[Federal Register Volume 66, Number 26 (Wednesday, February 7, 2001)]
[Notices]
[Pages 9399-9401]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-3157]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43911; Filed No. SR-PCX-00-46]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. 
Relating to Prohibition of Harassment

January 31, 2001.
    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 December 13, 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

[[Page 9400]]

prepared by the Exchange. The proposed rule change has been filed by 
the Phlx as a ``non-controversial'' rule change under Rule 19b-4(f)(6) 
of the Act.\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\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The PCX proposes to adopt a new rule to prohibit harassment, 
intimidation, ``refusal to deal'' and retaliation in the option listing 
process and to prohibit harassment of another for ``seeking to act 
competitively.''
    The text of the proposed rule change is available at the Office of 
the Secretary, PCX and at the Commission.

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 PCX 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
    Currently PCX Rule 6.2(b) sets forth prohibitions on certain manner 
of conduct on the floor of the Exchange. Under this rule, a member will 
be sanctioned if two Floor Officials or the Options Floor Trading 
Committee make the determination that the member has acted in a manner 
that impairs the maintenance of a fair and orderly market or the 
member's conduct impairs public confidence in the operations of the 
Exchange. The purpose of the proposed rule is to broaden the scope of 
Rule 6.2 to prohibit harassment. The proposed rule seeks to prevent 
harassment and intimidation of members who act or seek to act 
competitively.
    The proposed rule would make it ``conduct inconsistent with just 
and equitable principles of trade for any member, member organization 
or associated person of a member or member organization to engage, 
directly or indirectly, in any conduct that threatens, harasses, 
intimidates, constitutes a `refusal to deal' or retaliate against any 
other member . . .'' because such member: (1) Has made a proposal to 
any exchange or other market to list or trade any option issue; (2) has 
advocated or made proposals concerning the listing or trading of an 
option issue on any exchange or other market; (3) has commenced making 
a market in or trading any option issue on any exchange or other 
market; (4) seeks to increase the capacity of any options exchange or 
the options industry to disseminate quote or trade data; (5) seeks to 
introduce new option products; or (6) seeks to act competitively.
    The PCX believes that the prohibited conduct discussed above is 
inconsistent with the obligation of all members to their customers, the 
Exchange, and the public interest in the operation of fair and 
efficient options markets. The PCX will strictly enforce the 
requirements of the proposed rule. Any violations of this rule will be 
referred to the Exchange's Enforcement Division for appropriate 
disciplinary action.\4\
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    \4\ The PCX will revise its Employee Handbook and Statements of 
Fiduciary Responsibilities for Governors and Committee Members to 
include the same prohibitions on harassment. The Exchange must file 
with the Commission a proposed rule change incorporating these 
additional changes. Telephone call from Geoffrey Pemble, Attorney, 
Division of Market Regulation, SEC, to Hassan Abedi, Attorney, 
Regulatory Policy, PCX (Janary 30, 2001).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\5\ in general, and furthers the 
objectives of section 6(b)(5),\6\ in particular, in that it is designed 
to promote just and equitable principles of trade, prevent fraudulent 
and manipulative acts and practices, and protect investors and the 
public interest by prohibiting harassment in the listing of options.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 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 burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received from Members, Participants, or Others

    Written comments were neither solicited nor received.

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

    The proposed rule change has been filed by the Exchange as ``non-
controversial'' rule change pursuant to section 19(b)(3)(A) of the Act 
\7\ and Rule 19b-4(f)(6) thereunder.\8\ Because the foregoing proposed 
rule change: (1) Does not significantly affect the protection of 
investors or the public interest, (2) does not impose any significant 
burden on competition, and (3) by its terms does not become operative 
for 30 days after the date of this filing, or such shorter time as the 
Commission may designate, it has become effective pursuant to section 
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) \10\ thereunder.\11\ At 
any time within 60 days of the filing of the proposed rule change, the 
Commission may summarily abrogate such rule change if it appears to the 
Commission that such action is necessary or appropriate in the public 
interest, for the protection of investors, or otherwise in furtherance 
of the purposes of the Act.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ The Exchange provide the Commission with the five business 
day notice required by Rule 19b-4(f)(6) of the Act.
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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 20549-0609. 
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 at the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
Exchange. All submissions should refer to the File No. SR-PCX-00-46 and 
should be submitted by February 28, 2001.

[[Page 9401]]

    For the Commission, by the Division of Market Regulation, pursuant 
to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-3157 Filed 2-6-01; 8:45 am]
BILLING CODE 8010-01-M