[Federal Register Volume 61, Number 188 (Thursday, September 26, 1996)]
[Notices]
[Pages 50527-50528]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24700]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37703; File No. SR-PSE-96-32]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Pacific Stock Exchange Incorporated Relating to Its Rules 
on Telephone Solicitations

September 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 27, 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, 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.
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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 Pacific Stock Exchange Incorporated (``PSE'' or ``Exchange'') 
proposes to adopt new Rule 9.20(b) and to add a commentary thereunder 
with respect to the meaning and administration of proposed Rule 
9.20(b). Below is the text of the proposed rule change. Proposed new 
language is italicized; proposed deletions are in brackets.

Rule 9

Conducting Business With the Public

[Conduct of Accounts]

* * * * *

para. 5905  Transactions for Public Customers

    Rule 9.20(a)--No change.

Telephone Solicitations

    Rule 9.20(b). Each member and member organization shall make and 
maintain a centralized list of persons who have informed the member, 
member organization of any employee thereof, that they do not wish 
to receive telephone solicitations, and shall refrain from engaging 
in telephone solicitations of persons named on that list.

[[Page 50528]]

    Commentary:
    .01  Members and member organizations that engage in telephone 
solicitation to market their products and services 
(``telemarketing'' or ``cold-calling'') are subject to the 
requirements of the rules of the Federal Communications Commission 
and the Securities and Exchange Commission relating to telemarketing 
practices and the rights of telephone users. This includes, but is 
not limited to, the requirement to make and maintain a list of 
persons who do not want to receive telephone solicitations (a ``do-
not-call'' list).

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 prepare 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
    The purpose of the proposed rule change is to: (i) Adopt Rule 
9.20(b) requiring members and member organizations that engage in 
telephone solicitations to maintain a centralized list of persons who 
do not wish to receive telephone solicitations, and to refrain from 
making telephone solicitations to persons named on such list; and (ii) 
Set forth Commentary .01 concerning the meaning and administration of 
proposed Rule 9.20(b) with respect to compliance with Federal 
Communications Commission (``FCC'') and Commission rules relating to 
telemarketing practices.\3\
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    \3\ The PSE notes that it intends to include this Commentary in 
a Circular that will be distributed to members and member 
organizations.
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    In 1994, an industry Task Force, comprised of representatives from 
industry regulatory and self-regulatory organizations, was formed to 
review broker-dealer telemarketing practices and compliance with the 
Telephone Consumer Protection Act of 1991 (``TCPA''), as well as with 
the FCC rules and regulations which implemented that law. The TCPA and 
FCC rules address telemarketing practices and the rights of telephone 
consumers. One of the TCPA's requirements is that businesses, including 
broker-dealers, that make telephone solicitations to residential 
telephone subscribers institute written policies and have procedures in 
place for maintaining ``do-not-call'' lists. As recommended by the Task 
Force, proposed Rule 9.20(b) implements this requirement by obligating 
PSE members to make and maintain a centralized list of person who have 
informed the member that they do not wish to receive telephone 
solicitations.
    The proposed Interpretation to Rule 9.20(b) reminds members and 
member organizations that they are subject to compliance with the 
requirements of the relevant rules of the FCC and the Commission 
relating to telemarketing practices and the rights of telephone 
consumers.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the Act 
in general, and with 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 PSE does not believe that the proposed rule change will impose 
any inappropriate 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 either solicited or received.

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 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 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 submission 
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. 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-96-32 and should be 
submitted by October 17, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-24700 Filed 9-25-96; 8:45 am]
BILLING CODE 8010-01-M