[Federal Register Volume 61, Number 166 (Monday, August 26, 1996)]
[Notices]
[Pages 43801-43802]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21607]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37583; File No. SR-PSE-96-25]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Stock Exchange, 
Inc., Relating to the Listing and Trading of FLEX Equity Options

August 19, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on August 16, 1996, 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 and 
II below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its rules respecting the listing and 
trading of FLEX Equity Options in order to add a provision on the 
formation of contracts that was inadvertently omitted from the original 
proposal. The text of the proposed rule change is available at the 
Office of the Secretary, the Exchange, 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 Exchange included statements 
concerning the purpose of and basis for the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Section (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

    On February 14, 1996, the Commission approved an Exchange proposal 
to establish rules on the listing and trading of FLEX Equity Options on 
the Exchange.\3\ The Exchange is now proposing to amend those rules in 
order to add a section on the formation of contracts that was 
inadvertently omitted from the proposal as filed with the 
Commission.\4\ The Exchange notes that the proposed addition is 
consistent with Rule 24A.5(c)(iii) of the Chicago Board Options 
Exchange, Incorporated.
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    \3\ See Securities Exchange Act Release No. 36841 (February 14, 
1996), 61 FR 6666 (February 21, 1996) (File No. SR-PSE-95-24).
    \4\ The Exchange proposes to add the following text to Rule 
8.103(c):
     ``If the Submitting Member has indicated an intention to cross 
or act as principal with respect to any part of the FLEX trade, 
acceptance of the displayed BBO shall be automatically delayed until 
the expiration of the BBO Improvement Interval. Prior to the BBO 
Improvement Interval, the Submitting Member must indicate at the 
post the price at which the member expects to trade. In these 
circumstances, the Submitting Member may participate with all other 
FLEX-participating members in attempting to improve or match the BBO 
during the BBO Improvement Interval. At the expiration of the BBO 
Improvement Interval, the Submitting Member must promptly accept or 
reject the BBO(s).''
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    The Exchange believes that the proposed rule change is consistent 
with Section 6 of the Act, in general, and furthers the objectives of 
Section 6(b)(5), in particular, in that it is designed to promote just 
and equitable principles of

[[Page 43802]]

trade, to foster cooperation with persons engaged in facilitating and 
clearing transactions in securities, 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.

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

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    Because the foregoing proposed rule change: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden of competition; 
(3) was provided to the Commission for its review at least five days 
prior to the filing date; and (4) does not become operative for 30 days 
from August 16, 1996, the rule change proposal has become effective 
pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(e)(6) 
thereunder. In particular, the Commission believes the proposal 
qualifies as a ``noncontroversial filing'' in that the proposed 
standards do not significantly affect the protection of investors or 
the public interest and do not impose any significant burden on 
competition. At any time within 60 days of the filing of the proposed 
rule change, the Commission may summarily abrogate such rule change if 
it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

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. Sec. 552, will be available for inspection and copying at 
the Commission's Public Reference Section, 450 Fifth Street, N.W., 
Washington, D.C. 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 SR-PSE-96-25 and should be submitted by 
September 16, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-21607 Filed 8-23-96; 8:45 am]
BILLING CODE 8010-01-M