[Federal Register Volume 66, Number 60 (Wednesday, March 28, 2001)]
[Notices]
[Pages 16966-16968]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-7598]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44088; File No. SR-Phlx-01-21]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Philadelphia Stock Exchange, Inc. Relating to Primary 
Trading Session Hours for Equities Whose Primary Market Is Not the 
Exchange

March 20, 2001.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on March 16, 2001, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
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 Exchange. 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 Exchange proposes to amend Phlx Rule 101 to establish the 
Primary Trading Session hours of securities whose primary market is not 
the Exchange. Under the proposal, the first trading session (``Primary 
Trading Session'') would be conducted on the floor of the Exchange 
during the same hours the security is trading on its primary market, if 
the Exchange is not the primary market for such security, provided, 
however, that if the primary market for such security is PCX Equities, 
Inc., the Primary Trading Session for such security shall end no later 
than 4 p.m. Eastern Time.
    The text of the proposed rule change appears below. New text is in 
italics; deletions are in brackets.
Rule 101--Hours of Business
* * * * *
    Supplementary Material:
* * * * *
    .02 Equity Trading Hours. Unless otherwise announced by the 
Exchange:
    (i) The first trading session (the ``Primary Trading Session'') 
will be conducted on the floor of the Exchange (1) during the same 
hours the security is traded on its primary market, if the Exchange is 
not the primary market for such security, provided, however, if the 
primary market for such security is PCX Equities, Inc.,\3\ the Primary 
Trading Session for that security shall end no later than 4 p.m. 
Eastern time; or (2) from 9:30 a.m. to 4 p.m. Eastern time, Monday 
through Friday, if the Exchange is the primary market for such 
security. [Trading in any equity security on the Exchange's equity 
trading floor--

[[Page 16967]]

shall commence at 9:30 a.m. and end at 4 p.m., each business day, 
unless otherwise announced by the Exchange, except that:]
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    \3\ In the original proposed rule text, Phlx identified this 
entity as the ``Pacific Stock Exchange.'' The final rule text will, 
as shown here, use the term ``PCX Equities, Inc.'' Telephone 
conversation between Diana Tenenbaum, Counsel, Phlx, and Michael 
Gaw, Special Counsel, Division of Market Regulation, Commission, on 
March 19, 2001. Conforming changes have been made to the draft 
Federal Register notice provided by Phlx.
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    (ii) [t]The Post-Primary session (``PPS'') will operate from 4 to 
4:15 p.m., for PPS-designated orders pursuant to Rule 232(b) for the 
purchase and sale of securities traded on the Primary Trading Session 
until 4 p.m.[;]
    (iii) [t]The after hours trading facility for GTX orders will 
operate pursuant to Rule 232(c). [;and
    (iii) Transactions in Nasdaq-100 Index Tracking Stock may be 
effected on the Exchange until 4:15 p.m. each business day as well as 
pursuant to Rule 232(c).]
* * * * *

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, 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. 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

I. Purpose
    The purpose of the proposed rule change is to establish in Phlx 
Rule 101 the Primary Trading Session hours for equities whose primary 
market is not Phlx. Phlx Rule 101 is a general provision dealing with 
hours of business on the Exchange. Supplementary Material .02 to Rule 
101 provides that ``[t]rading in any equity security on the Exchange's 
equity trading floor shall commence at 9:30 a.m. and end at 4 p.m. each 
business day, unless otherwise announced by the Exchange * * *'' This 
broad provision is applicable to all equities. However, subsection 
(iii) of Supplementary Material .02 states that trading in Nasdaq 100 
Index Tracking stock \sm\ will take place until 4:15 p.m.
    The proposed rule defines ``Primary Trading Session'' to track the 
hours of trading of each security on its primary market. Proposed 
Supplementary Material .02 states that the Primary Trading Session will 
be conducted during the same hours as the primary trading session on 
the security's primary market. The proposed rule change provides that, 
if the primary market for such security is PCX Equities, Inc., the 
Primary Trading Session shall end no later than 4 p.m. Eastern Time. 
Since the proposed rule change set forth trading hours of all the 
equities traded primarily on other exchanges (including Nasdaq 100 
Index Tracking Stock \sm\, the Exchange proposes to delete subsection 
(iii).
    The proposed amendment's general definition should help to 
accommodate future changes in the trading hours of the equities at 
their primary market, without the need of periodic amendments. 
Furthermore, as the number of products traded on the Exchange on an 
Unlisted Trading Privileges (``UTP'') basis grows, so will the need for 
rules establishing trading parameters for these products. Proposed 
Supplementary Material .02 should be broad enough to address the 
trading hours of all UTP equity products that will be traded on Phlx in 
the future, without requiring additional rule amendments stating the 
specific trading hours of each new product.
    In practice, the proposed rule change will not effect a change in 
the current trading hours of the equities traded on Phlx. All equity 
trading on Phlx is conducted between the hours of 9:30 a.m. and 4 p.m. 
(the Primary Trading Session hours), except for the Post Primary 
Session (``PPS'') and other specific cases stated in Phlx Rule 101. 
Under the proposed rule change, for equities traded on the Primary 
Trading Session until 4 p.m., PPS would continue to take place from 4 
p.m. and 4:15 p.m. Equities whose Primary Trading Session ends after 
PPS began cannot be traded on PPS. The proposed rule change does not 
change the PPS trading hours.
2. Statutory Basis
    Phlx believes the proposed rule change is consistent with Section 6 
of the Act \4\ in general, and furthers the objectives of Section 
6(b)(5) \5\ in particular, in that it provides investors and the public 
as a whole with an alternative forum for trading, which operates during 
the same hours as the primary market. Phlx asserts that the proposed 
amendment should result in greater liquidity and more competitive 
pricing for the equities traded both on Phlx and on the primary market 
during the same hours.
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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 on Competition

    Phlx does not believe that the proposed rule change would impose 
any inappropriate burden on competition.

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

    No written comments were either solicited or received.

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 with 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 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 in the 
Commission's Public Reference Room. Copies of such filings will also be 
available for inspection and copying at the principal office of the 
Phlx. All submissions should refer to File No. SR-Phlx-01-21 and should 
be submitted by April 18, 2001.


[[Page 16968]]


    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. 01-7598 Filed 3-27-01; 8:45 am]
BILLING CODE 8010-01-M