[Federal Register Volume 67, Number 120 (Friday, June 21, 2002)]
[Notices]
[Pages 42307-42308]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-15710]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46082; File No. SR-PCX-2002-29]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. 
Relating to a One-Year Extension of the Auto-Ex Book Function Pilot 
Program

June 17, 2002.
    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 June 4, 2002, the Pacific Exchange, Inc. (``PCX'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``SEC'' or 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by PCX. PCX 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 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\ 17 CFR 240.19b-4(f)(6).
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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 Automatic Execution System 
(``Auto-Ex'') Book function pilot program for one year. The text of the 
proposed rule change is available at the PCX and at the Commission.

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

    In its filing with the Commission, PCX 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

[[Page 42308]]

in Item IV below. The PCX 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
    On June 22, 2001, the Commission approved a one-year pilot program 
for the operation of the Exchange's Auto-Ex Book function.\5\ The pilot 
program is currently set to expire on June 22, 2002.
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    \5\ See Securities Exchange Act Release No. 44468 (June 22, 
2001), 66 FR 34505 (June 28, 2001).
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    The Auto-Ex Book function permits orders in the Limit Order Book to 
be executed via the Auto-Ex system when those orders become marketable 
subject to certain procedures. The function may be used when one or 
more orders in the Limit Order Book become marketable, as indicated by 
a locked or crossed market being displayed on the trading floor. When 
this occurs, the Lead Market Maker may direct the Order Book Official 
to initiate the Auto-Ex Book function, which will cause marketable 
orders in the Limit Order Book to be automatically executed against the 
accounts of market makers who are participating on the Auto-Ex system 
at the time.
    The Exchange is requesting an extension of the pilot program for 
one year from June 22, 2002 to June 22, 2003. The added time permits 
the Exchange an opportunity to continue reviewing and evaluating the 
program. The Auto-Ex book function is operating as intended and 
provides a service to both customers and members by facilitating the 
execution of orders in the Limit Order Book. This function is often 
used in fast markets to provide quicker executions of booked orders 
thereby maintaining a fair and orderly market. The Exchange believes 
that this program is operating successfully and without any problems, 
and on that basis, the Exchange believes that a one-year extension of 
the program is warranted.
2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with section 6(b)\6\ of the Act, in general, and further the objectives 
of section 6(b)(5),\7\ in particular, in that they are designed to 
facilitate transactions in securities, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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 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

    Written comments on the proposed rule change were neither solicited 
nor received.

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

    The Exchange has designated the foregoing rule change as effecting 
a change that: (1) Does not significantly affect the protection of 
investors or the public interest; (2) does not impose any significant 
burden on competition; and (3) by its terms does not become operative 
for 30 days from the date of filing. In addition, the Exchange provided 
the Commission with written notice of its intent to file the proposed 
rule change at least five days prior to the filing date. Accordingly, 
the proposed rule change has become effective pursuant to section 
19(b)(3)(A) of the Act \8\ and rule 19b-4(f)(6) thereunder.\9\ At any 
time within 60 days of the filing of such 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.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
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    PCX has requested that the Commission waive the 30-day waiting 
period, and that the extension become operative on or before June 22, 
2002. The Commission believes waiving the 30-day operative delay is 
consistent with the protection of investors and the public 
interest.\10\ Acceleration of the operative date will permit the Auto-
Ex Book function pilot to continue uninterrupted. For these reasons, 
the Commission designates the proposal to be operative on June 22, 
2002.
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    \10\ 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. See 15 
U.S.C. 78c(f).
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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. 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 
PCX. All submissions should refer to File No. PCX-2002-29 and should be 
submitted by July 12, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
Jill M. Peterson,
Assistant Secretary.
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    \11\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 02-15710 Filed 6-20-02; 8:45 am]
BILLING CODE 8010-01-P