Self-Regulatory Organizations; Stock Clearing Corporation of Philadelphia; Notice of Filing of a Proposed Rule Change Relating to the Definition of a Margin Member, 57598-57599 [E6-15984]

Download as PDF 57598 Federal Register / Vol. 71, No. 189 / Friday, September 29, 2006 / Notices jlentini on PROD1PC65 with NOTICES provisions of Section 6(b)(5),15 in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in, securities, 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. The Linkage Plan, the purpose of which is to enable its participants to act jointly in planning, developing, operating and regulating the NMS Linkage System electronically linking the Linkage Plan Participant Markets to one another, is expected to become operative on October 1, 2006. The Linkage Plan provides for a mechanism for charging for orders executed in each Participant Market using the information about a clearing or Sponsoring Member. Certain markets have indicated that they may be unable to supply clearing or Sponsoring Member information on orders routed through the Linkage to other markets, thus under the proposed rule change, which the Commission understands will be adopted by each of the Linkage Plan participants, the participants have agreed to bill each other directly, based on data supplied by SIAC. The Exchange has requested that the Commission approve the proposed rule change, as amended, on an accelerated basis. The Exchange notes that the Linkage Plan participants expect the Linkage Plan to become operative on October 1, 2006, and that accelerated approval would permit the Exchange to implement exchange to exchange billing procedures at the start of the Linkage Plan’s operation, allowing Linkage Plan participants who do not have a Sponsoring Member at each destination market, to use the Linkage Plan and pay fees directly to the other Linkage Plan participant.16 The Commission finds good cause, pursuant to Section 19(b)(2) of the Act,17 for approving the proposed rule change, as amended, prior to the thirtieth day after the date of publication of notice in the Federal Register. Granting accelerated approval would permit the Exchange to implement exchange to exchange billing 15 15 U.S.C. 78f(b)(5). Commission understands that each of the Linkage Plan participants will file a proposed rule change similar to this one. To date, the Amex and the Phlx have done so. See file nos. SR–Amex– 2006–85 and SR–Phlx–2006–58. 17 See id. 16 The VerDate Aug<31>2005 20:43 Sep 28, 2006 Jkt 208001 procedures at the start of the Linkage Plan’s operation enabling Linkage Plan participants who were not able to find a Sponsoring Member at each of the destination markets, to use the Linkage Plan and pay fees directly to another Linkage Plan participant. Accordingly, the Commission finds that there is good cause, consistent with Section 19(b)(2) of the Act,18 to approve the proposed rule change, as amended, on an accelerated basis. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,19 that the proposed rule change, as amended, (SR– NYSE–2006–72) is hereby approved on an accelerated basis. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.20 J. Lynn Taylor, Assistant Secretary. [FR Doc. E6–15986 Filed 9–28–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54488; File No. SR–SCCP– 2006–02] Self-Regulatory Organizations; Stock Clearing Corporation of Philadelphia; Notice of Filing of a Proposed Rule Change Relating to the Definition of a Margin Member September 22, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on August 14, 2006, Stock Clearing Corporation of Philadelphia (‘‘SCCP’’) 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 primarily by SCCP. 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 proposed rule change would amend the definition of ‘‘margin member’’ in SCCP Rule 1, Definitions, to accommodate the proposed introduction of equity Market Makers on the Philadelphia Stock Exchange (‘‘Phlx’’) 18 See id. id. 20 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 19 See PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 and to reflect the proposed introduction of Phlx’s new equity trading system, XLE, which will replace Phlx’s equity trading floor.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, SCCP included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. SCCP has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of such statements.3 (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The purpose of the proposed rule change is to conform SCCP’s Rules to the proposed change that the Phlx is making to its market structure through the introduction of XLE and market makers. Phlx has proposed to eliminate its equity trading floor and to replace it with an electronic trading system, XLE, which will provide for the entry, display, ranking, routing, and execution of orders in NMS stocks 4 for its members and member organizations (‘‘XLE Participants’’). As proposed by Phlx, the current equity specialists would be replaced by market makers, a type of XLE Participant, which would be liquidity providers on XLE.5 SCCP Rule 1, Definitions, currently defines ‘‘margin members’’ as SCCP participants that are Phlx specialists, alternate specialists, or other Phlx floor members specifically approved by the National Securities Clearing Corporation to effect trading in a margin account. Margin members that clear and settle their transactions through SCCP’s ‘‘omnibus clearance and settlement account’’ at NSCC receive margin accounts from SCCP.6 SCCP expects that many of its current margin members 2 Securities Exchange Act Release No. 54329 (August 17, 2006), 71 FR 50482, (August 25, 2006) [File No. SR–Phlx–2006–43]. 3 The Commission has modified parts of these statements. 4 17 CFR 242.600(b)(47). 5 As proposed by Phlx, not every security on XLE will require a market maker. However, if a market maker or multiple market makers choose to register in a security, they must provide a two-sided market in that security on XLE during regular trading hours (usually 9:30 a.m. to 4 p.m.) of the security. Therefore, some securities on XLE may have no market makers or may have one or more market makers. 