[Federal Register Volume 63, Number 27 (Tuesday, February 10, 1998)] [Notices] [Page 6790] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 98-3276] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-39616; File No. SR-PHLX 97-49] Self-Regulatory Organizations; Order Granting Approval to Proposed Rule Change and Amendment No. 1 Thereto by the Philadelphia Stock Exchange, Inc., Relating to Exchange Approval of Member Advertising February 3, 1998. I. Introduction On November 13, 1997, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ the Philadelphia Stock Exchange, Inc. (``Phlx'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') a proposed rule change (SR-PHXL-97-49) to require Exchange approval of member advertising. On December 15, 1997, the Exchange filed Amendment No. 1 to the proposed rule change. The proposed rule change was published for comment in the Federal Register on December 29, 1997.\3\ No comments were received on the proposal. This order approves the proposal. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1)/ \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 39466 (December 18, 1997), 62 FR 67680. --------------------------------------------------------------------------- II. Description of the Proposal In the rule proposal, the Phlx proposed to amend Phlx Rule 605 to require member or foreign currency option participant organizations for which the Phlx is the designated examining authority (``DEA''): (1) to receive Exchange consent prior to using the Internet to provide market quotations or to advertise to the general public; (2) to receive prior Exchange consent before making use of radio or television broadcasts for any business purpose or broadcasting Exchange quotations on radio or television programs or via public telephone reports; and (3) to submit the text of all commercials or program materials about securities or investing sponsored by the firm on radio, television, public telephone or on the Internet, promptly following the program in which it was used. Further, the commentary to the rule which states that the provisions of the rule do not apply to advertisements, market letters and sales literature relating to options as defined in Rule 1049 would be deleted so that the rule would apply to all products traded on the Exchange, including, options. The Exchange filed Amendment No. 1 to make clear that print advertisements are also subject to prior Exchange review and approval under the new proposed language of Phlx Rule 605. III. Discussion After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder. the Commission believes the proposal is consistent with the requirements of 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, prevent fraudulent and manipulative acts and practices, and to protect investors and the public interest.\4\ --------------------------------------------------------------------------- \4\ In approving this rule, the Commission notes that it has also considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78(c)(f). --------------------------------------------------------------------------- The Commission believes that it is beneficial and in the public interest to add a layer of review to the advertisements of Phlx members. The Commission believes that the review process will protect investors because it will help prevent misleading advertisements and fraudulent practices. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\5\ that the proposed rule change (SR-PHLX-97-49) is approved. \5\ 15 U.S.C. 78s(b)(2). --------------------------------------------------------------------------- For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\6\ --------------------------------------------------------------------------- \6\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 98-3276 Filed 2-9-98; 8:45 am] BILLING CODE 8010-01-M