[Federal Register Volume 68, Number 49 (Thursday, March 13, 2003)]
[Notices]
[Pages 12134-12138]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-6072]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47467; File No. SR-PCX-2002-75]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change by the Pacific Exchange, Inc., as Amended, and Notice of Filing 
and Order Granting Accelerated Approval to Amendment No. 2 Relating to 
New Order Types and To Amend PCXE Rule 7.37

March 7, 2003.

I. Introduction

    On December 9, 2002, pursuant to section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'')\1\ and Rule 19b-4 thereunder,\2\ the 
Pacific Exchange, Inc. (``PCX'' or ``Exchange''),

[[Page 12135]]

through its subsidiary, PCX Equities, Inc. (``PCXE''), filed with the 
Securities and Exchange Commission (``Commission'') a proposed rule 
change to establish new order types on the Archipelago Exchange 
(``ArcaEx''), the equity facility of the PCXE, and to amend the ArcaEx 
Working Order Process to enable the execution of such order types. The 
PCX filed Amendment No. 1 to the proposal on January 15, 2003.\3\ The 
PCX filed Amendment No. 2 on March 7, 2003.\4\ The proposed rule 
change, as amended by Amendment No. 1, was published for comment and 
appeared in the Federal Register on January 29, 2003.\5\ The Commission 
received no comment letters in response to the proposed rule change. 
This order approves the PCX's proposed rule change, as amended, and 
notices and grants accelerated approval to Amendment No. 2 to the 
proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange submitted a new Form 19b-4, 
which replaced the original filing in its entirety.
    \4\ See Letter from Peter Bloom, Acting Managing Director, 
Regulatory Policy, PCX, to Marc McKayle, Special Counsel, Division 
of Market Regulation, Commission, dated March 7, 2003 (``Amendment 
No. 2''). In Amendment No. 2, the Exchange made various clarifying 
and technical amendments to the proposed rule text to: (1) Reference 
the ``Joint Self-Regulatory Organization Plan Governing the 
Collection, Consolidation and Dissemination of Quotation and 
Transaction Information for Nasdaq-Listed Securities Traded on 
Exchanges (``Nasdaq Unlisted Trading Privileges Plan'') in proposed 
PCXE Rule 1.1(aa), (2) clarify that the term ``OTC/UTP Listing 
Market'' shall have a meaning consistent with the Nasdaq Unlisted 
Trading Privileges Plan, (3) clarify the definition of ``Sweep 
Reserve Order'' by replacing the word ``price'' with the word 
``size,'' (4) clarify the definition of ``Random Reserve Order'' by 
indicating that the random reserve value is expressed in round-lot 
increments and by correcting a grammatical error, (5) amend the 
definition of ``Pegged Order'' to reflect that the display price 
will track the relevant Consolidated Quote information for such 
orders on a real-time basis and that the displayed price of a Pegged 
Order designated as a Discretionary Order will track the National 
Best Bid or Offer (``NBBO''), and that the discretionary price of 
such order would re-price in correlation to any changes to the 
displayed price, and (6) clarify that Immediate or Cancel (``IOC''), 
NOW, Post No Preference (``PNP''), Passive Discretionary, Discretion 
Limit, IOC Cross and PNP Cross orders in Nasdaq securities would 
received executions no worse than the ArcaEx Best Bid or Offer 
(``BBO'').
    \5\ Securities Exchange Act Release No. 47223 (January 21, 
2003), 68 FR 4527 (January 29, 2003) (SR-PCX-2002-75).
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II. Description of the Proposal

    The proposal would amend PCXE rules to: (1) Adopt several new order 
types to accommodate the trading of securities listed on the Nasdaq 
Stock Market, Inc. (``Nasdaq''), on an unlisted trading privileges 
(``UTP'') basis; (2) amend PCXE Rule 7.37 to provide for a limited 
exemption from the ArcaEx guarantee of executions at the NBBO or better 
for certain order types trading Nasdaq securities; (3) reflect the 
operational requirements of two proposed order types in the Working 
Order Process; and (4) make various minor technical rule changes to 
conform to the Nasdaq UTP Plan, which extends UTP to Nasdaq SmallCap 
securities.

