Self-regulatory organizations; proposed rule changes: Pacific Exchange, Inc.,
[Federal Register: October 12, 2005 (Volume 70, Number 196)]
[Notices]
[Page 59385-59386]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12oc05-115]
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52561; File No. SR-PCX-2005-107]
Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rules Regarding Lead Market Maker's Guaranteed Participation in Trades Executed by Public Outcry
October 4, 2005.
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 September 23, 2005, the Pacific Exchange, Inc. (``PCX'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The PCX filed the proposal as a ``non-controversial'' proposed rule change pursuant to Section 19(b)(3)(A)(iii) \3\ of the Act and Rule 19b-4(f)(6) thereunder,\4\ which renders it 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)(6).
-
Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The PCX proposes to amend PCX Rule 6.82(d) to better describe a Lead Market Maker's (``LMM'') guaranteed participation on trades that are executed via public outcry. The text of the proposed rule change, is available on the PCX's Web site (http://www.pacificex.com), at the
PCX's principal office, and at the Commission's Public Reference Room.
-
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 those statements may be examined at the places specified in Item IV below. The PCX has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
-
Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
-
Purpose
The Exchange submits that the purpose of the proposed rule change is to adopt clarifying language to better describe an LMM's guaranteed participation in trades that occur via public outcry. The Commission recently approved changes to PCX rules pertaining to LMMs.\5\ These changes allow an LMM to operate from a location other than the PCX trading floor.
\5\ See Securities Exchange Act Release No. 51937 (June 29, 2005), 70 FR 38997 (July 6, 2005) (SR-PCX-2005-31).
According to the Exchange, its intention at all times was that if an LMM is not present on the trading floor they will not be entitled to a 40% guaranteed participation (as specified in PCX Rule 6.82(d)(2)) on any trade that occurs in the trading crowd via public outcry. While this provision was described in the purpose statement of SR-PCX-2005- 31, the PCX at this time feels that a change to the rule text will clarify when an LMM is actually entitled to their guaranteed participation on trades in accordance with Rule 6.82(d)(2). The proposed rule change now clearly states that LLMs will be entitled to their 40% guaranteed participation on public outcry trades only when they are preset in the trading crowd. 2. Statutory Basis
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations under the Act applicable to a national securities exchange and, in particular, the requirements of Section 6(b) of the Act.\6\ Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \7\ requirements that rules of an exchange be designed to facilitate transactions in securities, to promote just and equitable principles of
[[Page 59386]]
trade, to enhance competition and to protect investors and the public interest.
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
-
-
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.
-
Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others
The PCX neither solicited nor received comments on the proposal.
-
-
Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
Because the foregoing proposed rule change: (1) Does not significantly affect the protection of investors or the public interest; (2) does not impose any significant burden on competition; and (3) does not become operative for 30-days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, it has become effective pursuant to section 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\ A proposed rule change filed under Commission Rule 19b-4(f)(6) \10\ normally does not become operative prior to 30 days after the date of filing. The PCX requests that the Commission waive the 30-day operative delay, as specified in Rule 19b- 4(f)(6)(iii), and designate the proposed rule change to become operative immediately. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver will allow the PCX to immediately clarify its rule governing LMM's guaranteed participation in trades that occur by public outcry. Accelerating the operative date will allow for a more efficient and effective market operation by offering clarity to existing PCX rules. For these reasons, the Commission designates the proposed rule change as effective and operative immediately.\11\
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
\10\ Id.
\11\ For the purposes only of waiving the operative date of this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
At any time within 60 days after the filing of the proposed rule change, the Commission may summarily abrogate the 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.
-
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-PCX 2005-107 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303.
All submissions should refer to File Number SR-PCX-2005-107. 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 principal office of the PCX. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly.
All submissions should refer to File Number SR-PCX 2005-107 and should be submitted on or before November 2, 2005.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\12\
\12\ 17 CFR 200.30-3(a)(12).
Jill M. Peterson, Assistant Secretary. [FR Doc. E5-5581 Filed 10-11-05; 8:45 am]
BILLING CODE 8010-01-P