6 SCCP Rule 9, Margin Accounts. E:\FR\FM\29SEN1.SGM 29SEN1 Federal Register / Vol. 71, No. 189 / Friday, September 29, 2006 / Notices that are Phlx specialists, alternate specialists, or other Phlx floor members would become XLE Participants, including market makers, upon approval of XLE. This proposed rule change would amend the definition of margin member in SCCP’s rules to add the term market maker 7 and to remove the word floor from the term Phlx floor member. This would allow SCCP members that are currently margin members under Rule 1 of SCCP’s rules to maintain their status as margin members following Phlx’s transition to XLE. SCCP believes that the proposed rule change is consistent with Section 17A of the Act 8 because the proposed rule change is designed to allow current SCCP Margin Members to maintain their status as they transition from the current floor based trading environment on Phlx to an electronic trading system, XLE, and would thereby promote the prompt and accurate clearance and settlement of securities transactions and remove impediments to and perfect the mechanism of a national system for the prompt and accurate clearance of securities transactions. (B) Self-Regulatory Organization’s Statement on Burden on Competition SCCP does not believe that the proposed rule change would 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 solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action jlentini on PROD1PC65 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 (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve the proposed rule change, or 7 The proposed rule change File No. SR–Phlx– 2006–43 would define the term ‘‘market maker’’ in Phlx Rule 1, Definitions, paragraph (m). It would also add new rules 170 through 174 to set forth the registration requirements, rights, and obligations of Phlx market makers. 8 15 U.S.C. 78q–1. VerDate Aug<31>2005 20:43 Sep 28, 2006 Jkt 208001 (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: 57599 For the Commission by the Division of Market Regulation, pursuant to delegated authority.9 Nancy M. Morris, Secretary. [FR Doc. E6–15984 Filed 9–28–06; 8:45 am] BILLING CODE 8010–01–P DEPARTMENT OF TRANSPORTATION Surface Transportation Board Electronic Comments [STB Finance Docket No. 34929] • 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–SCCP–2006–02 on the subject line. Jeffrey L. Sutch—Continuance in Control Exemption—SMS Rail Lines of New York, LLC Jeffrey L. Sutch (applicant) has filed a verified notice of exemption to continue in control of SMS Rail Lines of New York, LLC (SMSNY), upon SMSNY’s Paper Comments becoming a Class III rail carrier. The transaction was scheduled to be • Send paper comments in triplicate consummated on or after September 8, to Nancy M. Morris, Secretary, 2006. Securities and Exchange Commission, This transaction is related to the 100 F Street, NE., Washington, DC concurrently filed verified notice of 20549–1090. exemption in STB Finance Docket No. All submissions should refer to File 34928, SMS Rail Lines of New York, Number SR–SCCP–2006–02. This file LLC—Acquisition and Operation number should be included on the Exemption—Northeastern Industrial subject line if e-mail is used. To help the Park, Inc. In that proceeding, SMSNY Commission process and review your seeks to acquire by lease from comments more efficiently, please use Northeastern Industrial Park, Inc., and only one method. The Commission will to operate approximately 15 miles of rail post all comments on the Commission’s line in Albany County, NY. Internet Web site (https://www.sec.gov/ Applicant is a noncarrier that rules/sro.shtml). Copies of the currently controls SMS Rail Service, submission, all subsequent Inc. (SMSRS), a Class III rail carrier. amendments, all written statements Applicant states that: (1) The rail lines with respect to the proposed rule operated by SMSRS do not connect with change that are filed with the the rail line being acquired by lease and Commission, and all written operated by SMSNY; (2) the communications relating to the continuance in control is not part of a proposed rule change between the series of anticipated transactions that Commission and any person, other than would connect the rail line being those that may be withheld from the acquired by lease and operated by public in accordance with the SMSNY with applicant’s rail lines or provisions of 5 U.S.C. 552, will be with those of any other railroad within available for inspection and copying in applicant’s corporate family; and (3) the the Commission’s Public Reference transaction does not involve a Class I Section, 100 F Street, NE., Washington, rail carrier. Therefore, the transaction is DC 20549. Copies of such filing also will exempt from the prior approval be available for inspection and copying requirements of 49 U.S.C. 11323. See 49 at the principal office of SCCP and on CFR 1180.2(d)(2). The purpose of the SCCP’s Web site at https:// transaction is to allow applicant to www.phlx.com/SCCP/ continue in control of SMSNY after memindex_sccpproposals.html. All SMSNY becomes a Class III rail carrier. comments received will be posted Under 49 U.S.C. 10502(g), the Board without change; the Commission does may not use its exemption authority to not edit personal identifying relieve a rail carrier of its statutory information from submissions. You obligation to protect the interests of its should submit only information that employees. Section 11326(c), however, you wish to make available publicly. All does not provide for labor protection for submissions should refer to File transactions under section 11324 and Number SR–SCCP–2006–02 and should 11325 that involve only Class III rail be submitted on or before October 20, 2006. 9 17 CFR 200.30–3(a)(12). PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 E:\FR\FM\29SEN1.SGM 29SEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 71, Number 189 (Friday, September 29, 2006)]
[Notices]
[Pages 57598-57599]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-15984]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54488; File No. SR-SCCP-2006-02]