A. Proposed New Order Types

    As part of its ongoing preparation for the trading of Nasdaq 
securities on the ArcaEx pursuant to UTP,\6\ PCX proposes to make 
several new order types available to Electronic Trading Permit 
(``ETP'') Holders \7\ and Sponsored Participants \8\ (collectively 
``Users''), which are currently in use on the Archipelago electronic 
communication network (``ECN'').\9\ The proposed new order types are 
discussed below.
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    \6\ The Nasdaq UTP Plan was initially approved in 1990. See 
Securities Exchange Act Release No. 28146 (June 26, 1990), 55 FR 
27919 (July 6, 1990) (S7-24-89). It has subsequently been amended on 
several occasions to, among other things, admit new Participants. 
See also Securities Exchange Act Release No. 46381 (August 19, 
2002), 67 FR 54687 (August 23, 2002) (S7-24-89) (Order approving 
most recent amendments to Nasdaq UTP Plan, the 13th Amendment).
    \7\ See PCXE Rule 1.1(n).
    \8\ A ``Sponsored Participant'' means ``a person which has 
entered into a sponsorship arrangement with a Sponsoring ETP Holder 
pursuant to [PCXE] Rule 7.29.'' See PCXE Rule 1.1(tt).
    \9\ The broker-dealer commonly referred to as the Archipelago 
ECN is Archipelago Securities, a wholly owned subsidiary of 
Archipelago Holdings LLC and a member of the NASD. The ECN function 
will cease to operate as such once all the Nasdaq securities have 
been transferred to ArcaEx.
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1. Inside Limit Order
    An Inside Limit Order is a limit order that is to be executed in 
whole or in part on ArcaEx. If the order were not executed in its 
entirety, the remaining portion of the order would be routed pursuant 
to PCXE Rule 7.37(d) to the market participant \10\ with the best 
displayed price. Any unfilled portion of the order would not be routed 
to the next best price level until all quotes at the current best bid 
or offer are exhausted. If the Inside Limit Order were no longer 
marketable, it would be ranked in the Arca Book pursuant to PCXE Rule 
7.36.
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    \10\ See PCXE Rule 1.1(w) (definition of ``market 
participant'').
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2. Discretionary Orders
    Currently, a User can submit a Discretionary Order, which is an 
order to buy or sell a stated amount of a security at a specified, 
undisplayed price (the ``discretionary price''), as well as at a 
specified, displayed price. The undisplayed prices of a Discretionary 
Order are represented in the Working Order Process \11\ and can be 
matched with orders on the other side of the market under prescribed 
conditions. The Exchange proposes to adopt two new variations of the 
Discretionary Order called a ``Passive Discretionary Order'' and a 
``Discretion Limit Order.'' A summary of these proposed order types is 
discussed below.
    a. Passive Discretionary. The Exchange proposes to add PCXE Rule 
7.31(h)(2)(A) to define a Passive Discretionary Order. A Discretionary 
Order may be designated as a Passive Discretionary Order and such order 
would be routed pursuant to PCXE Rule 7.37(d) only if the displayed 
price is marketable against an away market participant. If the 
discretionary price of a Passive Discretionary Order were marketable, 
such order would only interact with trading interest in the ArcaEx Book 
pursuant to PCXE Rule 7.37(b)(2) and would not be routed away. Under 
the proposal, the Passive Discretionary order type will be available 
for exchange-listed and Nasdaq securities. For Passive Discretionary 
Orders in exchange-listed securities, if the discretionary price is 
marketable, such order will only interact with trading interest in the 
ArcaEx Book pursuant to PCXE Rule 7.37(b)(2) and will not be routed 
away. A Passive Discretionary Order for ITS Trade-Through Exempt 
Securities (as defined in PCXE Rule 7.37) will be permitted to trade at 
a price no more than three cents ($0.03) away from the NBBO displayed 
in the Consolidated Quote. For Passive Discretionary Orders in Nasdaq 
securities, if the discretionary price can be matched against orders in 
the ArcaEx Book, then such order will interact with trading interest in 
the ArcaEx Book pursuant to 7.37(b)(2). The NBBO or better execution 
guarantee set forth in PCXE Rule 7.37 will not apply to Passive 
Discretionary Orders in Nasdaq securities. Instead, Passive 
Discretionary Orders in Nasdaq securities would trade at no worse than 
the ArcaEx BBO. \12\
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    \11\ The Working Order Process is the third step in the ArcaEx 
execution algorithm. Working Orders are defined to include any order 
with a conditional or undisplayed price and/or size, including All-
or-None, Discretionary, and Reserve Orders. See PCXE Rule 7.37(b)(2) 
(description of ``Working Order Process'').
    \12\ See Amendment No. 2, supra note 4.
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    In the event that a Passive Discretionary Order routed from ArcaEx 
to another market participant is not executed in its entirety at the 
other market participant's quote, ArcaEx would attempt to execute the 
residual trading interest in the ArcaEx Book pursuant to PCXE Rule 
7.37. Finally,

