[Federal Register Volume 66, Number 111 (Friday, June 8, 2001)]
[Notices]
[Page 30971]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-14462]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44386; File No. SR-Phlx-2001-45]


Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Order Granting Approval of Proposed Rule Change Amending Rule 930

June 4, 2001.
    On April 20, 2001, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to amend Rule 930 to add 
paragraph (k).
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    Rule 930(k) relates to the Exchange's ability to allow a member who 
leases a membership (``lessee'') to pay past-due fees owed to the 
Exchange by the lessor under a lease agreement, on behalf of the 
lessor. Rule 930(k) states that the Exchange is a third party 
beneficiary of the lease agreement, and shall have the right to permit 
payment by a lessee of past-due fees owed to the Exchange by the 
lessor. The Rule further states that should the lessee pay such past 
due amounts, the lessee shall provide written notice to the lessor and 
the Exchange. Once the lessee has elected to make such payments, the 
lessee may continue to make such payments for a period of up to three 
months and set off such amounts, with notice to the Exchange and lessor 
against amounts due the lessor by the lessee. Furthermore, Rule 930(k) 
states that notwithstanding the terms of the lease agreement, a lessee 
will not be considered in default of the lease agreement solely by 
virtue of having elected to make such payments. The Exchange also 
amended Rule 930 to make certain minor technical amendments to the text 
of the rule in order to make the various paragraphs contained in the 
rule more consistent.
    The proposed rule change was published for comment in the Federal 
Register on May 2, 2001.\3\ The Commission received no comments on the 
proposal.
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    \3\ See Securities Exchange Act Release No. 44220 (April 25, 
2001), 66 FR 22059.
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    The Commission finds that the proposed rule change is consistent 
with the Act and the rules and regulations under the Act applicable to 
a national securities exchange \4\ and, in particular, the requirements 
of Section 6 of the Act \5\ and the rules and regulations thereunder. 
The Commission finds specifically that the proposed rule change is 
consistent with the requirement of Section 6(b)(5) \6\ because it is 
designed to promote just and equitable principles of trade and to 
protect investors and the public interest by enabling lessees to 
continue trading on the Exchange even when their respective lessors 
fail to pay fees owed the Exchange when due.
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    \4\ In approving this proposed rule change, the Commission has 
considered the proposal'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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    The Commission is not required under Section 19(b)(2) of the Act 
\7\ to find that a proposed rule change by a self-regulatory 
organization is lawful under state corporation law; in approving this 
proposal, the Commission is relying on the Phlx's representation that 
it has the general power under applicable provisions of Delaware law to 
modify Rule 930 by adding paragraph (k). The Commission is also relying 
on the Phlx's representations that proposed Rule 930(k) is permissible 
under Pennsylvania contract law. The Commission has not independently 
evaluated the accuracy of Phlx's representations regarding Delaware or 
Pennsylvania law.
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    \7\ 15 U.S.C. 78s(b)(2).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-Phlx-2001-45) is approved.
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    \8\ 15 U.S.C. 78s(b)(2).
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    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).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-14462 Filed 6-7-01; 8:45 am]
BILLING CODE 8010-01-M