[Federal Register Volume 67, Number 216 (Thursday, November 7, 2002)]
[Notices]
[Pages 67884-67885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-28284]



[[Page 67884]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46755; File No. SR-Phlx-2002-46]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by 
the Philadelphia Stock Exchange, Inc. Amending Various Phlx By-Laws and 
Rules to Remove References to the Secretary and Office of the Secretary 
to Properly Reflect Functions Performed by the Membership Services 
Department and its Director, the Director of the Examinations 
Department and the Floor Procedure Committee

October 31, 2002.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'')\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on October 2, 2002, the Philadelphia Stock Exchange, Inc. 
(``Phlx'' or ``Exchange'') submitted to 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 the Exchange. On October 28, 2002, the Phlx filed Amendment 
No. 1 to the proposed rule change.\3\ The Commission is publishing this 
notice to solicit comments on the proposed rule change, as amended, 
from interested persons.\4\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Murray L. Ross, Vice President and 
Secretary, Phlx, to Nancy Sanow, Assistant Director, Division of 
Market Regulation (``Division''), Commission, dated October 25, 2002 
(``Amendment No. 1''). In Amendment No. 1, the Phlx made technical 
corrections to its proposal and replaced the filing in its entirety.
    \4\ For purposes of calculating the effective date and the 60-
day abrogation period, the Commission considers the period to 
commence on October 28, 2002, the date that the Exchange filed 
Amendment No. 1.
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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 Phlx By-Law Article V, Section 5-7; 
Article XII, Sections 12-1(f)(1), (f)(2), (f)(4), (f)(5), (f)(8); 12-
4(a), (d); Article XV, Sections 15-1, 15-11, 15-12; Article XVII, 
Sections 17-1, 17-3; and Phlx Rules 21, 404, 600, 601, 602, 949, and 
1024 by removing references to Secretary and Office of the Secretary to 
properly reflect functions performed by the Phlx Membership Services 
Department and its Director, the Director of the Examinations 
Department and the Floor Procedure Committee.
    The text of the proposed rule change, as amended, is available at 
the Office of the Secretary, the Phlx, 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, 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 Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the 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 Phlx proposes to substitute references to Office of the 
Secretary and the Secretary with references to the Membership Services 
Department and its Director, primarily, in the various Exchange By-Law 
Article sections and Exchange rules relating to the membership 
processing performed at the Phlx. The proposed amendments recognize the 
functional split of responsibilities and functions now performed by the 
Phlx's Membership Services Department as opposed to the Phlx's Office 
of the Secretary. The Phlx's Membership Services Department, among 
other things, processes applications for membership, maintains mail and 
membership lists, conducts the market for memberships and foreign 
currency options participations, registers inactive nominees as well as 
compiles and issues the Exchange's Bulletin.
    Approximately a year ago, the Membership Services Department was 
created by the Phlx to align membership, foreign currency options 
participation, inactive nominee and approved lessor processing and 
functions in a single, dedicated department. Over time, the role of the 
Phlx's Office of the Secretary respecting these matters has been 
transferred. The Phlx's Office of the Secretary now relies on the 
Phlx's Membership Services Department to compile and keep current the 
membership, approved lessor, foreign currency options participant and 
inactive nominee lists. Thus, the Phlx represents that the purpose of 
the changes to Phlx Bylaw Article V, Section 5-7, and Phlx Rules 600 
and 601 are to reflect this situation. In the course of performing the 
processing functions, the Phlx's Membership Services Department 
compiles and issues the Exchange's Bulletin. This function is codified 
and the Phlx is eliminating the reference to the Secretary's Weekly 
Bulletin in Phlx By-Law Article XII, Section 12-4(d), Article XV, 
Section 15-1, as well as in Phlx Rule 949. The proposed changes to the 
following membership provisions also reflect a transfer of such 
functions: Phlx By-Law Article XII, Sections 12-1(f) and 12-4(a), 
Article XV, Sections 15-11 and 15-12, as well as Phlx Rules 21, 602, 
949 and 1024.
    Additionally, with respect to the proposed amendment to Phlx By-Law 
Article XVII Section 17-3, Investigation of Insolvency, the reference 
to the Secretary is being substituted by the Director, Membership 
Services Department and the Director of the Examinations Department 
because the Phlx believes that they are the appropriate staff officials 
to contact respecting an investigation for insolvency of a member or 
member organization.
    Similarly, the amendment to Phlx Rule 404 deletes the reference to 
the Secretary as the Exchange official referenced to officially close 
an Exchange contract in securities that has not been fulfilled 
according to its terms and substitutes the Floor Procedure Committee to 
perform that function because the Phlx believes that they are the 
appropriate entity to address the matter under the Exchange rules.\5\
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    \5\ The Phlx represents that the Floor Procedure Committee is 
the appropriate entity to address this matter because, currently, 
under Exchange Rule 124, trading disputes occurring on or related to 
the trading floor, if not settled by an agreement between the 
members interested, will be settled by a vote of the members knowing 
of the transaction in question; and if the dispute is still not 
settled, then it will be settled by a Floor Official. Exchange Rule 
124 also provides that Floor Official rulings are reviewable by the 
Exchange's Floor Procedure Committee. The Phlx also represents that 
this proposed amendment to current Exchange Rule 404 will not affect 
appeal or arbitration rights. Telephone conversation between Murray 
L. Ross, Vice President and Secretary, Phlx, and Sapna C. Patel, 
Attorney, Division, Commission, on October 31, 2002.
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    The Phlx believes that the proposed amendments are administrative 
in function and were reviewed by various Phlx Standing Committees, the 
Phlx Board and the membership without comment.
2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is

[[Page 67885]]

consistent with section 6(b) of the Act \6\ in general, and section 
6(b)(5) of the Act \7\ in particular, in that it is designed to promote 
just and equitable principles of trade, prevent fraudulent and 
manipulative acts and practices, and protect investors and the public 
interest by promoting the efficient processing and maintenance of the 
Exchange's membership, approved lessor, foreign currency options 
participation and inactive nominee lists and files.
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    \6\ U.S.C. 78f(b).
    \7\ 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

    The Exchange neither solicited nor received written comments.

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

    The proposed rule change, as amended, has become effective on 
October 28, 2002, the date of filing of Amendment No. 1, pursuant to 
section 19(b)(3)(A)(iii) of the Act \8\ and subparagraph (f)(3) of Rule 
19b-4 thereunder \9\ because it is concerned solely with the 
administration of the Exchange. 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)(iii).
    \9\ 17 CFR 240.19b-4(f)(3).
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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, as amended, 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 Section. 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-2002-46 and should be submitted by November 29, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-28284 Filed 11-6-02; 8:45 am]
BILLING CODE 8010-01-P