[Federal Register Volume 66, Number 39 (Tuesday, February 27, 2001)]
[Notices]
[Page 12581]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-4752]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43989; File No. SR-Phlx-00-94]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change by the Philadelphia Stock Exchange, Inc. Relating to Prohibition 
to Harassment and Other Improper Behavior Because of Listing or 
Competitive Practices

February 20, 2001.

I. Introduction

    On November 13, 2000, the Philadelphia Stock Exchange, Inc. 
(``Phlx'' or ``Exchange'') submitted to the Securities and Exchange 
Commission (``Commission''), pursuant to section 19(b)(1) of the 
Securities and Exchange Act of 1934 (``Act'')\ 1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to add new Commentary .01 
(``Prohibition Against Harassment'') to the Exchange's Rule 707 (``Just 
and Equitable Principles of Trade''), to prohibit members, member 
organizations, or persons associated with or employed by members or 
member organizations from engaging in harassment and other improper 
behavior because of listing or competitive practices.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    The proposed rule change was published for comment in the Federal 
Register on December 28, 2000.\3\ No comments were received on the 
proposal. This order approves the proposal.
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    \3\ Securities Exchange Act Release No. 43739 (December 19, 
2000), 65 FR 82440.
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II. Description of the Proposal

    The Phlx proposes to add new Commentary .01 (``Prohibition Against 
Harassment''), to prohibit members, member organizations, or persons 
associated with or employed by members or member organizations from 
engaging in harassment and other improper behavior because of listing 
or competitive practices.
    Specifically, proposed new Commentary .01 to Phlx Rule 707 would 
state that it is conduct inconsistent with just and equitable 
principles of trade for any member, member organization, or person 
associated with or employed by a member or member organization to 
directly or indirectly threaten, harass, intimidate, refuse to deal 
with, or retaliate against any member, member organization, person 
associated with or employed by a member or member organization, or 
other market participant because such member, member organization, 
person associated with or employed by a member or member organization, 
or other market participant has: (i) Made a proposal to any exchange or 
other market to list or trade any option class; (ii) advocated or 
proposed to list or trade an option class on any exchange or other 
market; (iii) commenced making a market in or trading new option class 
on any exchange or other market; (iv) sought to increase the capacity 
of any options exchange or the options industry to disseminate quote or 
trade data; (v) sought to introduce new option products; or (vi) acted, 
or sought to act, competitively.

III. Discussion

    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,\4\ and in 
particular, with the requirements of section 6 of the Act.\5\ 
Specifically, the Commission finds that the proposal is consistent with 
sections 6(b)(5) of the Act \6\ in that it is designed to codify the 
Exchange's prohibition against harassment and improper practices in a 
manner that promotes just and equitable principles of trade, prevents 
fraudulent and manipulative acts and practices, maintains fair and 
orderly markets, and protects investors and the public interest.
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    \4\ 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).
    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(5).
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    Phlx's new Commentary .01 to Phlx Rule 707 provides generally that 
it is conduct inconsistent with just and equitable principles of trade 
for market members, member organizations, their employees, and 
associated persons engage in harassing and certain improper retaliatory 
actions as a result of another market participant's listing or 
competitive behavior. The Commission believes that this codification of 
existing practice in Phlx's Rules is a reasonable means to comply with 
the Commission's directive,\7\ and to prevent fraudulent and 
manipulative acts and practices, maintain fair and orderly markets, and 
protect investors and the public interest, as required by section 
6(b)(5) of the Act.
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    \7\ See note 4, supra.
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IV. Conclusion

    It is Therefore Ordered, pursuant to section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-Phlx-00-94) is approved.
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    \8\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-4752 Filed 2-26-01; 8:45 am]
BILLING CODE 8010-01-M