[[Page 12136]]

Passive Discretionary Orders that are not marketable would be ranked in 
the ArcaEx Book pursuant to PCXE Rule 7.36.
    b. Discretion Limit. The Exchange also proposes to add PCXE Rule 
7.31(h)(2)(B) to define a Discretion Limit Order. A Discretionary Order 
may be designated as a Discretion Limit Order for Nasdaq securities 
only. If the discretionary price of a Discretion Limit Order could be 
matched against trading interest in the ArcaEx Book, then such order 
would be executed at the discretionary price or better against the 
displayed share size of available trading interest in the ArcaEx Book, 
regardless of size. If the discretionary price of a Discretion Limit 
Order could be matched against an away market participant, then such 
order would be routed pursuant to PCXE Rule 7.37(d) but only if the 
displayed share size of the Discretion Limit Order is equal to or less 
than the displayed share size of the away market participant. The NBBO 
or better execution guarantee set forth in PCXE Rule 7.37 would not 
apply to Discretion Limit Orders. Instead, Discretion Limit Orders, 
which will only be available for the trading of Nasdaq Securities, will 
not trade at a price inferior to the ArcaEx BBO. \13\
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    \13\ See Amendment No. 2, supra note 4.
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3. Reserve Orders
    Under current PCXE Rule 7.31(h)(3), a Reserve Order is a limit 
order with a portion of the size displayed and with a reserve portion 
of the size (``reserve size'') that is not displayed on the ArcaEx 
Book. With this filing, the Exchange proposes to adopt two new 
variations of the Reserve Order, a ``Sweep Reserve Order'' and a 
``Random Reserve Order.'' These proposed order types would be ranked 
and maintained in the Display Order Process \14\ and/or Working Order 
Process of the ArcaEx Book according to price-time priority and would 
be processed for internal matches in the same manner as standard 
Reserve Orders pursuant to PCXE Rule 7.37(b)(2). The proposed rule 
change regarding Sweep Reserve Orders should clarify how ArcaEx treats 
such orders when routing to other market participants is required. In 
the case of a Random Reserve Order, the proposed rule change would 
allow a User to define the original display quantity and a random 
reserve value in a share amount that would be used to determine the 
displayed quantity within a defined range each time it is replenished. 
These proposed order types are discussed separately below.
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    \14\ The Display Order Process is the second step in the ArcaEx 
execution algorithm. In this process, the ArcaEx system matches an 
incoming marketable order against orders in the Display Order 
Process at the display price of the resident order for the total 
size available at the that price or for the size of the incoming 
order. See PCXE Rule 7.37(b)(1) description of ``Display Order 
Process'').
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    a. Sweep Reserve Order. Under proposed PCXE Rule 7.31(h)(3)(A), a 
Reserve Order may be designated as a Sweep Reserve Order. Based upon a 
User's instruction, if the displayed price of a Sweep Reserve Order is 
marketable against an away market participant(s), then such order will 
be routed (i) serially as component orders, such that each component 
corresponds to the displayed size, or (ii) only once in its entirety, 
including both the displayed and reserve portions. The Exchange 
believes that this rule change codifies current order routing 
methodology, and believes that the proposed Sweep Reserve Order type is 
clearly implied in current PCXE Rule 7.37(d)(2)(A)(ii).
    b. Random Reserve Order. The Exchange proposes to add PCXE Rule 
7.31(h)(3)(B) to define a Random Reserve Order. Under the rule 
proposal, a User could determine a display and reserve quantity for a 
Reserve Order. In addition, a User could also define a random reserve 
delta (expressed in a share amount) to determine the number of shares 
to display when the quote is refreshed from reserve.\15\ Users are 
required to display at least 100 shares for all Reserve Orders 
including Random Reserve Orders. If the User does not specify the 
random reserve delta or the random reserve delta is set to zero, the 
ArcaEx system would assign the displayed size of the Reserve Order to 
vary to within 20% of the original specified displayed size. Should a 
User enter a Random Reserve Order with a display amount of 500 shares 
or less and a random reserve delta that is unspecified or set to zero, 
the order would be handled as a regular Reserve Order. The ArcaEx 
system would refresh the display quantity to the original displayed 
size, and would not vary the display quantity.
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    \15\ See Amendment No. 2, supra note 4.
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4. Pegged Orders
    The Exchange proposes to modify the ArcaEx trading system to accept 
Pegged Orders. A Pegged Order is a limit order to buy or sell a stated 
amount of a security at a display price set to track the current bid or 
ask of the NBBO in an amount specified by the User.\16\ The tracking of 
the relevant Consolidated Quote information for Pegged Orders would 
occur dynamically on a real-time basis. The associated price of each 
Pegged Order that is updated would be assigned a new entry time with 
priority in accordance with PCXE Rule 7.36(a). A Pegged Order may be 
designated as a Reserve Order or Discretionary Order and would be 
subject to the applicable order execution rules. The displayed price of 
a Pegged Order designated as a Discretionary Order would track the 
NBBO, and discretionary price of such order would re-price in 
correlation to any changes to the displayed price.\17\ Finally, Pegged 
Orders are only eligible during the Core Session.
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    \16\ See proposed PCXE Rule 7.31(cc) (definition of ``Pegged 
Order'').
    \17\ See Amendment No. 2, supra note 4.
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B. Changes to PCXE Rule 7.37

