[Federal Register Volume 61, Number 206 (Wednesday, October 23, 1996)]
[Notices]
[Pages 55062-55063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27144]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37838; File No. SR-PHLX-96-42]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Philadelphia Stock Exchange, Inc., Relating to Limiting 
Time for Submission of Settlement Offers

October 17, 1996.
    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 27, 1996, the Philadelphia Stock Exchange, Inc. (``PHLX'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``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

    Currently, PHLX Rule 960.7, ``Offers of Settlement,'' allows a 
respondent in any proceeding under the PHLX's disciplinary rules to 
submit a written settlement offer to the Exchange's Business Conduct 
Committee (``BCC'') at any time during the course of the proceeding. 
The PHLX proposes to amend PHLX Rule 960.7 to limit the time when a 
respondent may submit a written settlement offer to the BCC to within 
120 calendar days immediately following the date of service of the 
statement of charges upon the respondent. Under the proposal, the 
Exchange may schedule a hearing during the 120-day period immediately 
following the date of service of the statement of charges or as soon as 
practicable thereafter. The BCC may consider a settlement offer 
submitted after the 120-day period as long as consideration of the 
offer does not delay the hearing in the matter.
    The text of the proposed rule change is available at the Office of 
the Secretary, PHLX, 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 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.

[[Page 55063]]

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

    The purpose of this proposal is to adopt a time limit during which 
respondents involved in a disciplinary matter before the PHLX's BCC may 
submit offers of settlement. Presently, under PHLX Rule 960.7, a 
respondent may submit an offer of settlement at any time during the 
course of the proceedings. Because the language allows for offers of 
settlement to be submitted at any time, the BCC was concerned that 
respondents could intentionally submit inadequate offers of settlement 
for the sole purpose of delaying a scheduled hearing until the offer is 
reviewed by the full BCC.
    Thus, the Exchange proposes to amend PHLX Rule 960.7 in order to 
allow offers of settlement to be submitted only during the 120-day 
period immediately following the date of service of the statement of 
charges upon a respondent. The BCC could then schedule hearings after 
the 120 days knowing that there will not be last minute requests for 
continuances based upon late offers of settlement. Under proposed 
Interpretation and Policy .01, the BCC may also schedule a hearing 
during the 120-day period immediately following the date of service of 
the statement of charges on the respondent.\1\ The BCC will continue to 
have the ability to entertain offers of settlement after the 120 days 
if its review does not delay the scheduled hearing in the matter.
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    \1\ Under PHLX Rule 960.5, ``Hearing,'' a respondent must be 
given at least 15 business days notice of the time of a hearing.
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    The PHLX believes that the proposed rule change is consistent with 
Section 6 of the Act in general, and in particular, with Section 
6(b)(5), in that it is designed to promote just and equitable 
principles of trade, to prevent fraudulent and manipulative acts and 
practices, to foster cooperation and coordination with persons engaged 
in regulating, clearing, settling, processing information with respect 
to, and facilitating transactions in securities, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, as well as to protect investors and the public interest 
by allowing for more expeditious completion of disciplinary matters.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    The PHLX 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 received or requested.

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

    Within 35 days of the date of 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 reason for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (a) By order approve such 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 Room. Copies of the filing will also be 
available for inspection and copying at the principal office of the 
above mentioned self-regulatory organization. All submissions should 
refer to file number SR-PHLX-96-42 and should be submitted by November 
13, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\2\
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    \2\ 17 CFR 200.30-3(a)(12) (1995).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-27144 Filed 10-22-96; 8:45 am]
BILLING CODE 8010-01-M