[Federal Register Volume 68, Number 189 (Tuesday, September 30, 2003)]
[Notices]
[Pages 56367-56369]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-24753]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48533; File No. SR-PCX-2003-4]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. 
Relating to the Posting Period for Membership Applications

September 24, 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 August 26, 2003, the Pacific Exchange, Inc. (``PCX'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. 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 Pacific Exchange, Inc. (``PCX'' or ``Exchange'') is proposing 
to amend its rules to modify the period during which

[[Page 56368]]

the name of an applicant for membership must be published to other 
Exchange members. The text of the proposed rule change is available at 
the Office of the Secretary, 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, 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 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
    The PCX reviewed its membership posting requirements relative to 
those of other option exchanges. In doing so, the PCX concluded that 
the current membership posting requirements were enacted at a time when 
electronic communication was not as fast or as prevalent as it is 
today. As a result, the Exchange's current rule requiring a new 
applicant for membership be posted for ten (10) calendar days is 
antiquated and unduly burdensome on the potential applicant. Therefore, 
the Exchange is proposing to amend its Rule 1.6(b) and Rule 6.44(a). 
The proposed rule will require that following receipt of a membership 
application, the Exchange shall post the applicant's name for a period 
of three (3) business days. The PCX Membership Committee may shorten or 
waive the posting period for an applicant if it determines that 
extenuating circumstances warrant such action. Applicants seeking to 
shorten or waive the posting period are required to submit a written 
statement that sufficiently describes the basis for their request. In 
reviewing a request to shorten or waive the three (3) business day 
posting period, the Membership Committee will consider factors such as 
the applicant's capitalization, options industry experience, 
disciplinary history, affiliations with other self regulatory 
organizations and any other factors deemed relevant by the Committee. 
An applicant whose request to shorten or waive the three (3) business 
day posting period is denied will not be given the opportunity to 
appeal such decision.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\3\ in general, and furthers the 
objectives of section 6(b)(5),\4\ 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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    \3\ 15 U.S.C. 78f(b).
    \4\ 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 were neither solicited nor received.

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

    The proposed 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 \5\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\6\ 
Consequently, because the foregoing proposed 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) by its terms does not become operative for 30 days after the 
date of this filing, or such shorter time as the Commission may 
designate, if consistent with the protection of investors and the 
public interest, provided that the self-regulatory organization has 
given the Commission written notice of its intent to file the proposed 
rule change, along with a brief description and text of the proposed 
rule change, at least five business days prior to the date of filing of 
the proposed rule change, or such shorter time as the Commission may 
designate, it has become effective pursuant to section 19(b)(3)(A) of 
the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\
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    \5\ 15 U.S.C. 78s(b)(3)(A)(i).
    \6\ 17 CFR 240.19b-4(f)(6).
    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
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    Pursuant to Rule 19b-4(f)(6)(iii),\9\ a proposed ``non-
controversial'' rule change does not become operative for 30 days after 
the date of filing, or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest. The PCX has requested that the Commission waive the 30-day 
operative delay so that the proposed rule change will become 
immediately effective upon filing.\10\
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    \9\ 17 CFR 240.19b-4(f)(6)(iii).
    \10\ In its original filing, PCX inadvertently also had 
requested that the Commission waive the five day pre-filing period. 
PCX had, in fact, already provided the Commission with the 
appropriate five day notice. Telephone conference among Steven B. 
Matlin, Peter D. Bloom, Regulatory Policy, PCX, and Geoffrey Pemble, 
Special Counsel, Division, Commission (September 16, 2003).
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public 
interest.\11\ Accelerating the operative date will allow for a more 
efficient and effective market operation by enabling Exchange access to 
new members in a more timely manner. For this reason, the Commission 
designates the proposed rule change to be effective and operative 
immediately.
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    \11\ For purposes of accelerating the operative date of this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition and capital formation. 15 U.S.C. 78c(f).
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    At any time within 60 days of the filing of the 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.

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

[[Page 56369]]

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 at the Commission's Public Reference Room. Copies of such 
filing will also be available for inspection and copying at the 
principal office of the Exchange. All submissions should refer to the 
File No. SR-PCX-2003-44 and should be submitted by October 21, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-24753 Filed 9-29-03; 8:45 am]
BILLING CODE 8010-01-P