[Federal Register Volume 62, Number 93 (Wednesday, May 14, 1997)]
[Notices]
[Pages 26605-26606]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12546]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-38580; File No. SR-PCX-15]


Self-Regulatory Organizations; Notice of Filing of a Proposed 
Rule Change by the Pacific Exchange, Inc. Relating to Trading 
Differentials for Equity Securities

May 7, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on May 5, 1997, the Pacific 
Exchange, Inc. (``PCX'') or ``Exchange'') filed with the Securities and 
Exchange Commission (``SEC'' or ``Commission'') the proposed rule 
change as described in Items I and II below, which Items have been 
prepared by the self-regulatory organization (``SRO''). 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to modify its Rule 5.3(b) to allow the 
Exchange to establish trading differentials for equity securities at 
its discretion. The text of the proposed rule change is available at 
the PCX and at the Commission.

II. Self-Regulatory Organization's Statement of the Propose 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 examined at the 
places specified in Item III below. The self-regulatory organization 
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

1. Purpose
    PCX Rule 5.3(b) currently provides that, unless specifically ruled 
otherwise, the trading differentials on stocks shall be as follows: On 
stocks other than those traded on the New York Stock Exchange 
(``NYSE'') or American Stock Exchange (``Amex''); if the selling price 
is below \1/2\ of $1, the trading differential is \1/32\; if the 
selling price is \1/2\ of $1 but under $5, the trading differential is 
\1/16\; and if the selling price is $5 and above, the trading 
differential is \1/8\. The rule further provides that on stocks also 
traded on the NYSE or the Amex, the trading differentials shall be the 
same as those prescribed by such exchanges.
    The Exchange is proposing to modify Rule 5.3(b) to provide that the 
Exchange shall determine the trading differentials for equity 
securities traded on the Exchange. The Exchange is proposing this 
change in order to add flexibility, so that it can change the trading 
differentials on an immediate basis. The Exchange notes that some 
exchanges do not have specific rules on trading differentials and are 
able to change them on an immediate basis. The Exchange

[[Page 26606]]

intends to base any changes to trading differentials on competitive 
considerations and other factors as appropriate, but such trading 
differentials will conform to any applicable Intermarket Trading System 
(``ITS'') rules.\2\
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    \2\ The PCX indicated to the Commission that it intends to take 
into account the manner in which ITS is operating at the time the 
Exchange is considering changes to its trading differentials.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) \3\ of the Act in general and furthers the objectives of 
Section 6(b)(5) \4\ in particular in that it is designed to facilitate 
transactions in securities, to remove impediments to and perfect the 
mechanism of a free and open market, and to promote just and equitable 
principles of trade.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden 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 has neither solicited nor received written comments.

III. 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 Room, 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 PCX. All 
submissions should refer to File No. SR-PCX-97-15 and should be 
submitted by June 4, 1997.

    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 Security.
[FR Doc. 97-12546 Filed 5-13-97; 8:45 am]
BILLING CODE 8010-01-M