[Federal Register Volume 59, Number 124 (Wednesday, June 29, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15754]


[[Page Unknown]]

[Federal Register: June 29, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34249; File No. SR-Phlx-94-13]

 

Self-Regulatory Organizations; Order Granting Approval to 
Proposed Rule Change by the Philadelphia Stock Exchange, Inc. Relating 
to Regulation 2 (Foods, Liquids and Beverages)

June 23, 1994.

I. Introduction

    On March 10, 1994, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
or ``Exchange'') submitted to the Securities and Exchange Commission 
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'')\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to amend Phlx Regulation 2 
(Foods, Liquids and Beverages) to permit the respective floor standing 
committees to waive the Regulation's prohibition against foods, liquids 
and beverages on the trading floor.\3\
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    \1\15 U.S.C. 78s(b)(1) (1988).
    \2\17 CFR 240.19b-4 (1993).
    \3\Regulation 2 is a regulation of order and decorum adopted 
pursuant to Phlx Rule 60. Rule 60 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.
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    The proposed rule change was published for comment in Securities 
Exchange Act Release No. 33815 (March 25, 1994), 59 FR 15474 (April 1, 
1994). No comments were received on the proposal. This order approves 
the proposed rule change.

II. Description of the Proposal

    Currently, Regulation 2, which was adopted pursuant to Rule 60, 
prohibits foods, liquids and beverages on the trading floor and the 
lower level areas adjacent to the trading floor, except for the 
lunchrooms. The first violation of Regulation 2 is punishable by an 
official warning, with the second and third violations punishable by a 
fine of $100 and $200, respectively. The fourth violation and any 
violation thereafter is punishable by a sanction that is discretionary 
with the Business Conduct Committee.
    The Phlx proposes to add a provision to Regulation 2 (Foods, 
Liquids and Beverages) stating that any provision of Regulation 2 may 
be waived by the chairperson of the appropriate floor standing 
committee or a designee thereof. Any waiver of the prohibition must be 
for a specified period of time and would require prior notice to the 
trading floor. In addition, reinstituting the prohibition would require 
prior notice to the floor.
    The Exchange states that the proposed rule change is consistent 
with Section 6(b)(5) of the Act, 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. The 
Exchange also believes that 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.

III. Discussion

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange and, in 
particular, with the requirements of Section 6(b)(5) of the Act.\4\
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    \4\15 U.S.C. 78f (1988).
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    The Commission believes that the ability to waive the prohibition 
against foods, liquids and beverages on the trading floor and the lower 
level areas adjacent to the trading floor\5\ is consistent with Section 
6(b)(5) of the Act, which requires, among other things, that the rules 
of an exchange be designed to promote just and equitable principles of 
trade and protect investors and the public interest. The ability to 
waive the prohibition against bringing foods, liquids and beverages on 
the trading floor for a specific period of time would provide the 
Exchange with the flexibility to permit floor personnel to bring foods 
and beverages to the floor work area when necessary or prudent, such as 
during periods of market volatility or high volume trading. As a 
result, the ability to waive the restrictions in Regulation 2 should 
enhance the members' ability to engage in transactions in securities 
and, thereby, protect investors and the public interest.
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    \5\The prohibitions in Regulation 2 do not apply to the Exchange 
lunchrooms. See Regulation 2.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\6\ that the proposed rule change (SR-Phlx-94-13) is approved.
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    \6\15 U.S.C. 78s(b)(2) (1988).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\17 CFR 200.30-3(a)(12) (1991).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-15754 Filed 6-28-94; 8:45 am]
BILLING CODE 8010-01-M