    The Exchange's current rules governing the order execution 
processes for orders in the ArcaEx Book are set forth in PCXE Rule 
7.37. Presently, PCXE Rule 7.37 provides, in part, that for an 
execution to occur in any Order Process, the price must be equal to or 
better than the NBBO. The requirements of this rule do not apply to 
orders designated as IOC, NOW and PNP in certain exchange-traded funds 
(``ETFs'') that are subject to the Commission's order granting a de 
minimis exemption from the trade-through restrictions of the 
Intermarket Trading System (``ITS'') Plan; provided, however, that any 
resulting executions will be at a price no more than three cents 
($0.03) away from the NBBO displayed in the Consolidated Quote.\18\ The 
Exchange proposes that the requirements of PCXE Rule 7.37 would not 
apply to existing order types (IOC, NOW and PNP orders) and proposed 
new order types (Passive Discretionary, Discretion Limit, IOC Cross and 
PNP Cross)\19\ in Nasdaq securities, provided however that such orders 
in Nasdaq securities would not result in an execution at a price less 
than the ArcaEx BBO.\20\
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    \18\ See Securities Exchange Act Release No. 46428 (August 28, 
2002), 67 FR 56607 (September 4, 2002) (Order Pursuant to Section 
11A of the Act and Rule 11Aa3-2(f) thereunder Granting a De Minimis 
Exemption for Transactions in Certain ETFs from the ITS Trade-
Through Provisions. See also Securities Exchange Act Release No. 
46684 (October 17, 2002), 67 FR 65618 (October 25, 2002) (SR-PCX-
2002-69).
    \19\ See Securities Exchange Act Release No. 47178 (January 13, 
2003), 68 FR 3076 (January 22, 2003) (Order approving File No. SR-
PCX-2002-74). The Commission recently approved a separate proposed 
rule change establishing IOC Cross and PNP Cross Orders.
    \20\ See Amendment No. 2, supra note 4.
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C. Working Order Process

