[Federal Register Volume 62, Number 206 (Friday, October 24, 1997)]
[Notices]
[Pages 55449-55450]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-28239]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39258; File No. SR-PHLX-97-40]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. Relating to the Amendment of Exchange Rules to Comply 
With Recent Modifications to the By-Laws of the Exchange

October 20, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on September 24, 1997, the 
Philadelphia Stock Exchange, Inc. (``PHLX'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'' or ``SEC'') the 
proposed rule change as described in Items I, II, and III below, which 
Items have been prepared by the Exchange. 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 seeks to amend Exchange Rules 500 and 960.9 to comply 
with recent modifications made to the By-Laws of the Exchange.
    The text of the proposed rule change is available at the Office of 
the Secretary, the Exchange and 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 Exchange 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 Exchange 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
    The Exchange recently received regulatory approval to revise the 
governance structure of the Exchange.\2\ As part of the restructuring, 
revisions were made to the By-Laws and Articles of Incorporation of the 
Exchange. In its proposed rule change, the Exchange seeks to make 
corresponding revisions to two of its rules, Rule 500 and Rule 960.9, 
to conform to the new By-Laws where necessary. The proposed amendments 
would modify rules that concern the structure and procedures of two of 
the Exchange's standing committees, the Allocation, Evaluation and 
Securities Committee (``AES Committee'') and the Business Conduct 
Committee (``BC Committee'').
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    \2\ See Securities Exchange Act Release No. 38960 (Aug. 22, 
1997), 62 FR 45904 (Aug. 29, 1997).
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Rule 500  (Allocation, Evaluation and Securities Committee)
    The Exchange proposes to revise Rule 500 to specify the revised 
composition of the AES Committee. Under the prior version of By-Law 
Article X, Section 10-7, the AES Committee was composed of five core 
members and twenty members of an allocation panel. Under revised By-Law 
Article X, Section 10-7, there may only be nine members on the 
Committee. Of those nine members, some will be core members who serve 
three year terms while others will be annual members who may serve up 
to three consecutive one year terms. Revised By-Law Article X, Section 
10-7 refers to Exchange Rule 500 for the number and categories of 
persons eligible to serve as core members and annual members. Because 
Rule 500 currently provides that there will be five core members and 
twenty panel members, it must be modified to comply with the terms of 
revised By-Law Article X, Section 10-7 which provides for a total of 
nine members on the AES Committee. The Exchange proposes to maintain 
the same number of core members, five, and the same selection 
categories for core members: (i) three persons who conduct a public 
securities business; (ii) one person who is active on the equity 
trading floor as a specialist or floor broker; and (iii) one person who 
is active on the options trading floor as a specialist, registered 
options trader or floor broker. Rule 500 would be amended to require 
that of the four annual members: (i) one be active on the equity 
trading floor as a specialist or floor broker; (ii) one be active on 
the equity options trading floor as a registered options trader; (iii) 
one be a public Governor; and (iv) one be a non-industry Governor.
Rule 960.9  (Business Conduct Committee)
    The Exchange proposes to amend Rule 960.9 by revising the 
provisions that set forth the appeal procedure for decisions rendered 
by the Business Conduct Committee. Under revised By-Law Article X, 
Section 10-11, appeals from the Business Conduct Committee will now go 
directly to the Board of Governors rather than the Disciplinary Review 
Committee.\3\ Accordingly, Rule 960.9 is being amended to provide that 
a Respondent who wishes to appeal a decision of the Business Conduct 
Committee must now comply with the appeal procedures set forth in By-
Law Article XI, Section 11-1 which governs appeals from all committees 
of the Board.
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    \3\ As part of its revised governance structure, the Exchange 
eliminated the Disciplinary Review Committee. Id.

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[[Page 55450]]

2. Statutory Basis
    The Exchange represents that the proposed rule change is consistent 
with Section 6 \4\ of the Act, in general, and furthers the objectives 
of Section 6(b)(1) \5\ of the Act, in particular, in that the 
streamlining of the Exchange's committee structure will enable the 
Exchange to enforce compliance by its members and persons associated 
with its members, with the provisions of the Act, the rules and 
regulations thereunder, and the rules of the Exchange.
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    \4\ 15 U.S.C. Sec. 78f.
    \5\ 15 U.S.C. Sec. 78f(b)(1).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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

    The Exchange did not solicit or receive written comments with 
respect to the proposed rule change.

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

    The foregoing rule change is concerned solely with the 
administration of the Exchange and constitutes a stated policy and 
practice of the Exchange with respect to the administration of the 
Exchange's By-Laws and, therefore, has become effective pursuant to 
Section 19(b)(3)(A) \6\ of the Act and subparagraph (e) of Rule 19b-4 
\7\ thereunder. 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.
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    \6\ 15 U.S.C. Sec. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(e).
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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. Sec. 552, will be available for inspection and copying in 
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-PHLX-97-40 and should be 
submitted by November 14, 1997.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-28239 Filed 10-23-97; 8:45 am]
BILLING CODE 8010-01-M