Self-Regulatory Organizations; Stock Clearing Corporation of 
Philadelphia; Notice of Filing of a Proposed Rule Change Relating to 
the Definition of a Margin Member

 September 22, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on August 14, 2006, Stock 
Clearing Corporation of Philadelphia (``SCCP'') 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 primarily by SCCP. 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change would amend the definition of ``margin 
member'' in SCCP Rule 1, Definitions, to accommodate the proposed 
introduction of equity Market Makers on the Philadelphia Stock Exchange 
(``Phlx'') and to reflect the proposed introduction of Phlx's new 
equity trading system, XLE, which will replace Phlx's equity trading 
floor.\2\
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    \2\ Securities Exchange Act Release No. 54329 (August 17, 2006), 
71 FR 50482, (August 25, 2006) [File No. SR-Phlx-2006-43].
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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, SCCP included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. SCCP has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of such 
statements.\3\
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    \3\ The Commission has modified parts of these statements.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The purpose of the proposed rule change is to conform SCCP's Rules 
to the proposed change that the Phlx is making to its market structure 
through the introduction of XLE and market makers. Phlx has proposed to 
eliminate its equity trading floor and to replace it with an electronic 
trading system, XLE, which will provide for the entry, display, 
ranking, routing, and execution of orders in NMS stocks \4\ for its 
members and member organizations (``XLE Participants''). As proposed by 
Phlx, the current equity specialists would be replaced by market 
makers, a type of XLE Participant, which would be liquidity providers 
on XLE.\5\
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    \4\ 17 CFR 242.600(b)(47).
    \5\ As proposed by Phlx, not every security on XLE will require 
a market maker. However, if a market maker or multiple market makers 
choose to register in a security, they must provide a two-sided 
market in that security on XLE during regular trading hours (usually 
9:30 a.m. to 4 p.m.) of the security. Therefore, some securities on 
XLE may have no market makers or may have one or more market makers.
---------------------------------------------------------------------------

    SCCP Rule 1, Definitions, currently defines ``margin members'' as 
SCCP participants that are Phlx specialists, alternate specialists, or 
other Phlx floor members specifically approved by the National 
Securities Clearing Corporation to effect trading in a margin account. 
Margin members that clear and settle their transactions through SCCP's 
``omnibus clearance and settlement account'' at NSCC receive margin 
accounts from SCCP.\6\ SCCP expects that many of its current margin 
members

[[Page 57599]]

that are Phlx specialists, alternate specialists, or other Phlx floor 
members would become XLE Participants, including market makers, upon 
approval of XLE. This proposed rule change would amend the definition 
of margin member in SCCP's rules to add the term market maker \7\ and 
to remove the word floor from the term Phlx floor member. This would 
allow SCCP members that are currently margin members under Rule 1 of 
SCCP's rules to maintain their status as margin members following 
Phlx's transition to XLE.
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    \6\ SCCP Rule 9, Margin Accounts.
    \7\ The proposed rule change File No. SR-Phlx-2006-43 would 
define the term ``market maker'' in Phlx Rule 1, Definitions, 
paragraph (m). It would also add new rules 170 through 174 to set 
forth the registration requirements, rights, and obligations of Phlx 
market makers.
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    SCCP believes that the proposed rule change is consistent with 
Section 17A of the Act \8\ because the proposed rule change is designed 
to allow current SCCP Margin Members to maintain their status as they 
transition from the current floor based trading environment on Phlx to 
an electronic trading system, XLE, and would thereby promote the prompt 
and accurate clearance and settlement of securities transactions and 
remove impediments to and perfect the mechanism of a national system 
for the prompt and accurate clearance of securities transactions.
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    \8\ 15 U.S.C. 78q-1.
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    SCCP does not believe that the proposed rule change would 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 solicited or 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 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 rule-comments@sec.gov. Please include 
File Number SR-SCCP-2006-02 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-SCCP-2006-02. 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 Section, 100 F Street, 
NE., Washington, DC 20549. Copies of such filing also will be available 
for inspection and copying at the principal office of SCCP and on 
SCCP's Web site at https://www.phlx.com/SCCP/memindex_
sccpproposals.html. 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-SCCP-2006-02 and should be submitted on or before October 20, 2006.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-15984 Filed 9-28-06; 8:45 am]
BILLING CODE 8010-01-P

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