Self-regulatory organizations; proposed rule changes: Philadelphia Stock Exchange, Inc.,
[Federal Register: June 29, 2005 (Volume 70, Number 124)]
[Notices]
[Page 37489-37491]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29jn05-128]
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51910; File No. SR-Phlx-2005-34]
Self-Regulatory Organizations: Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to the Electronic Submission of Financial Reports
June 22, 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 May 9, 2005, the Philadelphia Stock Exchange, Inc. (``Phlx'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described
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in items I, II, and III below, which Items have been prepared by the Phlx. On June 13, 2005, Phlx filed Amendment No. 1 to the proposed rule change.\3\ The Exchange has designated this proposal as a practice with respect to the administration of an existing rule pursuant to section 19(b)(3)(A)(i) of the Act,\4\ and Rule 19b4(f)(1) thereunder,\5\ 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.\6\
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ The effective date of the original proposed rule change is May 9, 2005 and the effective date of the amendment is June 13, 2005. For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change, as amended, under Section 19(b)(3)(C) of the Act, the Commission considers the period to commence on June 13, 2005, the date on which the Phlx submitted Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
\4\ 15 U.S.C. 78s(b)(3)(A)(i).
\5\ 17 CFR 240.19b-4(f)(1).
\6\ In an e-mail from Angela Dunn, Director, Phlx, to E. David Hwa, Special Counsel, Division of Market Regulation, Commission, dated June 17, 2005, Phlx agreed to minor revisions by Commission staff made to the rule change and this notice.
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Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Phlx, pursuant to section 19(b)(1) \7\ and Rule 19b-4 thereunder,\8\ proposes to amend Exchange Rule 703. The proposed amendment would require Phlx members that compute net capital or positive net liquid assets and for which the Exchange is their designated examining authority (``DEA''), to submit electronically certain financial reports to the Exchange in lieu of manual filings.
\7\ 15 U.S.C. 78s(b)(1).
\8\ 17 CFR 240.19b-4.
The text of the proposed rule change is below. New text is italicized. * * * * *
Rule 703. Financial Responsibility and Reporting
(a)-(f) No change. Commentary
.01 No Change
.02 Organizations designated to the Exchange for financial responsibility pursuant to SEC Rule 17d-1 and subject to SEC Rules 15c3-1 and 17a-5 or exempt from SEC Rule 15c3-1 and maintaining net liquid assets in accordance with Rule 703(a), must file electronically with the Exchange's Examinations Department, utilizing such method as required by the Exchange, FOCUS Reports and filings required by SEC Rule 17a-5(a) and (b) and Rule 703(c), (d) and (f). Exchange members are still obligated to submit such filings to the Securities and Exhange Commission as specified in the Securities Exchange Act of 1934 (``Act''), as amended, and the rules promulgated under the Act. * * * * *
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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 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
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Purpose
The purpose of the proposed rule change is to create an efficient method of collecting FOCUS reports and other financial filings, including those required by SEC Rules 17a-5(a) and (b) and Rule 703(c), (d) and (f) (``Financial Documents''). Currently, the Financial Documents are provided in hard copy format to Exchange staff. The information is manually key punched by Exchange staff into a database utilized by the Exchange for submissions to the Commission and for collecting monthly financial information. The proposed rule change would require Exchange members, for which the Exchange is their DEA, to electronically submit their Financial Documents to the Exchange, utilizing Exchange proprietary software.
The features of the electronic submission system are designed to eliminate errors and provide more efficient means of gathering necessary financial information. The Exchange expects to provide each user with password and logon identification and create a profile for each user. It is the Exchange's intention to design the software with required fields of entry, as well as edit checks for various balances that are entered by the users. Additionally, the software is intended to automatically provide alerts, if the user is past the due date or the financial information indicates the firm is below a financial requirement when submitting the report. These safeguards should lead to fewer mistakes and provide users with helpful tools to assist with filings.
The Exchange anticipates it will have the ability to receive summary and exception reports and review the information gathered by the software. The Exchange will submit required financials to the Commission. In summary, the electronic submission process should create a greater likelihood that data from members will be accurate and efficient, as well as utilize fewer Exchange resources. 2. Statutory Basis
The Exchange believes that its proposal is consistent with section 6(b) of the Act \9\ in general, and furthers the objectives of section 6(b)(5) of the Act \10\ in particular, in that it is designed to promote just and equitable principles of trade and to protect investors and the public interest.
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will impose any inappropriate burden on competition.
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.
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Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
The foregoing proposed rule change has been designated as a practice with respect to the administration of an existing rule pursuant to section 19(b)(3)(A)(i) \11\ of the Act and Rule 19b-4(f)(1) \12\ thereunder. Accordingly, the proposal will take effect upon filing with the Commission. Notwithstanding that this rule change would be effective immediately upon filing, the Exchange will start rolling out member firms onto the electronic filing system on approval of this filing, and after notice to membership, with complete implementation and mandatory rollout by January 2006. 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,
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or otherwise in furtherance of the purposes of the Act.
\11\ 15 U.S.C. 78s(b)(3)(A)(i).
\12\ 17 CFR 240.19b-4(f)(1).
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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, as amended, 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 S-Phlx-2005-34 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-Phlx-2005-34. 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 Section, 100 F Street, NE., Washington, DC 20549. Copies of the filing also will be available for inspection and copying at the principal office of 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-2005-34 and should be submitted on or before July 20, 2005.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\13\
\13\ 17 CFR 200.30-3(a)(12).
J. Lynn Taylor, Assistant Secretary.
[FR Doc. E5-3385 Filed 6-28-05; 8:45 am]
BILLING CODE 8010-01-P