    The Exchange proposes the following conforming changes to certain 
provisions of the Working Order Process set forth in PCXE Rule 
7.37(b)(2):
    Under the proposal PCXE Rule 7.37(b)(2) will be amended to clarify 
the

[[Page 12137]]

conditions in which a Passive Discretionary Order and Discretion Limit 
Order would be routed to an away market participant's quote. Passive 
Discretionary Orders would be routed away only if the displayed price 
is marketable against an away market participant. Discretion Limit 
Orders would be routed away only if the displayed share size of such 
order is equal to or less than the displayed share size of the away 
market participant.
    Several pricing scenarios have been added to the Working Order 
Process regarding incoming marketable orders that could be matched 
against a Passive Discretionary Order. First, for Nasdaq securities, if 
the ArcaEx BBO is outside the NBBO and a Passive Discretionary Order(s) 
within the Working Order Process has a discretionary price worse than 
the NBBO, then the incoming order would execute against such Passive 
Discretionary Order(s) at the price of the incoming order or the 
displayed price of the Discretionary Order(s), whichever is better. 
Second, for Nasdaq securities, if the ArcaEx BBO is outside the NBBO 
and a Passive Discretionary Order(s) within the Working Order Process 
has a discretionary price equal to or better than the NBBO, then the 
incoming order would execute against such Passive Discretionary 
Order(s) pursuant to current PCXE Rule 7.37(b)(2)(A)(ii). Finally, for 
ITS Trade-Through Exempt Securities (as defined in PCXE Rule 7.37), if 
the ArcaEx BBO is outside the NBBO and a Passive Discretionary Order(s) 
within the Working Order Process has a discretionary price worse than 
the NBBO by three cents ($0.03) or less, the incoming order would 
execute against such Passive Discretionary Order(s) at the price of the 
incoming order or the displayed price of the Discretionary Orders(s), 
whichever is better.

D. Technical Changes

    The Exchange has proposed to adopt several minor technical changes 
throughout PCXE Rules 1.1 and 7.18 to conform to the Nasdaq UTP Plan, 
which extends UTP to Nasdaq SmallCap securities. Accordingly, the 
Exchange is proposing to delete references to the term ``Nasdaq/NM 
Security'' and replacing it with ``Nasdaq Security.'' In addition, 
several definitions contained in PCXE Rule 1.1 are being amended to 
reflect the change in name of the Nasdaq UTP Plan. Finally, current 
PCXE Rule 1.1(jj), which defines the term ``OTC/UTP Primary Market,'' 
is being amended to reflect that the Listing Market, rather than the 
Primary Market, would have the authority to call a Regulatory Halt 
pursuant to PCXE Rule 7.18(c). A definition of ``OTC/UTP Listing 
Market'' is being adopted from the Nasdaq UTP Plan.\21\
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    \21\ See supra note 6.
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III. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning Amendment No. 2, including whether Amendment No. 2 
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 Amendment No. 2 of File No. SR-PCX-2002-75 
and should be submitted by April 3, 2003.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    After careful review, the Commission finds, for the reasons 
discussed below, that the proposal is consistent with the requirements 
of the Act and the rules and regulations thereunder applicable to the 
PCX.\22\ The Commission finds that the proposed rule change is 
consistent requirements of section 6(b)(5) of the Act \23\ and the 
objectives of section 11A(a)(2) of the Act.\24\ Section 6(b)(5) 
requires, among other things, that the rules of a national securities 
exchange be designed to facilitate transactions in securities and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. Section 11A(a)(2) of the Act 
authorizes the Commission to establish a national market system for 
securities, which should include the establishment of new data 
processing and communications techniques.\25\
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    \22\ In approving this rule, the Commission notes that it has 
considered the proposal's impact on efficiency, competition, and 
capital formation. See 15 U.S.C. 78c(f).
    \23\ 15 U.S.C. 78f(b)(5).
    \24\ 15 U.S.C. 78k-1(a)(2).
    \25\ 15 U.S.C. 78k-1(a)(2).
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    In proposing to establish new order types on ArcaEx, PCX seeks to 
provide market participants with more choices that will permit a more 
accurate representation of their trading interest on its electronic 
auction trading facility. In the Commission's view, the proposed order 
types could provide a new and advanced way for sophisticated trading 
interests and strategies to be represented and executed on ArcaEx. 
Further, the Commission believes that by amending the rules to include 
pricing and execution scenarios for the new order types in the Working 
Order Process the proposed rule change should assist Users in 
effectuating such trading interests and strategies. The Commission 
believes that the implementation of the new order types may enhance the 
ability of investors to represent their trading interest more 
completely than is currently possible on ArcaEx. In addition, the new 
order types may facilitate enhanced order interaction and foster price 
competition. The depth and liquidity of the market on ArcaEx could 
increase as a result of the enhanced interest and competition on 
ArcaEx. The Commission believes that, such order types could assist 
ArcaEx in attracting new market participants and to increase order flow 
to the PCXE, which in turn could promote greater competition among 
market centers.
    Pursuant to PCXE Rule 7.37 quotes and orders on the ArcaEx, except 
those in ITS Trade-Through Exempt Securities, must be executed at a 
price equal to or better than the NBBO, unless ArcaEx has routed the 
order to an away market at the NBBO. Under the proposal, executions in 
IOC, NOW, PNP, Passive Discretionary, Discretion Limit, IOC Cross, and 
PNP Cross orders for Nasdaq securities would also be included in the 
ArcaEx exception to the PCXE Rule 7.37 price protection provision. 
Specifically, executions in such orders in Nasdaq securities could be 
effected at a price no worse than the ArcaEx BBO. The Commission notes 
that currently there is no trade-through prohibition for Nasdaq 
securities because the Nasdaq UTP Plan does not provide for intermarket 
linkages between its participants like the listed securities 
market.\26\ The Commission believes that without the presence of an 
intermarket linkage for Nasdaq UTP Plan participants it would be 
impracticable for PCXE to attempt to provide intermarket price 
protection for the above-mentioned orders in Nasdaq securities. 
Nonetheless, the Commission emphasizes that this approval order does 
not diminish investor protections, and that such orders in Nasdaq

