[Federal Register Volume 68, Number 67 (Tuesday, April 8, 2003)]
[Notices]
[Pages 17146-17147]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-8445]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47610; File No. SR-PCX-2003-12]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. 
Regarding Firm Quotation Size

April 1, 2003.
    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 March 21, 2003, the Pacific Exchange, Inc. (``PCX'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'' or 
``SEC'') the proposed rule change as described in items I, II and III 
below, which items have been prepared by the self-regulatory 
organization. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The PCX proposes to amend its rules governing firm quotations in 
order to provide that all PCX quotations will be firm for all incoming 
customer and broker-dealer orders for their full disseminated size 
pursuant to PCX rule 6.86(b)(2). The text of the proposed rule change 
is available at the Office of the Secretary, PCX and 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 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 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.

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

1. Purpose
    The purpose of this proposed rule change is to provide that all PCX 
quotations will be firm for all incoming customer and broker-dealer 
orders for their full disseminated size pursuant to PCX rule 
6.86(b)(2). This will allow the Exchange to provide customers and 
broker-dealers an opportunity to receive executions up to the full 
disseminated size beyond the one contract minimum that the Exchange's 
current rule provides for broker-dealer orders. As proposed, absent 
unusual market conditions as set forth in PCX rule 6.86(d), each 
Responsible Broker or Dealer \3\ is obligated to be firm for all 
incoming orders in a listed option series in an amount up to the full 
disseminated size.
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    \3\ The term ``Responsible Broker or Dealer'' means that, with 
respect to any bid or offer for any listed option made available by 
the Exchange to quotation vendors, the Lead Market Maker and any 
registered Market Makers constituting the trading crowd in such 
option series will collectively be the ``Responsible Broker or 
Dealer'' to the extent of the aggregrate quotation size specified. 
See PCX Rule 6.86(a)(2).
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2. Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) \4\ of the Act, in general, and further the 
objectives of section 6(b)(5),\5\ in particular, because it is designed 
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 and perfect the 
mechanisms of a free and open market and to protect investors and the 
public interest.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 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 foregoing rule change has been filed by the Exchange as a 
``non-controversial'' rule change pursuant to section 19(b)(3)(A)(i) of 
the Act \6\ and subparagraph (f)(6) of rule 19b-4 thereunder.\7\ 
Consequently, because the foregoing rule change: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) does not become operative for thirty days from the date on 
which it was filed or such shorter time as the Commission may designate 
if consistent with the protection of investors and the public interest, 
and 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, it has become effective pursuant to section 19(b)(3)(A) of 
the Act and rule 19b-4 thereunder.
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    \6\ 15 U.S.C. 78s(b)(3)(A)(i).
    \7\ 15 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under rule 19b-4(f)(6) \8\ normally 
does not become operative prior to thirty days after the date of 
filing. However, pursuant to rule 19b-4(f)(6)(iii), the Commission may 
designate a shorter

[[Page 17147]]

time if such action is consistent with the protection of investors and 
the public interest. The PCX has requested that the Commission waive 
the five-day pre-filing requirement and the 30-day operative delay.
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    \8\ 17 CFR 240.19b-4(f)(6).
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    The Commission believes that waiving the five-day pre-filing 
provision and the 30-day operative delay is consistent with the 
protection of investors and the public interest.\9\ Waiving the pre-
filing requirement and accelerating the operative date will provide 
investors increased liquidity. Further, the Commission notes that on 
January 21, 2003 it approved a similar proposed rule change submitted 
by the International Securities Exchange, Inc. (``ISE''), which 
requires ISE quotations to be firm for published sizes for all orders 
entered by ISE members regardless of whether the orders are for the 
accounts of customers or broker-dealers.\10\ For these reasons, the 
Commission designates that the proposed rule change has become 
effective and operative immediately.
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    \9\ For purposes of accelerating the operative date of this 
proposal only, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
    \10\ See Securities Exchange Act Release No. 47220, 68 FR 4260 
(January 28, 2003) (ISE-2002-24).
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    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 Exchange Act.

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. SR-PCX-2003-12 and should 
be submitted by April 29, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-8445 Filed 4-7-03; 8:45 am]
BILLING CODE 8010-01-P