[Federal Register Volume 62, Number 126 (Tuesday, July 1, 1997)]
[Notices]
[Pages 35535-35536]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17168]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-38764; File No. SR-PHLX-97-26]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. Regarding Customized Options on the European Currency 
Unit

June 24, 1997.
    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 June 17, 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. 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 PHLX proposes to amend Rule 1009 in order to provide that 
options on the European Currency Unit (``ECU'') now are available only 
as customized options trade pursuant to Exchange Rule 1069. The text of 
the proposed rule change follows (italicized text is new):
Rule 1009. Criteria for Underlying Stocks
    (a) No change.
    (b) No change.
    (c) The British pound, the German mark, the Swiss franc, the 
Canadian dollar, the French franc, the Australian dollar, the Japanese 
yen, the U.S. dollar, the Italian lira (only available for trading as a 
customized foreign currency option pursuant to Rule 1069), the Spanish 
peseta (only available for trading as a customized foreign currency 
option pursuant to Rule 1069) and the European Currency Unit (only 
available for trading as a customized foreign currency option pursuant 
to Rule 1069), or any cross-rate based on any two of the aforementioned 
foreign currencies other than the U.S. dollar, may be approved as 
underlying foreign currencies for options transactions by the Exchange, 
subject to any approval criteria the Exchange may deem necessary or 
appropriate in the interests of maintaining a fair and orderly market 
or for the protection of investors. In the event that any of the 
sovereign governments or the European Economic Community's European 
Monetary System issuing any of the above-mentioned currencies should 
issue a new currency intended to replace one of the above-mentioned 
currencies as the standard unit of the official medium of exchange of 
such government, such new currency also may be approved as an 
underlying foreign currency for options transactions by the Exchange, 
subject to any approval criteria the Exchange may deem necessary or 
appropriate in the interests of maintaining a fair and orderly market 
or for the protection of investors. Options trading in such new 
currency may occur simultaneously with options trading in any of the 
above-mentioned currencies; provide, however, that the Exchange shall 
withdraw its approval of options transactions in the currency which is 
intended to be replaced by such new

[[Page 35536]]

currency as expeditiously as it deems consistent with the maintenance 
of a fair and orderly market or the protection of investors.

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

    On April 11, 1997, the specialist in the ECU option resigned and no 
other Foreign Currency Option participant organization applied to be 
the specialist in such currency options. The Exchange thus determined 
to delist the non-customized ECU contract on the Exchange and offer 
only customized ECU options traded pursuant to Exchange Rule 1069 
beginning on Monday, April 14, 1997. As of that date, no open interest 
in ECU options existed. The Exchange convened its Emergency Committee, 
pursuant to Exchange Rule 98, on April 10, 1997 in order to authorize 
this course of action which was later ratified by the Board of 
Governors on April 14, 1997.
    Exchange Rule 1009 which sets forth all of the currencies approved 
for options trading thereon presently includes the ECU. This rule 
change will add the explanatory notation to the text of subsection (c) 
that the ECU is now an approved currency only for customized options. 
Customized options on the ECU have been trading on the Phlx since 
November 1994; thus, this filing merely will codify the fact that non-
customized ECU options will not be offered anymore. The effect of this 
change is that ECU options will not be continuously quoted, nor will a 
specialist be appointed to trade them. Markets will be made by 
Registered Options Traders (both assigned and non-assigned) in response 
to a Request for Quotation. Further, no trading rotations will be held 
and a 50 contract minimum transaction size is applicable now to all ECU 
options traded on the Phlx.\3\
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    \3\ See Phlx Rule 1069.
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    The Exchange believes that the proposed rule change is consistent 
with Section 6 of the Act \4\ in general, and in particular, with 
Section 6(b)(5),\5\ in that it is designed to promote just and 
equitable principles of trade, 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.
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(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. Sef-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

    The foregoing rule change constitutes a stated policy, practice, or 
interpretation with respect to the meaning, administration, or 
enforcement of an existing rule of the Exchange, and therefore, has 
become effective pursuant to Section 19(b)(3)(A) of the Act \6\ and 
subparagraph (e) of Rule 19b-4 thereunder.\7\ At any time within 60 
days of the filing of the proposed rule change, the Commission may 
summarily abrogate such 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.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4.
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing. Person, 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-97-26 and should be submitted by July 22, 
1997.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority. \8\
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    \8\ 17 CFR 200.30-(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-17168 Filed 6-30-97; 8:45 am]
BILLING CODE 8010-01-M