[Federal Register Volume 60, Number 195 (Tuesday, October 10, 1995)]
[Notices]
[Pages 52717-52718]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25021]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36325; File No. SR-PSE-95-23]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change by the Pacific
Stock Exchange Incorporated Relating to Corporate Governance
October 2, 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
September 28, 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. On October 2, 1995, the Exchange submitted Amendment No.
1 to the proposed rule change.\1\ The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
\1\ See letter from Rosemary A. MacGuinness, Senior Counsel,
PSE, to Glen Barrentine, Senior Counsel, SEC, dated October 2, 1995.
In Amendment No. 1, the Exchange requests that the proposed rule
change be considered under Section 19(b)(2), rather than Section
19(b)(3)(A) as originally filed, and approved on an accelerated
basis.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange pursuant to Rule 19b-4 of the Act submits this rule
filing to amend Article II, Section 1(a), and Article III, Section 2(a)
of the Constitution of the PSE, to provide for an additional public
Governor on the Board of Governors. The text of the proposed rule
change is available at the PSE and 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 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 III 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
Currently, Article II of the Constitution of the PSE provides for
eighteen (18) elected Governors, of whom five (5) are representatives
of the public. The proposed rule change will provide for one additional
public Governor, and will thereby increase the total number of elected
Governors to nineteen (19).
When the Commission's Chairman, Arthur Levitt, met with the PSE
Board of Governors (``Board'') at its December 14, 1994 meeting, he
discussed the important role boards play at the securities exchanges in
promoting the investing public's confidence in the integrity of U.S.
securities markets. At its meeting on January 26, 1995, the Governors
discussed Chairman Levitt's observation about the composition of the
PSE Board and were in agreement with Chairman Levitt that public, non-
industry representatives on exchange boards convey a message to public
investors that their interests will be protected, as well as bring
additional business expertise to the Exchange in areas other than
securities. The Board also considered the major contributions of the
five (5) current public Governors and their increased time commitments
to Exchange matters (e.g., technology, finance and banking). Therefore,
the Board unanimously approved the addition of a public Governor,
increasing the number of public representatives from five to six.
2. Statutory Basis
The proposed rule filing is consistent with Section 6(b)(3) and
Section 6(b)(5) of the Act, in that it will assure a fair
representation of the members in the selection of its Governors and
administration of its affairs, and is designed to promote just and
equitable principles of trade, to protect investors and the public
interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
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 amendments were approved by the PSE Membership in accordance
with Article XVII of the PSE Constitution.
III. 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, N.W., 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
[[Page 52718]]
Section, 450 Fifth Street, N.W., Washington, DC 20549. Copies of such
filing will also be available for inspection and copying at the
principal office of the Exchange. All submissions should refer to File
No. SR-PSE-95-23 and should be submitted by October 31, 1995.
IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change
The Commission has reviewed carefully PSE's proposed rule change
and concludes that it is consistent with the requirements of the Act
and the rules and regulations thereunder applicable to a national
securities exchange, and in particular, with Sections 6(b)(3) and
6(b)(5) of the Act. Section 6(b)(3) of the Act requires that the rules
of an exchange assure a fair representation of its members in the
selection of its directors and administration of its affairs and that
one or more directors represent issuers and investors and not be
associated with a member of the exchange or a broker-dealer. Moreover,
Section 6(b)(5) of the Act requires, among other things, that the rules
of an exchange be designed, in general, to protect investors and the
public interest.
The proposed rule change would alter the size and composition of
the PSE's Board of Governors by providing for one additional public
governor on the Board. Historically, the Commission has encouraged the
exchanges to give credence to their quasi-public nature by fostering
public representation on their governing boards.\2\ Specifically, the
Commission has noted previously that adding public directors to the
boards of the exchanges may help ensure adequate public representation.
The Commission continues to encourage self-regulatory organizations to
include adequate public representation on their governing boards to
protect the public interest.
\2\ See SEC Report of Special Study of Securities Markets, 88th
Cong., 1st Sess. (Comm. Print 1963), pt. 4 at 763-65.
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The Commission finds good cause for approving the proposed rule
change, including Amendment No. 1, prior to the thirtieth day after the
date of publication of the notice of filing thereof. The PSE proposal
is designed to achieve greater public representation on the Exchange's
governing body that in turn will protect investors and the public
interest. Accelerated approval thereof will allow these benefits to be
realized as soon as possible.
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\3\ that the proposed rule change (SR-PSE-95-23) is approved.
\3\ 15 U.S.C. 78s(b)(2).
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\4\
\4\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 95-25021 Filed 10-6-95; 8:45 am]
BILLING CODE 8010-01-M