[Federal Register Volume 67, Number 7 (Thursday, January 10, 2002)]
[Notices]
[Pages 1386-1388]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-595]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 45192; File No. SR-Phlx-2001-106]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc. Extending the Pilot Program for Exchange Rule 98, 
Emergency Committee Until May 30, 2002

December 26, 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 November 23, 2001, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
or ``Exchange'') filed a proposed rule change with the Securities and 
Exchange Commission (``SEC'' or ``Commission''). The proposed rule 
change is described in Items I, II, and III below, which Items have 
been prepared by the Exchange. The Exchange filed the proposed rule 
change pursuant to section 19(b)(3)(A) of the Act,\3\ and Rule 19b-
4(f)(6) thereunder,\4\ which renders the proposed rule change 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\ 17 CFR 240.19b-4(f)(6). The Exchange filed the pre-filing 
notice required by Rule 19b-4(f)(6) by filing a written description 
of the proposed rule change and the text of the proposed rule change 
on November 16, 2001.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange is proposing to extend the pilot program period for 
Rule 98, Emergency Committee until May 30, 2002. No changes to the 
existing rule language are being proposed.

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 Exchange 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 Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

[[Page 1387]]

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

1. Purpose
    On December 23, 1999, the Commission approved amendments to Rule 
98, Emergency Committee (the ``Committee''), which updated the 
composition of the Committee to reflect the current governance 
structure of the Exchange, on a 120-day pilot basis.\5\ The pilot has 
been extended five times, most recently to November 30, 2001.\6\ The 
pilot program is being extended again to May 30, 2002 as the Exchange 
and the Commission consider other changes to the composition of the 
Committee.
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    \5\ Securities Exchange Act Release No. 42272 (December 23, 
1999), 65 FR 153 (January 3, 2000) (SR-Phlx-99-42). In the approval 
order, the Commission requested that the Exchange examine the 
operation of the Committee to ensure that the Committee is not 
dominated by any one Exchange interest (e.g., On-Floor or Off-Floor 
interest). The Commission requested that the Exchange report back to 
the Commission on its views as to whether the Committee structure 
ensures that all Exchange interests are fairly represented by the 
Committee.
    \6\ Securities Exchange Act Release No. 42898 (June 5, 2000), 65 
FR 36879 (June 12, 2000) (SR-Phlx-00-41), extending the pilot 
program until August 21, 2000; Securities Exchange Act Release No. 
43169 (August 17, 2000), 65 FR 51888 (August 25, 2000) (SR-Phlx-00-
76), extending the pilot program until November 17, 2000. On July 
14, 2000, the Exchange filed a proposed rule change to effect the 
amendments on a permanent basis. SR-Phlx-00-63 (filed July 14, 
2000). In SR-Phlx-00-63 the Exchange also enclosed the Exchange's 
views as to whether the Committee structure ensures that all 
Exchange interests are fairly represented by the Committee. Because 
the Exchange was considering further changes to the Committee, SR-
Phlx-00-63 was withdrawn on June 15, 2001. The pilot program was 
extended again until April 30, 2001, Securities Exchange Act Release 
No. 43614 (November 22, 2000), 65 FR 75332 (December 1, 2000) (SR-
Phlx-00-101); and again until July 31, 2001, Securities Exchange Act 
Release No. 44245 (May 1, 2001), 66 FR 23961 (May 10, 2001) (SR-
Phlx-2001-44). The last extension of the pilot program was until 
November 30, 2001. Securities Exchange Act Release No. 44653 (August 
3, 2001), 66 FR 43289 (August 17, 2001) (SR-Phlx-2001-70).
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    The Exchange originally proposed to amend Rule 98, Emergency 
Committee, by updating the composition of the Committee to correspond 
with previous revisions to the Exchange's governance structure,\7\ and 
by deleting a provision authorizing the Committee to take action 
regarding CENTRAMART, an equity order reporting system which is no 
longer used on the Exchange Equity Floor.
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    \7\ See Securities Exchange Act Release No. 38960 (August 22, 
1997), 62 FR 45904 (August 29, 1997) (SR-Phlx-97-31).
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    The Committee was formed in 1989 \8\ prior to the aforementioned 
changes to the Exchange's governance structure. The original proposed 
rule change, approved by the Commission, deleted the word ``President'' 
from the rule, as the Exchange no longer has a ``President,'' and 
included the Exchange's On-Floor Vice Chairman \9\ as a member of the 
Committee.
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    \8\ See Securities Exchange Act Release No. 26858 (May 22, 
1989), 54 FR 23007 (May 30, 1989) (SR-Phlx-88-36).
    \9\ See also Exchange By-Law, Article IV, Section 4-2.
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    Thus, Rule 98 specifies the composition of the Emergency Committee 
to include the following individuals: The Chairman of the Board of 
Governors; the On-Floor Vice Chairman of the Board of Governors; and 
the Chairmen of the Options Committee, the Floor Procedure Committee, 
and the Foreign Currency Options Committee.
    Extension of the pilot program through May 30, 2002 permits the 
Committee to reflect the current governance structure of the Exchange 
and ensures that the Committee will be in place to take necessary and 
appropriate action to respond to extraordinary market conditions or 
other emergencies.\10\ The extension of the pilot program will also 
allow the Exchange and the Commission the necessary time to propose 
changes to the Committee's structure to meet the Commission's concerns 
about whether the Committee ensures that all interests of the Exchange 
(e.g., On-Floor and Off-Floor) are adequately represented by the 
Committee, particularly in light of the events of September 11, 2001.
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    \10\ Previously, the Exchange has described ``extraordinary 
market or emergency conditions'' as, among other things, a 
declaration of war, a presidential assassination, an electrical 
blackout, or events such as the 1987 market break or other highly 
volatile trading conditions that require intervention for the 
market's continued efficient operation. Letter dated March 15, 1989, 
from William W. Uchimoto, General Counsel, Exchange, to Sharon L. 
Itkin, Esquire, Commission, Division of Market Regulation.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6 \11\ of the Act in general, and with Section 6(b)(5) 
\12\ of the Act in specific, in that it is designed to perfect the 
mechanisms of a free and open market and a national market system, and 
to protect investors and the public interest, by updating the 
composition of the Emergency Committee to reflect the current 
governance structure of the Exchange, and by continuing to provide a 
regular procedure for the Exchange to take necessary and appropriate 
action to respond to extraordinary market conditions or other 
emergencies.\13\
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    \11\ 15 U.S.C. 78f.
    \12\ 15 U.S.C. 78f(b)(5).
    \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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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.

