI Appeals
When Allowed
    SEC. 11-1. (a)--No change.
    (b) Notwithstanding the foregoing, any appeal from a decision of 
the Nominating, [and] Elections and Governance Committee regarding the 
eligibility of any candidate for election to the Board of Governors 
shall be heard by a special committee of the Board of Governors 
composed of not less than a majority of all Governors who are not then 
candidates for office on the Board of Governors. An affected candidate 
or interested party may appeal by filing a written notice thereof with 
the Secretary of the Exchange within seven (7) days after a decision. 
Said notice shall also state the reasons for his appeal and the relief 
requested. He may appear before the special committee and present 
arguments concerning the decision. An appropriate record shall be kept. 
The decision of the special committee shall be final.
    (c)--No change.
* * * * *

[[Page 44069]]

ARTICLE XV Transfer of Foreign Currency Options Participations
Transfer of Foreign Currency Options Participations
Transfer of Equitable Title
    A transfer of equitable title only to a foreign currency options 
participation shall be made upon submission of the name of the 
transferor and the transferee thereof to the Admissions Committee. A 
transfer may not be effected pursuant to a lease agreement. Notice of 
this transfer shall be posted upon the website of the Exchange and 
shall also appear in the Weekly Bulletin mailed to the [m]Members and/
or foreign currency options participants at least seven (7) days in 
advance of the transfer's effective date. Notice of the proposed 
transfer shall specify the date on which the proposed transfer will 
become effective.
* * * * *
Contracts of Transferor
    SEC. 15-2.
* * * * *
Effect of Involuntary Transfers
    Notice of a transfer to be made pursuant to a sale of a foreign 
currency options participation by the Admissions Committee shall be 
sent to the [m]Members and the foreign currency options participants as 
in the case of a voluntary transfer, and shall have the same effect in 
respect to open contracts and unmatured debts and obligations of the 
foreign currency options participant or former foreign currency options 
participant as in the case of a voluntary transfer.
Disposition of Proceeds of Sale of Foreign Currency Options 
Participation
    SEC. 15-3.
* * * * *
Determination of Claims
    An Advisory Committee of (3) Governors, of whom at least two (2) 
shall be Independent Governors, shall be appointed by the Chairman of 
the Board of Governors to examine the validity of claims asserted 
against the [m]Members or the foreign currency options participants and 
give an advisory opinion to the Board of Governors thereon. The 
examination of the validity of the claims shall be made upon written 
submission of claimants and respondents with provision for these 
parties to request oral argument before the Advisory Committee. The 
Board of Governors, based upon the written record before the Advisory 
Committee, shall determine the payment of such sums that are or may 
become due to the claimants pursuant to these By-Laws and the rules of 
the Exchange. The decision of the Board of Governors shall be in 
writing and sent to the parties to the proceeding respecting the 
determination of claims.
* * * * *

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 Phlx included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposal. 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 Exchange represents that the purpose of the proposed rule 
change is to make minor, technical adjustments to certain By-Laws, in 
order to conform them to the current By-Laws as amended recently by SR-
Phlx-2005-93.\5\ The Exchange represents that the proposed amendments 
are administrative in nature and are only intended to add consistency 
to the rules in terms of form.
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    \5\ See Securities Exchange Act Release No. 53734 (April 27, 
2006), 71 FR 26589 (May 5, 2006).
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    The term ``member'' is being capitalized in certain places to 
clarify the intended meaning of the term. The Exchange represents that 
the purpose of this amendment is not to change the intent of its 
meaning within the By-Laws, but rather to clarify the intended meaning 
by capitalizing the term in relevant places. The capitalization should 
differentiate between intended references to the term ``Member'' as 
defined in Phlx Rule 2 \6\ from the term ``member'' as used in other 
contexts.\7\ The Exchange represents that this amendment does not 
intend to substantively amend the By-Laws, but only to correct 
inadvertent omissions in the previously referenced filing.
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    \6\ Phlx Rule 2 states, ``The term ``Member'' means a permit 
holder which has not been terminated in accordance with the by-laws 
and these rules of the Exchange.''
    \7\ For example, the By-Laws use the term ``member'' to refer to 
members of a committee. The Exchange represents that the proposed 
rule change would not amend references to the term ``member'' in the 
Exchange's Certificate of Incorporation.
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    The term ``Governance'' was previously added to the title of the 
Nominating and Elections Committee in the previously referenced 
filing.\8\ The failure to include the term ``Governance'', when 
referencing this Committee in certain places, was an inadvertent 
omission in the previously referenced filing. The proposed amendments 
will provide consistency throughout the By-Laws when referring to this 
Committee.
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    \8\ See Securities Exchange Act Release No. 53734, supra note 5.
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    The Exchange proposes to remove the references to ``Off-Floor 
Governor'' and ``On-Floor Governor'' as these terms no longer have a 
defined meaning in the By-Laws. The terms ``Off-Floor Governor'' and 
``On-Floor Governor'' were removed from the By-Laws by a previous rule 
filing.\9\ The Exchange represents that the remaining references to 
these terms in the specified By-Laws was an inadvertent oversight. The 
removal of these terms should provide clarity to the existing language 
in these By-Laws.
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    \9\ See id.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \10\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \11\ in particular, in that it is designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general to protect investors and the public 
interest, by maintaining consistency in the terms referenced throughout 
the By-Laws and the intended usage of defined terms.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

[[Page 44070]]

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change has become effective pursuant to 
Section 19(b)(3)(A)(iii) of the Act,\12\ and paragraph (f)(3) of Rule 
19b-4 thereunder \13\ because the Phlx has designated it as being 
concerned solely with the administration of the Exchange. 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.\14\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(3).
    \14\ See 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-Phlx-2006-39 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 20549-1090.

All submissions should refer to File Number SR-Phlx-2006-39. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room. Copies of such 
filing also will be available for inspection and copying at the Phlx. 
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-Phlx-2006-39 
and should be submitted on or before August 24, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6-12520 Filed 8-2-06; 8:45 am]
BILLING CODE 8010-01-P