[Federal Register Volume 66, Number 110 (Thursday, June 7, 2001)]
[Notices]
[Pages 30783-30784]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-14313]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44373; File No. SR-Phlx-2001-19]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Philadelphia Stock Exchange, Inc. To Institute an 
Antitrust Compliance Policy

May 31, 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 5, 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

    Phlx has proposed to adopt an Antitrust Compliance Policy 
(``Compliance Policy''). The Compliance Policy, which applies to 
Exchange governors, committee members, employees, members, and member 
organizations (``Covered Persons''), is designed to highlight certain 
activities known to raise antitrust and competition-related concerns, 
provide general guidance in these areas, and suggest when Covered 
Persons may want to consult with the Phlx Antitrust Compliance Officer 
or his designated staff.
    The Compliance Policy states that it is the policy of the Exchange 
to comply with the antitrust laws and the settlements that Phlx and the 
other options exchanges entered into on September 11, 2000, with the 
Department of Justice (``DOJ'') and the Commission.\3\ The Compliance 
Policy also discusses the consequences of non-compliance with the 
antitrust laws, the settlements, and certain Exchange rules.
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    \3\ See United States v. American Stock Exchange LLC, Civil 
Action No. 00-CV-02174 (EGS) (D.C. Cir., December 6, 2000); In re 
Certain Activities of Options Exchanges, Securities Exchange Act 
Release No. 43268 (September 11, 2000).
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    The Compliance Policy discusses certain types of conduct that may 
raise behavioral issues. For example, the Compliance Policy state that 
certain agreements with other exchanges are prohibited by the 
settlements, various exchange rules, and/or codes of conduct: those 
indicating that any option class will be traded on only one exchange; 
those indicating that trading of option classes will be allocated among 
exchanges; and those requiring, preventing, or limiting the listing, 
delisting, or trading of any options class. The Compliance Policy 
states that engaging in harassment or other improper behavior connected 
with listing decisions or competitive-related practices is prohibited. 
It states also that listing and delisting decisions must be made in 
accordance with Exchange rules, policies, and procedures.
    In addition, the Compliance Policy states that harassment, 
retaliation, or intimidation relating to listing decisions, prices, 
spreads, or trade allocation should be reported to the Antitrust 
Compliance Officer or his designated staff.
    The text of the proposed rule change is available at the principal 
office of the Exchange and at the Commission's Public Reference Room.

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

1. Purpose
    The Exchange has long insisted that Covered Persons observe the 
highest standards of business ethics and fair dealing and has therefore 
filed with the Commission its Employee Code of Conduct and Code of 
Conduct of Board Members and Committed Members.\4\ In an effort to 
reinforce such standards, in particular with regard to antitrust and 
competition-related behavior, the Exchange is now proposing to file the 
Compliance Policy with the Commission.
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    \4\ See Securities Exchange Act Release No. 44057 (March 9, 
2001), 66 FR 15312 (March 16, 2001) (notice and accelerated partial 
approval of SR-Phlx-01-03).
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    The purpose of the Compliance Policy is to provide general guidance 
regarding antitrust and compliance-related issues, highlights 
activities known to raise concerns, and provide suggestions when to 
consult the Antitrust Compliance Officers or his designated staff. In 
addition, the compliance policy specifically deals with issues raised 
in the DOJ and Commission settlement orders.
    The Exchange believes that, by filing the Compliance Policy with 
the Commission, it would be uniformly applicable to, and violations 
enforceable against, all Covered Persons: Exchange governors, committee 
members, employees, members, and member organizations.
2. Statutory Basis
    Phlx believes the proposed rule change is consistent with section 6 
of the Act \5\ in general, and furthers the objectives of section 
6(b)(5) \6\ in particular, in that it is designed to prevent unsuitable 
actions by Exchange governors, committee members, employees, members, 
and member organizations regarding antitrust law and competition-
related behavior.
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    \5\ 15 U.S.C. 78f.
    \6\ 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 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

    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

[[Page 30784]]

(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-2001-19 and 
should be submitted by June 28, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12)

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-14313 Filed 6-6-01; 8:45 am]
BILLING CODE 8010-01-M