[Federal Register Volume 66, Number 231 (Friday, November 30, 2001)]
[Notices]
[Pages 59831-59832]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-29716]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45093; File No. SR-Phlx-2001-99]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. To Conform Rule 2001(b)(2)(viii) to the Seventeenth 
Amendment of the Intermarket Trading System Plan

November 21, 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 October 30, 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 Phlx. The Exchange 
filed this proposal under section 19(b)(3)(A) of the Act,\3\ and Rule 
19b-4(f)(6) thereunder,\4\ which renders the proposal effective upon 
filing with the Commission. 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\ 15 U.S.C. 78s(b)(3)(A).
    \4\ CFR 240.19b-4(f)(6). The Phlx requested that the Commission 
waive the 30-day operative delay. The Phlx provided the Commission 
with notice of its intention to file this proposal on September 20, 
2001.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Phlx proposes to amend subsection (b)(2)(viii) of Exchange Rule 
2001 (Intermarket Trading System) to provide for a 30-second commitment 
period to trade for orders received through the Intermarket Trading 
System (``ITS''), consistent with the 17th Amendment to the Intermarket 
Trading System Plan (``ITS Plan'' or ``Plan'').\5\ The text of the 
proposal is below. Additions are in italics; deletions are in brackets.
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    \5\ See Securities Exchange Act Release No. 44903 (October 3, 
2001), 66 FR 52159 (October 12, 2001) (``ITS Plan Amendment No. 
17''). The ITS is a National Market System plan, which was designed 
to facilitate intermarket trading in exchange-listed equity 
securities based on current quotation information emanating from the 
linked markets. See Securities Exchange Act Release No. 18536 (March 
4, 1982), 47 FR 10658 (March 11, 1982) (noticing the restated ITS 
Plan) and Securities Exchange Act Release No. 19456 (January 27, 
1983), 48 FR 4938 (February 3, 1983) (adopting the restated ITS 
Plan).
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Rule 2001. Intermarket Trading System
    (a) Unchanged.
    (b) Provisions of the Plan-By subscribing to and submitting the ITS 
Plan for filing with the Securities and Exchange Commission, the 
Exchange has agreed to comply to the best of its ability, and, absent 
reasonable justification or excuse, to enforce compliance by its 
members, with the provisions of the ITS Plan. In this connection, the 
following shall apply:
Intermarket Trading System (``ITS'')
    (1) Unchanged
    (2) Any ``commitment to trade'', which is transmitted by a member 
to another participating market center through ITS, shall be firm and 
irrevocable for the period of time following transmission as is chosen 
by the sender of the commitment. All such commitments to trade shall, 
at a minimum:
    (i)-(vii) Unchanged
    (viii) specify the time period during which the commitment shall be 
irrevocable, but if the time period is not specified in the commitment, 
the longer of the [two] three options available under the Plan shall be 
assumed by ITS.
    (3)-(6) Unchanged.

[[Page 59832]]

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 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. The 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 purpose of the proposed rule change is to conform Phlx Rule 
2001(b)(2)(viii) to ITS Plan Amendment No. 17.\6\
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    \6\ See supra note 5.
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    Presently, Phlx Rule 2001 provides that a commitment to trade 
shall, at a minimum, specify the length of the period in which that 
commitment is irrevocable, and if such information is not specified, 
the lesser of the two options available would apply. The two time-
periods available currently are one and two minutes.
    Among other things, ITS Plan Amendment No. 17 provides for the 
addition of a third option--a 30-second commitment period.\7\ The 30-
second option would be available, once installed by the Securities 
Industry Automation Corporation (``SIAC'') and implemented by the 
Exchange, on a six-month pilot basis.\8\
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    \7\ See ITS Plan Amendment No. 17, supra note 5.
    \8\ The Exchange will implement the six-month pilot on November 
30, 2001. See telephone conversation between Edith Hallahan, Deputy 
General Counsel, Phlx, and Jennifer Lewis, Attorney, Division of 
Market Regulation, Commission, on November 16, 2001.
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    Accordingly, the Exchange proposes to amend Phlx Rule 2001, which 
provides for trading through ITS, by replacing the current language in 
subsection (b)(2)(viii), which states that there are ``two'' 
irrevocable time-period options, with the word ``three,'' thereby 
mirroring ITS Plan Amendment No. 17.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\9\ in general, and furthers the 
objectives of section 6(b)(5),\10\ in particular, because it should 
promote just and equitable principles of trade, facilitate transactions 
in securities, remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, 
protect investors and the public interest.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 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 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

    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) does not become operative for 30 days after the date of filing, 
or such shorter time as the Commission may designate if consistent with 
the protection of investors and the public interest; provided that the 
Exchange has given the Commission written notice of its intent to file 
the proposed rule change, along with a brief description and text of 
the proposed rule change, at least five business days prior to the date 
of filing of the proposed rule change, or such shorter time as 
designated by the Commission, the proposed rule change has become 
effective pursuant to section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6)\12\ thereunder.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. The Phlx seeks to have the proposed 
rule change become operative immediately.
    The Commission, consistent with the protection of investors and the 
public interest, has determined to make the proposed rule change 
operative as of October 30, 2001.\13\
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    \13\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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    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.

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 consisten 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 filing will also be 
available for inspection and copying at the principal office of the 
Phlx. All submissions should refer to File No. SR-Phlx-2001-99 and 
should be submitted by December 21, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-29716 Filed 11-29-01; 8:45 am]
BILLING CODE 8010-01-M