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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    The foregoing rule change has become effective upon filing pursuant 
to section 19(b)(3)(A)(iii) of the Act \14\ and Rule 19b-4(f)(6)\15\ 
thereunder because the proposed rule change does not (i) significantly 
affect the protection of investors or their public interest; (ii) 
impose any significant burden on competition; and (iii) become 
operative for 30 days from the date on which the proposed rule change 
was filed, or such shorter time as the Commission may designate. At any 
time within 60 days of the filing of a rule change pursuant to section 
19(b)(3)(A) of the Act, the Commission may summarily abrogate the 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.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6).
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    The Commission finds that it is appropriate to accelerate the 
operative date of the proposed rule change and to permit the proposed 
rule change to become immediately operative because the proposal simply 
extends a previously approved pilot program until May 30, 2002. No 
changes to Rule 98 are being proposed at this time and the Commission 
has not received any comments on the pilot program. In addition, the 
Exchange appropriately filed a pre-filing notice as required by Rule 
19b-4(f)(6).\16\
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    \16\ 17 CFR 240.19b-4(f)(6).
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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.

[[Page 1388]]

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 fling will also be available for 
inspection and copying at the principal office of the Phlx. All 
submissions should refer to the File No. SR-Phlx-2001-106 and should be 
submitted by January 31, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-595 Filed 1-9-02; 8:45 am]
BILLING CODE 8010-01-M