[Federal Register Volume 63, Number 78 (Thursday, April 23, 1998)]
[Notices]
[Pages 20236-20238]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10750]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39881; File No. SR-PCX-98-16]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change and Amendment No. 1 Thereto by the Pacific Exchange, Inc., 
Relating to Communication Devices on the Trading Floor

April 16, 1998.
    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 March 31, 1998, the Pacific Exchange, Inc. (``PCX''

[[Page 20237]]

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. On April 16, 1998, the Exchange filed 
Amendment No. 1 to the proposal with the Commission.\3\ 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.
    \3\ See letter from Michael D. Pierson, Senior Attorney, PCX to 
David Sieradzki, Attorney, Commission dated April 13, 1998 
(Amendment No. 1). In Amendment No. 1, the Exchange clarified the 
purpose section of the filing.
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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 adopt new Rule 4.22 relating to 
telephone and electronic communications on the trading floors of the 
Exchange.
Text of Proposed Rule Change.\4\
para.38  Communications to and on the Floor
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    \4\ Italics indicates text to be added and brackets indicates 
material to be deleted.
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    Rule 4.22  No Member of Member Organization may establish or 
maintain any telephonic or electronic communication between the Floor 
and any other location, or between locations on the Floor, without the 
prior approval of the Exchange
    [OFPA  F-3  para.7803 Subject: Communication Access To and From the 
Options Trading Floor Pursuant to Rule XVII, prior approval by the 
Exchange will be required before the installation of any form of direct 
private communication devices, including PT&T and Western Union voice 
lines and teletype or similar hard copy wire connections. Such approval 
will be granted only if the connection from the Options Trading Floor 
terminates in one of the following manners: (1) At an office of a PSE 
member organization. (2) At a floor facility of a PSE member 
organization on the Options Trading Floor of another national 
securities exchange, subject to the approval of that exchange. (3) At 
either of the Equity Trading Floor of PSE. Approval will not be granted 
for connections terminating at any facility of a person or organization 
who or which is not a member organization of PSE. Standard (non-
private, non-direct) telephones may be installed on the Options Trading 
Floor in member organizations assigned floor booths as desired but all 
requests for such installation must be directed to the Options Floor 
Manager for purposes of coordination. In making use of communications 
access to and from the Options Trading Floor members are reminded of 
the provisions of Section 12(k) of Rule I.]

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
    The Exchange is making this proposed rule change as a housekeeping 
measure to assure that the Exchange's rules state expressly that 
Members and Member Organizations must obtain prior approval before 
establishing or maintaining telephonic or electronic communications 
between the Floor and other locations, or between locations on the 
Floor. The Exchange believes that the provision will improve upon its 
current rules, including Options Floor Procedure Advice F-3,\5\ by 
providing its Members and Member Organizations with clear notice of the 
requirement for Exchange approval.
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    \5\ The Commission notes that, as part of the current filing, 
the Exchange proposes to delete Options Floor Procedure Advice F-3.
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    The Exchange is proposing to adopt new Rule 4.22, which provides 
that no Member or Member Organization may establish or maintain any 
telephonic or electronic communication between the Floor and any other 
location, or between locations on the Floor, without the prior approval 
of the Exchange.
    The Exchange is also proposing to eliminate Options Floor Procedure 
Advice (``OFPA'') F-3 relating to communication access to and from the 
Options Trading Floor. The Exchange believes that proposed Rule 4.22 
adequately replaces OFPA F-3, which is obsolete.
    The Exchange notes that proposed Rule 4.22 is substantially similar 
to Rule 220 of the American Stock Exchange and Rule 6.23 of the Chicago 
Board Options Exchange.
2. Statutory Basis
    The proposal is consistent with Section 6(b) \6\ of the Act, in 
general, and Section 6(b)(5) \7\ of the Act, in particular, in that it 
is designed to protect investors and the public interest and to promote 
just and equitable principles of trade.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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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

    No written comments were either solicited or received.

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

    Within 35 days of the publication of this notice in the Federal 
Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) by order approve the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. 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. Sec. 552, will be available for inspection and copying at 
the Commission's Public Reference Room. Copies of such filing will also 
be available for inspection and copying at

[[Page 20238]]

the principal office of the Exchange. All submissions should refer to 
File No. SR-PCX-98-16 and should be submitted by May 14, 1998.

    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. 98-10750 Filed 4-22-98; 8:45 am]
BILLING CODE 8010-01-M