[Federal Register Volume 65, Number 61 (Wednesday, March 29, 2000)]
[Notices]
[Pages 16683-16684]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7730]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42564; File No. SR-Phlx-99-46]


Self-Regulatory Organizations; Order Granting Approval of 
Proposed Rule Change by the Philadelphia Stock Exchange, Inc. Relating 
to registration of Trading Floor Personnel

March 22, 2000.

I. Introduction

    On November 19, 1999, the Philadelphia Stock Exchange, Inc. 
(``Phlx'' or ``Exchange'') submitted to the Securities and Exchange 
Commission (``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act'') \1\and Rule 19b-4 
thereunder,\2\ a proposed rule change to require that all trading floor 
personnel be registered with the Exchange, trading floor personnel 
successfully complete specified examinations, and all member/
participant organizations notify the Exchange of any change in the 
status of such personnel.
    The proposed rule change was published for comment in the Federal 
Register on February 7, 2000.\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\ Securities Exchange Act Release No. 42365 (January 28, 
2000), 65 FR 5922.

---------------------------------------------------------------------------

[[Page 16684]]

II. Description of the Proposal

    The Phlx's proposed new Phlx Rule 620, Trading Floor Registration, 
requires that all trading floor personnel be registered with the 
Exchange, trading floor personnel successfully complete specified 
examinations, and all member/participant organizations notify the 
Exchange of any change in the status of such personnel. The Exchange 
also proposed amendments to Regulation 7(b), Required Filing for Floor 
Member Firm Employee Status Notices with the Exchange, to include 
members, non-members and clerks, to be consistent with the text of new 
Phlx Rule 620. \4\ The Phlx believes that this will enable the Exchange 
to monitor more efficiently individuals on the Exchange's trading 
floors, as well as their current status.
---------------------------------------------------------------------------

    \4\ Regulation 7 was enacted pursuant to Phlx Rule 60, 
Assessments for Breach of Regulations. See Securities Exchange Act 
Release No. 27629 (January 16, 1990), 55 FR 2469 (January 24, 1990) 
(SR-Phlx-90-01).
---------------------------------------------------------------------------

    Currently, Regulation 7(b) governs the termination of, or the 
initiation of change in the trading status of, an employee of a member/
participant firm who has been issued an Exchange access card and 
trading floor badge. New Phlx Rule 620 codifies Regulation 7(b) into a 
more comprehensive Exchange Rule. Phlx Rule 620(a) sets forth a 
comprehensive rule that addresses registration, examinations, 
termination and change in status of trading floor members, which 
includes floor brokers, specialists, and market makers, including 
Registered Options Traders on any Exchange trading floor. Phlx Rule 
620(b) addresses non-member/clerk registration of all trading floor 
personnel, including clerks, interns, stock execution clerks and any 
other associated persons of member/participant organizations who are 
not required to be registered pursuant to Phlx Rule 620(a).\5\
---------------------------------------------------------------------------

    \5\ The Exchange presently requires the completion of forms and 
procedures for registering new floor members pursuant to various 
Phlx Rules, including Rule 202, Registrant (Specialist); Rule 214, 
Violations of Rules (Specialist); Rule 604, Registration and 
Termination of Registered Person; Rule 623, Fingerprinting; Rule 
1020, Registration and Functions of Options Specialists; Rule 1014, 
Obligations and Restrictions Applicable to Specialists and 
Registered Options Traders; and Rule 1061, Registration of Floor 
Brokers.
---------------------------------------------------------------------------

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange, and in 
particular, with the requirements of Section 6 of the Act.\6\ 
Specifically, the Commission finds that the proposal is consistent with 
Sections 6(b)(5) \7\ and 6(c)(3)(B) \8\ of the Act.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ 15 U.S.C. 78f(c)(3)(B).
---------------------------------------------------------------------------

    The Commission finds that the proposal to require all floor 
personnel to be registered with the Exchange and to require all member/
participant organizations to notify the Exchange of any change in the 
status of such personnel is consistent with Section 6(b)(5).\9\ The 
Commission believes that by ensuring that trading floor personnel are 
properly registered and monitored on an ongoing basis through the 
notification mechanism, new Phlx Rule 620 promotes just and equitable 
principles of trade, removes impediments to and perfects the mechanism 
of a free and open market and a national market system and, in general, 
protects investors and the public interest in accordance with Section 
6(b)(5).\10\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b)(5).
    \10\ Id.
---------------------------------------------------------------------------

    Moreover, the Commission further finds that the proposal is 
consistent with Section 6(c)(3)(B),\11\ which empowers a national 
securities exchange to examine and verify the quantifications of an 
applicant to become a person associated with a member in accordance 
with procedures established by the rules of the exchange, and to 
require any person associated with a member, or any class of such 
persons, to be registered with the exchange in accordance with 
procedures so established. The Phlx's decision to expand its 
registration/notification requirements to all trading floor personnel, 
including non-member personnel such as clerks, is fully supported by 
the right of an Exchange to regulate associated persons pursuant to 
Section 6(c)(3)(B).\12\
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(c)(3)(B).
    \12\ Id.
---------------------------------------------------------------------------

IV. Conclusion

    It is Therefore Ordered, pursuant to Section 19(b)(2) of the 
Act,\13\ that the proposed rule change (SR-Phlx-99-46) be and hereby is 
approved.\14\
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(2).
    \14\ In approving this rule, the Commission has considered the 
proposed rule's impact on efficiency, competition and capital 
formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-7730 Filed 3-28-00; 8:45 am]
BILLING CODE 8010-01-M