[[Page 12138]]

securities on ArcaEx are still subject to a broker's duty of best 
execution for its customer.
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    \26\ See supra note 6.
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    The Commission finds good cause for approving Amendment No. 2 to 
the proposed rule change prior to the thirtieth day after the date of 
publication of notice of filing thereof in the Federal Register. In 
Amendment No. 2, the Exchange made various clarifying and technical 
amendments to the proposed rule text to: (1) Reference the ``Joint 
Self-Regulatory Organization Plan Governing the Collection, 
Consolidation and Dissemination of Quotation and Transaction 
Information for Nasdaq-Listed Securities Traded on Exchanges'' in 
proposed PCXE Rule 1.1(aa), (2) clarify that the term ``OTC/UTP Listing 
Market'' shall have a meaning consistent with the Nasdaq Unlisted 
Trading Privileges Plan, (3) clarify the definition of ``Sweep Reserve 
Order'' by replacing the word ``price'' with the word ``size,'' (4) 
clarify the definition of ``Random Reserve Order'' by indicating that 
the random reserve value is expressed in share amounts and by 
correcting a grammatical error, (5) amend the definition of ``Pegged 
Order'' to reflect that the display price will track the relevant 
Consolidated Quote information for such orders on a real-time basis and 
that the displayed price of a Pegged Order designated as a 
Discretionary Order will track the NBBO, and that the discretionary 
price of such order would re-price in correlation to any change in the 
displayed price, and (6) clarify that IOC, NOW, PNP, Passive 
Discretionary, Discretion Limit, IOC Cross and PNP Cross orders in 
Nasdaq securities will received executions at a price no worse than the 
ArcaEx BBO. Because Amendment No. 2 is of a technical, clarifying, non-
substantive nature, and does not raise any novel regulatory issues or 
issues that were not considered by the Commission prior to its 
submission, the Commission finds good cause for accelerating approval 
of the proposed rule change, as amended by Amendment No. 2.

V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\27\ that the proposed rule change, (File No. SR-PCX-2002-75) as 
amended, be, and it hereby is approved.
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    \27\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\28\
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    \28\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-6072 Filed 3-12-03; 8:45 am]
BILLING CODE 8010-01-P