[Federal Register Volume 68, Number 37 (Tuesday, February 25, 2003)]
[Notices]
[Page 8790]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-4357]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47373; File No. SR-Phlx-2002-76]


Self-Regulatory Organizations; Order Granting Approval of 
Proposed Rule Change by Philadelphia Stock Exchange, Inc. Relating to 
Certain Rules Governing Participation in Crossing Transactions Effected 
on the Exchange

February 19, 2003.
    On November 21, 2002, the Philadelphia Stock Exchange, Inc. 
(``Phlx'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``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 certain Phlx Rules 
governing participation in crossing transactions effected on the 
Exchange. Specifically, the Phlx proposes to amend Phlx Rule 126, 
adding Supplementary Material (h) instituting an alternative procedure 
for crossing certain orders of 10,000 shares or greater (the 
``Alternative Procedure''). In addition, the Phlx proposes to amend 
Phlx Rule 229B, to allow specialists and floor brokers on the 
Exchange's equity floor to take advantage of the Alternative Procedures 
electronically. The proposed rule change, as amended, was published for 
notice and comment in the Federal Register on January 15, 2003.\3\ The 
Commission received no comments on the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 47140 (January 8, 2003), 
68 FR 2098.
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder 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 Section 6(b) of the Act \6\ in 
general, and furthers the objectives of Section 6(b)(5) of the Act \7\ 
in particular, in that it is designed to promote just and equitable 
principles of trade, to remove impediments to and to perfect the 
mechanism of a free and open market and a national market system and, 
in general, to protect investors and the public interest.
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    \4\ In approving this proposed rule change, the Commission has 
considered the proposed rule'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).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Exchange is concerned that in a decimal pricing environment a 
portion of the crossing business and corresponding Exchange volume 
could evaporate unless members and their customers receive the 
protection offered by the Alternative Procedures. The Commission 
believes that the Alternative Procedures strike a balance of interests 
of those members who are impacted by crossing transactions. Members 
attempting to execute crosses for their customers may be interested, on 
behalf of their customers, in obtaining a rapid execution of their 
order at a single price. Members submitting Updated Quotations may be 
interested in executing against with a portion of one side or the other 
of the cross because they see this as a favorable trade. The Commission 
finds that the proposal appears to be reasonably designed to allow both 
interests to be fulfilled by streamlining the crossing procedures while 
retaining the right of members to represent their best bid or offer 
through their response to the request for an Updated Quotation. The 
Commission also finds that the proposal protects the priority of agency 
orders by requiring that in no event shall an agency order in the book, 
having time priority, remain unexecuted after any other order at its 
price has been effected.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\8\, that the proposed rule change, as amended (SR-Amex-2002-76), be, 
and hereby is, approved.
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    \8\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
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pursuant to delegated authority.\9\

    \9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-4357 Filed 2-24-03; 8:45 am]
BILLING CODE 8010-01-P