[Federal Register Volume 60, Number 169 (Thursday, August 31, 1995)]
[Notices]
[Pages 45509-45510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-21578]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36146; File No. SR-PSE-95-18]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Pacific Stock Exchange, Inc. Relating to Position Limits 
on the PSE Technology Index

August 23, 1995.
    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 August 
21, 1995, the Pacific Stock Exchange, Inc. (``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.

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The PSE proposes to amend its existing rules to increase the 
existing position and exercise limits for options on the PSE Technology 
Index (``Index''). In addition, the Exchange is proposing to change the 
terms of option contracts on the Index from p.m. settled to a.m. 
settled.
    The text of the proposed rule change is available at the Office of 
the Secretary, PSE and at the Commission.

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 PSE 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 PSE 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
    On November 26, 1991, the Commission approved an exchange proposal 
to re-classify the PSE Technology Index as a broad-based index.\1\ The 
Index is a price-weighted, European-style \2\ index comprised of 100 
stocks that are intended to represent a broad spectrum of companies 
principally engaged in manufacturing and service-related products 
within advanced technology fields. Position and exercise limits for 
options on the Index are governed by PSE rules 7.6 and 7.7, and are set 
at 15,000 contracts on the same side of the market.

    \1\ Securities Exchange Act Release No. 29994, 56 FR 63536 (Dec. 
4, 1991). The Commission initially approved options trading on the 
Index in November 1983. See Securities Exchange Act Release Nos. 
20424, 48 FR 54557 (Dec. 5, 1983); and 20499, 48 FR 58880 (Dec. 23, 
1983).
    \2\ A European-style option may only be exercised during a 
specified period prior to expiration.
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    The Exchange is proposing to set new positions and exercise limits 
for options on the Index at 37,500 contracts on the same side of the 
market, with no more than 22,500 of such contracts in the series with 
the nearest expiration date. The Exchange has compared the Index with 
similar indexes traded on other exchanges and believes, based on such 
data, that the proposed position and exercise limits are consistent 
with the existing limits for broad-based index option contracts traded 
at the other exchanges.\3\

    \3\ The Exchange has compared the Index to the following 
indexes: Russell 2000 Index, S&P 400 Index, S&P 600 Index, Wilshire 
Small-Cap Index and National Over the Counter Index.
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    The Exchange is also proposing that options on the Index be a.m. 
settled instead of p.m. settled as originally approved. Accordingly, 
the last day of trading for options on the index shall be the business 
day preceding the last day of trading in the underlying securities 
prior to expiration. The current index value at the expiration of an 
a.m. settled index option shall be determined on the last day of 
trading in the underlying securities prior to expiration (i.e., the 
Friday immediately preceding the third Saturday of the month). The 
current index value shall, for such purposes, be determined by 
reference to the reported level of such index as derived from first 
reported sale (opening) prices of the underlying securities on such 
day, except that the last reported sale price of such a security shall 
be used in any case where the security does not open for trading on 
that day.

[[Page 45510]]

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act in general and furthers the objectives of 
Section 6(b)(5) in particular in that it is designed to prevent 
fraudulent and manipulative acts and practices and 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 believes the proposed rule change will impose no 
burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received from Members, Participants or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the publication of this notice in the Federal 
Register or within such other 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. Sec. 552, will be available for inspection and copying at 
the Commission's Public Reference Section, 450 Fifth Street, NW., 
Washington, DC 20549. Copies of such filing will also be available for 
inspection and copying at the principal office of the PSE. All 
submissions should refer to File No. SR-PSE-95-18 and should be 
submitted by September 21, 1995.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\4\

    \4\ 17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-21578 Filed 8-30-95; 8:45 am]
BILLING CODE 8010-01-M