[Federal Register Volume 62, Number 59 (Thursday, March 27, 1997)]
[Notices]
[Pages 14715-14716]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7783]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38422; File No. SR-PHLX 97-08]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. Relating to Minimum Exercise Amount for Customized 
Foreign Currency Options

March 19, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on March 11, 1997, 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.
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    \1\ 15 U.S.C. Sec. 78s(b)(1).
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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, proposes to amend 
Exchange Rule 1069(i) to revise the minimum exercise amount for 
customized foreign currency options from 100 to 50 contracts. The text 
of the proposed rule change follows (new text is italicized, deleted 
text is in brackets):
Customized Foreign Currency Options
Rule 1069.
    A foreign currency option participant (``participant'') may request 
and obtain quotes and execute trades in any foreign currency option 
contract listed on the Exchange with a non-listed exercise price in 
accordance with this rule. Participants may also request and obtain 
quotes and execute trades in foreign currency options contracts with 
European-terms (inverses) or as a cross-rate. To the extent that the 
provisions of this rule are inconsistent with other Exchange rules, 
this rule takes precedence in relation to customized foreign currency 
options.
    (a)-(h)  No change.
    (i) Exercise of Customized Options. When exercising customized 
options, the lesser of [100] 50 contracts or the remaining number of 
contracts must be exercised and the exercise limits in Rule 1002 will 
apply.
    (j)-(k)  No change.

[[Page 14716]]

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
    On January 3, 1997, the Exchange received approval to reduce the 
minimum transaction size for opening and closing transactions in 
customized foreign currency options from 100 contracts to 50 
contracts.\2\ In an oversight, the Exchange unintentionally did not 
make a conforming change to the provision in subsection (i) of Rule 
1069. That provision currently states that ``when exercising customized 
options, the lesser of 100 contracts or the remaining number of 
contracts must be exercised and the exercise limits in Rule 1002 will 
apply.'' The minimum exercise amount should also have been reduced to 
50 contracts. As the rule currently is written, an investor who only 
purchases 50 contracts and holds them until expiration could exercise 
all 50 contracts pursuant to the ``remaining number of contracts'' 
clause, however, the Exchange did not intend to impose a higher minimum 
exercise requirement than the minimum trading requirement. Accordingly, 
pursuant to this filing, the Phlx proposes to reduce the minimum 
exercise amount to the lesser of 50 contracts or the remaining number 
of contracts in the holder's position.
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    \2\ See Securities Exchange Act Release No. 38113 (January 3, 
1997), 62 FR 442 (January 9, 1997).
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2. Statutory Basis
    The proposed rule change is consistent with Section 6 of the Act 
\3\ in general, and in particular, with Section 6(b)(5),\4\ in that it 
is designed to promote just and equitable principles of trade, prevent 
fraudulent and manipulative acts and practices, facilitate transactions 
in securities, remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and protect 
investors and the public interest by imposing an exercise minimum which 
is consistent with the trading size minimums for the product.
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    \3\ 15 U.S.C. Sec. 78f.
    \4\ 15 U.S.C. Sec. 78(b)(5).
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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 solicited or received.

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 on competition; 
and (3) does not become operative for 30 days from March 11, 1997, the 
date on which it was filed, and the Exchange provided the Commission 
with written notice of its intent to file the proposed rule change at 
least five business days prior to the filing date, the rule change 
proposal has become effective pursuant to Section 19(b)(3)(A) of the 
Act and Rule 19b-4(e)(6) thereunder.\5\
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    \5\ 17 CFR 240.19b-4(e)(6).
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    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, NW, 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 in the 
Commission's Public Reference Section, 450 Fifth Street, NW, 
Washington, DC 20549. Copies of such filing will also be available for 
inspection and copying at the principal office of the Phlx. All 
submissions should refer to File No. SR-Phlx-97-08 and should be 
submitted by April 17, 1997.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 97-7783 Filed 3-26-97; 8:45 am]
BILLING CODE 8010-01-M