[Federal Register Volume 63, Number 135 (Wednesday, July 15, 1998)]
[Notices]
[Pages 38223-38224]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18763]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40180; File No. SR-Phlx-98-22]
July 8, 1998.
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Philadelphia Stock Exchange, Inc., and Amendment No. 1
Thereto Relating to Amendments to Phlx Rule 931 Regarding Approved
Lessors
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 May 18, 1998, 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 Phlx.
On June 8, 1998, the Phlx filed an amendment to the proposal.\3\ The
Commission is publishing this notice to solicit comments on the
proposed rule change, as amended, 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 Murray L. Ross, Esq., Vice President and
Secretary, Phlx, to Michael Walinskas, Esq., Deputy Associate
Director, Division of Market Regulation, Commission, dated June
6,1998 (``Amendment No. 1''). In Amendment No. 1, the Phlx consents
to have the proposed rule change published for notice and comment
and treated pursuant to Section 19(b)(2) of the Act. In addition, in
Amendment No. 1 the Phlx proposes to adopt Commentary .01 to Phlx
Rule 931 which will require approved lessors to update Form U-4,
submitted pursuant to Phlx Rule 931(d), within thirty days of
learning that the information contained in Form U-4 has become
incomplete or inaccurate. Where an amendment to Form U-4 involves a
statutory disqualification as defined in Sections 3(a)(39) and
15(b)(4) of the Act, Commentary .01 will require that the amended
Form U-4 be submitted not later than ten (10) days after the
statutory disqualification occurs.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Phlx seeks to amend Phlx Rule 931, ``Approved Lessor.'' The
text of the proposed rule change is available at the Office of the
Secretary, the Phlx, and at the Commission.
II. Self-Regulatory Organization's Statements Regarding the
Proposed Rule Change
In its filing with the Commission, the Phlx 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 Phlx 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
The Phlx proposes to amend Phlx Rule 931 to substitute the word
``Exchange'' for the word ``Corporation'' throughout the rule and to
require disclosure on an initial and periodic (quarterly) basis of
lists of limited partners, limited liability organization members and
shareholders of corporate entities of approved lessors. Phlx Rule
931(d), as amended, will require a lessor who is a natural person to
file with the Exchange an attestation in a form prescribed by the
Exchange as to the source of funds used to purchase the membership in
addition to a completed Form U-4. For a lessor who is not a natural
person, Phlx Rule 931(d) will require that a statement of assets,
liabilities and net work and (1) if a partnership, an executed
partnership agreement along with executed Form U-4 for all partners who
are natural persons; (2) if a limited liability entity other than a
corporation, an executed copy of the operating agreement along with
accompanying Form U-4 for all such members who are natural persons; or
(3) if a corporation, the corporate articles of incorporation,
corporate by-laws, a listing of all officers, directors and
shareholders along with accompanying Form U-4s. For a lessor who is not
a natural person, Phlx Rule 931(e) will require periodic reports to be
submitted to the Exchange within seventeen business days after the
conclusion of the reporting period, in a form prescribed by the
Exchange, including but not limited to the following information: (i)
As of the last business day of each calendar quarter, a list of all
limited partners if the lessor is a limited partnership, a membership
list if the lessor is a limited liability entity other than a
corporation along with any new subscription agreements and shareholder
list if the lessor is a corporation, and (ii) any material change in
the corporate or organizations structure within ten days of the change
in the structure.
According to the Phlx, the proposed amended rule codifies existing
practices of the Exchange's Office of the Secretary and Examinations
Department respecting processing of applications for approval as an
approved lessor of the Phlx. The proposal will allow the Exchange to
monitor any changes in the ownership interest respecting the membership
or memberships held by approved lessors. The proposal will also allow
the Exchange to monitor for any potential statutory disqualifications
respecting shareholders, partners and members of limited liability
entities by requiring the filing of Form U-4 and amendments to Form U-4
for natural persons as well as various corporate, organizational
agreements or partnership interest disclosures for other entities.
The Phlx believes that the proposed rule change is consistent with
Section 6 of the Act,\4\ in general, and Section 6(b)(5),\5\ in
particular, 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 Competition
The Phlx does not believe that the proposed rule change will impose
any inappropriate burden on competition.
C. Self-Regulation Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants or Others
No written comments were either solicited or received.
[[Page 38224]]
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
Within 35 days of the date of 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 Phlx consents, the Commission will:
(A) by order approve such proposed rule change, or,
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, 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
file with the Commission, and all communications relating to the 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, NW,
Washington, DC 20549. Copies of such filing will also be available for
imspection and copying at the principal office of the Phlx. All
submissions should refer to File SR-Phlx-98-22 and should be submitted
within 21 days after the date of this publication.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-18763 Filed 7-14-98; 8:45 am]
BILLING CODE 8010-01-M