[Federal Register Volume 61, Number 22 (Thursday, February 1, 1996)]
[Notices]
[Pages 3747-3748]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-2058]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-36775; File No. SR-Phlx-95-93]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Philadelphia Stock Exchange, Inc. To Increase the Number 
of Appointed Public Governors to Four, To Limit Appointed Public 
Governors to Two Consecutive Three-Year Terms, and To Eliminate From 
the Board of Governors the Ex-Officio Position Presently Held by the 
Immediate Past President of the Exchange

January 26, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on January 4, 1996, the 
Philadelphia Stock Exchange, Inc. (``Phlx'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I and II 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Phlx proposes to increase the number of Appointed Public 
Governors from three to four and also proposes a two term limit on all 
Appointed Public governors. Additionally, the Phlx proposes to 
eliminate one of the ex-officio offices of the Board of Governors. 
Finally, the Phlx proposes to delete the second paragraph of Article IV 
section 

[[Page 3748]]
4-3 because it no longer provides any constructive use.\2\

    \2\ This paragraph currently provides that ``Notwithstanding the 
provisions of By-Law 4-1 and the first paragraph of this by-law, the 
classes whose terms expire in 1986, 1987 and 1988 shall remain as 
currently constituted until their terms expire.'' It was included in 
connection with the last amendment to this by-law to ensure a smooth 
transition of the Governors whose terms were scheduled to expire in 
1986, 1987, and 1988. Telephone conversation between Murray L. Ross, 
Secretary, Phlx, and Anthony P. Pecora, Attorney, SEC (Jan. 22, 
1996).
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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
    Article IV of the Phlx By-Laws presently provides for three 
Appointed Public Governors. These Governors presently serve three-year 
terms and have no term limits. The Phlx proposes to increase the number 
of Appointed Public Governors from three to four, while eliminating the 
ex-officio position presently held by the immediate past President of 
the Phlx.\3\

    \3\ The Commission notes, according to the proposal, that the 
fourth Appointed Public Governor's term would commence in 1996. 
Hence, one Appointed Public Governor would be selected every year, 
except in 1996 and every third year thereafter. In those years, two 
Appointed Public Governors would be selected.
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     Additionally, the proposed amendment establishes term limits for 
Appointed Public Governors of no more than two consecutive three year 
terms (total of six consecutive years). The term limit provision makes 
Appointed Public Governors ineligible for further service in such 
capacity until an interval of at least one year passes.\4\ By imposing 
term limits on the Appointed Public Governors, the Phlx hopes to 
promote diversity amongst the Appointed Public Governors. The Exchange 
believes this diversity will better serve the Exchange, its members, 
its member organizations, and investors.

    \4\ The Commission notes, in addition to the Appointed Public 
Governors, that the Exchange's Board of Governors would be composed 
of the offices of the Chairman of the Board, two Vice Chairmen of 
the Board, 9 On-Floor Governors, 9 Off-Floor Governors, 2 At-Large 
Governors, the President of the Exchange, and an ex-officio position 
held by the immediate past Chairman of the Board. The Chairman may 
serve in such office for two consecutive two-year terms, and the 
Vice Chairman may serve in such office for four consecutive one-year 
terms. After serving for such periods, these Governors are 
ineligible for further service in such office until an interval of 
at least one year passes. The immediate past Chairman may serve in 
such office for a one-year term. The 9 On-Floor Governors, the 9 
Off-Floor Governors, the 3 At-Large Governors, and the President of 
the Exchange, however, are not subject to term limits. See Phlx By-
Laws, Article IV, Secs. 4-1 and 4-2.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
section 6(b)(3) of the Act \5\ because it provides in part that one or 
more directors shall be representative of issuers and investors and not 
associated with a member of the Exchange, broker, or dealer. The 
Exchange also believes the proposed rule change furthers the objectives 
of Section 6(b)(5)\6\ in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principals of trade, and, in general, to protect investors and the 
public interest.

    \5\ 15 U.S.C. 78f(b)(3).
    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Competition

    The Exchange believes the proposed rule change will impose no 
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

    The Exchange did not receive any written comments in response to 
Phlx Circular 95-193.\7\

    \7\ In accordance with Phlx By-Law Article XXII, Sec. 22-2, this 
circular announced the current proposal to the Exchange's members.
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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 its 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, N.W., Washington, D.C. 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 Section, 450 Fifth Street, N.W., 
Washington, D.C. 20549. Also, copies of such filing will be available 
for inspection and copying at the principal office of the Phlx. All 
submissions should refer to File No. SR-Phlx-95-93 and should be 
submitted by February 22, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\

    \8\ 17 C.F.R. 200.30-3(a) (12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-2058 Filed 1-31-96; 8:45 am]
BILLING CODE 8010-01-M