[Federal Register Volume 60, Number 116 (Friday, June 16, 1995)]
[Notices]
[Pages 31751-31752]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14796]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35836; File No. SR-PSE-95-11]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Pacific Stock Exchange, Inc., Relating to the Number of
Trading Posts That May Be Included as Part of Each Market Maker's
Primary Appointment Zone
June 9, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on April 7, 1995, the Pacific
Stock Exchange Incorporated (``PSE'' or ``Exchange'') filed with 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 self-regulatory organization. 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) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The PSE proposes to increase the number of trading posts that may
be included as part of each market maker's primary appointment zone.
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.
[[Page 31752]]
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
PSE Rule 6.35 currently requires each options market maker to
select and maintain a primary appointment zone consisting of one or two
trading posts.\2\ Pursuant to Rule 6.35, Commentary .03, at least 75%
of the trading activity of each market maker (measured in terms of
contract volume per quarter) must be in classes of option contracts to
which such market maker's primary appointment zone extends. In
addition, under the new short sale rule applicable to stocks traded in
the Nasdaq market, the options market maker exemption to that rule is
limited to stocks underlying options in which the market maker holds an
appointment.\3\
\2\PSE Rule 6.35 requires multiple posts to be contiguous,
except under special circumstances.
\3\See PSE Rule 4.19(c)(2).
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The Exchange proposes to amend Rule 6.35 in two respects: First,
the maximum number of trading posts that could be included as part of
each primary appointment zone would be increased from two to six.
Second, the Options Appointment Committee could allow a market maker to
exceed the six trading post maximum if special circumstances were to
exist. Under the proposal, the largest number of issues a market maker
could have within his or her primary appointment zone, in the absence
of special circumstances, would be 108 (or 31% of the issues traded on
the Options Floor).
The Exchange believes that the current limit of two trading posts
is unduly restrictive and places the PSE's options market makers at a
competitive disadvantage in relation to market makers on other options
exchanges. The Exchange further believes that its proposal will allow
it the flexibility to respond promptly to any need for greater market
maker participation that may arise in light of recent and anticipated
increases in the number of options classes traded on the floor. The
Exchange also believes that its proposal, if approved, would serve to
assure adequate market maker coverage of all classes traded on the
floor and to enhance the ability of the Exchange to provide deep and
liquid markets and to provide for competitive equality among exchanges.
The Exchange believes that its proposal is consistent with Section
6(b) of the Act in general, and Section 6(b)(5) in particular, in that
it is designed to promote just and equitable principles of trade and to
protect investors and the public interest.
(B) 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.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants, or Others
Written comments on the proposed rule change were neither solicited
nor 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 such 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 in the
Commission's Public Reference Section, 450 Fifth Street, NW.,
Washington, DC. Copies of such filing will also be available for
inspection and copying at the principal office of the above-mentioned
self-regulatory organization. All submissions should refer to File No.
SR-PSE-95-11 and should be submitted by [insert date 21 days after the
date of this publication].
For the Commission to by the Division of Market Regulation,
pursuant to delegated authority.\4\
\4\17 CFR 200.30-(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-14796 Filed 6-15-95; 8:45 am]
BILLING CODE 8010-01-M