[Federal Register Volume 59, Number 63 (Friday, April 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7766]


[[Page Unknown]]

[Federal Register: April 1, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33815; File No. SR-Phlx-94-13]

 

Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Philadelphia Stock Exchange, Inc. (``Phlx'') Relating to 
Regulation 2 (Foods, Liquids and Beverages)

March 25, 1994.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on March 
10, 1994, the Philadelphia Stock Exchange, Inc. (``Phlx'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'' or ``S.E.C.'') the proposed rule change as described in 
Items I, II and III below, which Items have been prepared by the self-
regulatory organization. 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 Phlx, pursuant to Rule 19b-4 of the Act, proposes to amend Phlx 
Regulation 2 (Foods, Liquids and Beverages) to permit the ability of 
the respective standing floor committees to relax prohibitions 
contained in this Regulation without filing a proposed rule change 
pursuant to section 19(b)(2) of the Act. The Exchange proposes to amend 
Regulation 2 as follows:\1\
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    \1\With respect to the following amendment, italicizing 
indicates new material.

    Regulation 2--Foods, Liquids and Beverages Foods, liquids and 
beverages are prohibited on the trading floor and the lower level 
areas adjacent to the trading floor, except for the lunchrooms.
    Any provision of this rule may be waived for a specific period 
of time by the chairperson of the appropriate floor standing 
committee or his designee.

1st Occurrence.....................  Official Warning.                  
2nd Occurrence.....................  $100.00                            
3rd Occurrence.....................  $200.00                            
4th and Thereafter.................  Sanction is discretionary with the 
                                      Business Conduct Committee        
                                      session.                          
                                                                        

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 self-regulatory organization 
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 self-regulatory organization 
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
    Regulation 2 (Food, Liquids and Beverages) is a regulation of order 
and decorum adopted pursuant to Phlx Rule 60.\2\ Rule 60 (Assessments 
for Breach of Regulations) permits Exchange officials and Floor 
Officials to assess fines not exceeding $1,000 for violations of 
regulations pertaining to the administration of, and order, decorum, 
health, safety and welfare on the Exchange, or to refer such violations 
to the Exchange's Business Conduct Committee where higher fines or 
other sanctions may be imposed, in accordance with Phlx Rule 960. Rule 
60 also enumerates the procedural aspects of order and decorum fines, 
including the ability to contest a fine and request a hearing. The 
Exchange has adopted seven regulations of order and decorum pursuant to 
Rule 60, including Regulation 2.
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    \2\Regulation 2 prohibits food, liquids and beverages on the 
trading floor and the lower level areas adjacent to the trading 
floor (except for the lunchrooms).
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    As originally adopted, Regulation 2 governs eating and drinking on 
the floor. As conditions respecting Exchange facilities, the number of 
member organizations' personnel employed on the trading floor and order 
flow patterns continually change, the Exchange believes that a 
procedure for waiving the prohibitions contained in Regulation 2 is 
necessary. Eating and drinking, under this proposal, would be permitted 
on any trading floor, upon determination by the chairperson, or his 
designee, of the appropriate floor standing committee. Any waiver of 
the prohibition must be for a specified period of time and would 
require prior notice to the trading floor; reinstituting the 
prohibition would also require prior notice.
    The Exchange believes that incorporating a waiver procedure into 
Regulation 2 is more efficient than continually amending Regulation 2, 
which requires a filing with the Commission pursuant to section 19(b) 
of the Act. Such a filing would not raise new issues, because it would 
merely be specifying which floors, or parts thereof, prohibit eating or 
drinking. Often, the Exchange's reasons for either permitting or 
prohibiting eating on a particular trading floor may be time-sensitive 
such that the delay inherent in the preparation and filing of a 19(b) 
proposal may obviate the need for the change. The Exchange believes 
that the proposed language is preferable to permitting eating and 
drinking floor-wide, because eating and drinking may affect order and 
decorum on the trading floor, and thus, trading. The Exchange also 
believes that this proposal is preferable to filing repeated proposed 
rule changes, which would be repetitive and expend staff time. Because 
the impact of the proposal is limited to floor personnel, the Exchange 
does not believe that notice other than to the trading floor would be 
necessary.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Phlx Rule 60, because the regulation of eating and drinking on the 
trading floor is necessary to ensure health, safety and decorum. The 
Exchange also believes that the proposed rule change is consistent with 
section 6 of the Act in general, and in particular, with section 
6(b)(5), in that it is designed to promote just and equitable 
principles of trade and protect investors and the public interest by 
fostering an orderly environment on the trading floor. In addition, the 
proposal is consistent with section 6(b)(6) of the Act because it would 
continue to provide that members of the Exchange be appropriately 
disciplined for violations of the rules of the Exchange.

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.

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. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549. 
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 at the 
Commission's Public Reference Room, 450 Fifth Street, NW., Washington, 
DC 20549. Copies of the 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-94-13 and should be submitted by April 22, 
1994.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-7766 Filed 3-31-94; 8:45 am]
BILLING CODE 8010-01-M