[Federal Register Volume 65, Number 217 (Wednesday, November 8, 2000)]
[Notices]
[Pages 67030-67031]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-28651]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43505; File No. SR-PCX-00-27]


Self-Regulatory Organizations; Notice of Filing of a Proposed 
Rule Change by the Pacific Exchange, Inc., Relating to Options Trade 
Reporting

November 1, 2000.
    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 August 5, 2000, the Pacific Exchange, Inc. (``PCX'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items, I, II and III below, which 
Items have been prepared by the PCX. 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.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The PCX proposes to amend Exchange Rule 6.69 to require Exchange 
options transactions to be reported immediately upon execution and no 
later than 90 seconds following execution of the trade. The PCX also 
proposes to amend Exchange Rule 10.13 to include Exchange Rule 6.69 in 
the Exchange's Minor Violation Plan (``Plan'').

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 PCX 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 purpose of the proposed rule change is to require options 
transactions to be reported within 90 seconds to the Options Price 
Reporting Authority (``OPRA''), which disseminates trade information to 
the investing public through vendors. Specifically, proposed Rule 
6.69(a) would require all Exchange members and member organization's 
who are required to report trades either directly to OPRA or to another 
party responsible for reporting trades to OPRA, to immediately report 
all trades to the Exchange for disseminations to OPRA within the 
required 90 second time frame.
    Currently, Commentary .01 to Exchange Rule 6.69 states that trade 
must be immediately reported at the time of execution. The Exchange 
proposes to require immediate trade reporting, and in any event, no 
later than 90 seconds following execution. This would serve as a 
specific time limit for trade participants and should enable the 
Exchange's Market Surveillance Department and Enforcement Department to 
monitor for violations of the rule. The Exchange also believes that the 
proposed rule change should facilitate transparency and help to create 
an accurate picture of market activity and enable the Exchange to 
better monitor compliance with the order handling and transparency 
rules, including limit order protection, priority, and best execution.
    The Exchange also proposes to amend Rule 10.13 to include 
violations of proposed Rule 6.69(a) in the Plan. The Exchange believes 
that the proposed rule is consistent with and furthers the goals and 
objectives of the Plan. The

[[Page 67031]]

Exchange believes that the proposed fine schedule of $100.00, $250.00 
and $500.00 for the first, second, and third violations, respectively, 
is reasonable and will serve as an effective deterrent of future 
violations.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \3\ in general, and furthers the 
objectives of Section 6(b)(5) \4\ in particular, in that it is designed 
to promote just and equitable principles of trade. The Exchange 
believes that the proposed rule also furthers the objectives of Section 
6(b)(6),\5\ in that it is designed to appropriately discipline members 
who violate the rules of the Exchange.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
    \5\ 15 U.S.C. 78f(b)(6).
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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 burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

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 on the 
proposed rule change.

III. Date of Effectiveness of the 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 Exchange 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 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 the Secretary, Securities and Exchange 
Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. 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. 
552, will be available for inspection and copying in the Commission's 
Public Reference Room. Copies of the filing will also be available for 
inspection and copying at the principal office of the PCX. All 
submissions should refer to the File No. SR-PCX-00-27 and should be 
submitted by November 29, 2000.

    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. 00-28651 Filed 11-7-00; 8:45 am]
BILLING CODE 8010-01-M