regulatory organizations; proposed rule changes: Philadelphia Stock Exchange, Inc.,
[Federal Register: July 11, 2001 (Volume 66, Number 133)]
[Notices]
[Page 36355-36357]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11jy01-154]
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-44505; File No. SR-Phlx-2001-54]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the Philadelphia Stock Exchange, Inc. To Eliminate the Requirement That the Three Core Members of the Equity and Options Allocation, Evaluation, and Securities Committees Who Conduct a Public Securities Business Be the Same People for Both Committees
July 3, 2001.
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 May 16, 2001, the Philadelphia Stock Exchange, Inc. (``Phlx'' or ``Exchange'') filedwith 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 Exchange. 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.
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Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Phlx proposes to amend Phlx rule 500(a)(iii), Equity Allocation, Evaluation and Securities Committee and Options Allocation, Evaluation and Securities Committee (the ``Committee'' or ``Committees''), which establishes the composition of the Committees, to eliminate the requirement that the three core members of the Committees who conduct a public securities business be the same people for both Committees.\3\ The following is the text of the proposed rule change. Proposed additions are italicized and proposed deletions are in brackets. * * * * *
\3\ On July 5, 2000, the Commission approved a proposed rule change, which divided the Phlx Allocation, Evaluation and Securities Committee into two separate committees, one for equities and one for options. See Securities Exchange Act Release No. 43011 (July 5, 2000), 65 FR 34521 (May 30, 2000).
Rule 500. Equity Allocation, Evaluation and Securities Committee and Options Allocation, Evaluation and Securities Committee.
The Equity Allocation, Evaluation and Securities Committee and the Options Allocation, Evaluation and Securities Committee, respectively, shall administer Rules 500 through 599, where applicable, and unless indicated otherwise, these rules shall apply to both option and equity specialist evaluations and allocations. For the purpose of Rules 500 through 599, the term ``Committee'' shall mean either the Equity Allocation, Evaluation and Securities Committee or the Options Allocation, Evaluation and Securities Committee, where applicable.
(a) Composition.
(i) The core members of the Equity Allocation, Evaluation and Securities Committee shall be three persons who conduct a public securities business, and two persons who are active on the equity trading floor as a specialist or floor broker. The annual members of the Equity Allocation, Evaluation and Securities Committee shall be two persons who are active on the equity trading floor as a specialist or floor broker, one public Governor and one non-industry Governor.
(ii) The core members of the Options Allocation, Evaluation and Securities Committee shall be three persons who conduct a public securities business, one person who is active on the options trading floor as a floor broker, and one person who is active on the options trading floor as a specialist, registered options trader, or floor broker. The
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annual members of the Options Allocation, Evaluation and Securities Committee shall be two persons who are active on the options trading floor as a specialist, registered options trader, or floor broker, one public Governor and one non-industry Governor.
(iii) [The three persons who conduct a public securities business and t]The public Governor and non-industry Governor, as set forth in Sections (i) and (ii) above shall be the same persons, and shall be members of both the Equity Allocation, Evaluation and Securities Committee and the Options Allocation, Evaluation and Securities Committee.
(b) Where circumstances warrant, the Committee may determine to consult with the Floor Procedure Committee, Options Committee or Foreign Currency Options Committee. * * * * *
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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 proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Phlx has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statement.
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Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
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Purpose
The purpose of the proposed rule change is to eliminate the requirement that the three core members of the Committees who conduct a public securities business be the same people for both Committees. Rule 500 requires that the three core members of both Committees who conduct a public securities business be the same people. The proposed amendment to Rule 500 would eliminate this requirement and thereby permit the Committees to have core members who conduct a public securities business in options or equities to serve only on the Committee in which they conduct their particular type of securities business.
Each Committee is responsible for appointment of specialist units on the floor; \4\ for approving the transfer of equities or options among specialist units on each floor; \5\ for allocating equities or options to applicant specialist units on each floor; \6\ for evaluating the performance of specialist units on each floor; \7\ for reallocating equities or options when warranted due to performance issues from one specialist unit to another; \8\ and for supervising over questions pertaining to securities admitted to dealings on the Exchange.\9\
\4\ See Phlx Rule 510.
\5\ See Phlx Rule 508.
\6\ See Phlx Rule 511(b).
\7\ See Phlx Rules 511(c)-(d) and 515.
\8\ See Phlx Rules 511(b)-(e) and 515.
\9\ See Phlx Rules 800-899.
The Exchange believes that by permitting the three core members of both Committees who conduct public securities business to be different people, both Committees should benefit from the specific options or equities industry expertise and experience that those members possess and can bring to each committee. This would serve to provide added expertise on each committee in allocating securities to, and evaluating performance of, specialist units on the trading floor on which the Committee member works and has experience. Currently, the three core members who conduct a public securities business are the same on each Committee regardless of whether their particular experience is limited to either equities or options. Under the proposal, the three core members who conduct a public securities business on the Committees would consist of members with experience specific to the type of securities to be allocated, and in the type of specialists to be evaluated. 2. Statutory Basis
The Exchange believes the proposed rule change is consistent with Section 6 of the Act \10\ in general, and with Sections 6(b)(5) \11\ of the Act in particular, because it is designed to perfect the mechanisms of a free and open market and a national market system, to promote just and equitable principles of trade, and to protect investors and the public interest, by organizing the Committees to have core members who conduct a public securities business in options or equities to serve only on the Committee in which they conduct their particular type of securities business, thereby, permitting members with specific industry expertise to be a member of only that particular Committee.
\10\ 15 U.S.C. 78f.
\11\ 15 U.S.C. 78f(b)(5).
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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.
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Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others
The Phlx has neither solicited nor received written comments with respect to the proposed rule change.
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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 Exchange consents, the Commission will;
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule change should be disapproved.
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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. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filedwith the Commission and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of the Phlx. All submissions should refer to File No. SR-Phlx-2001-54 and should be submitted by August 1, 2001.
\12\ 17 CFR 200.30-3(a)(12).
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For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\12\ Margaret H. McFarland, Deputy Secretary.
[FR Doc. 01-17303Filed7-10-01; 8:45 am]
BILLING CODE 8010-01-M
