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]
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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).
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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
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U.S.C. 78f(b)(2).
CFR 200.30–3(a)(12).
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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
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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.
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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
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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.
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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.
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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.
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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.
*
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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.
*
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*
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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.
*
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*
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.
*
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When Allowed
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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.
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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.
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SEC. 15–2.
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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.
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*
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
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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.
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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).
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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 (https://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 (https://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
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2 17
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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
(https://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.
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\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.
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\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 (https://
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 (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 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
