[Federal Register Volume 69, Number 56 (Tuesday, March 23, 2004)]
[Notices]
[Pages 13610-13611]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-6452]



[[Page 13610]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49417; File No. SR-PCX-2004-07]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. To 
Amend PCX Rule 1.26 To Clarify and Update Its Registration Rule for 
Employees of Member Organizations

    March 15, 2004.
    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 February 9, 2004, the Pacific Exchange, Inc. (``PCX'' or 
``Exchange''), through its subsidiary PCX Equities, Inc. (``PCXE''), 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in items I and II below, which items 
have been prepared by the Exchange. The Exchange filed the proposal 
pursuant to section 19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(6)\4\ 
thereunder, which renders the proposal effective upon filing with the 
Commission.\5\ 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ The PCX provided the Commission with written notice of its 
intention to file the proposed rule change on January 30, 2004. See 
17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    PCX proposes to amend PCX Rule 1.26 in order to clarify PCX's 
registration rule for employees of Member Organizations. The text of 
the proposed rule is below. Proposed new language is in italics; 
proposed deletions are in brackets.

Rule 1: Memberships; Employees of Member Organizations

Registration
    Rule 1.26(a). [Every] Each employee [, including branch office 
managers,] of a M[m]ember O[o]rganization [who is] compensated directly 
or indirectly for the solicitation or handling of business in 
securities, including trading in securities for the account of the 
M[m]ember O[o]rganization, [whether such securities are those dealt in 
on the Exchange or those dealt in over-the-counter,] must be registered 
with [and approved by] the Exchange.
    [The Exchange may waive compliance with the requirements of Rule 
1.26(a) in the event a member organization is also a member 
organization of another national securities exchange having comparable 
requirements.]
    (b) In order to satisfy the [R]registration requirement, [of 
registered] employees [shall] of Member Organizations must satisfy 
applicable examination requirements as prescribed by the Exchange, 
complete documentation and pay the related fees. [be in such form as 
the Exchange shall prescribe and the c]Continuance of any registered 
employee [in that capacity shall] is at [all times be in] the sole 
discretion of the Exchange.
    (i) For employees of Member Organizations for which the Exchange 
serves as the Designated Examining Authority, all the requirements of 
subsection (b) apply;
    (ii) For employees of Member Organizations for which the Exchange 
does not serve as the Designated Examining Authority, such employees 
shall be deemed registered with the PCX if the Member Organization has 
recorded the registration of such employees with the PCX via Web CRD.
    (c) The Exchange may require each applicant for employment as a 
registered employee to [pass such] successfully complete examinations 
as the Exchange may prescribe to establish the applicant's 
qualification for such registration. The Exchange may exempt an 
individual from the examination requirements if such individual has 
successfully completed comparable examinations (e.g., Series 7 
Examination).

Rule 1.26(d)-(g)--No change.

* * * * *

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 its proposal and discussed any 
comments it received regarding the proposal. The text of these 
statements may be examined at the places specified 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 Exchange is proposing to amend PCX Rule 1.26 in order to 
clarify and update its registration rule for employees of Member 
Organizations.
    The Exchange proposes to amend PCX Rule 1.26(a) so that the 
registration requirement applies to employees of Member Organizations 
irrespective of whether the Member Organization is a member of another 
national securities exchange. This amendment is necessary for the PCX 
to maintain a complete and accurate listing of PCX Member Organizations 
and their employees. The Exchange also proposes to clarify PCX Rule 
1.26(b) to clearly outline that employees of Member Organizations must 
satisfy the applicable examination requirements as prescribed by the 
Exchange, complete any documentation, and pay the related fees. The 
Exchange also proposes to clarify the difference in the process 
depending on whether the PCX serves as the Member Organization's 
Designated Examining Authority. This is intended to prevent any 
ambiguity regarding the registration process. Lastly, the Exchange 
proposes to include in PCX Rule 1.26(c) an exemption for an individual 
from the examination requirements if such individual has successfully 
completed comparable examinations. The purpose of this provision is to 
avoid duplicative examinations.
    The requirements for registration of employees of Member 
Organizations outlined above are existing requirements that are 
currently in place at the Exchange pursuant to PCX Rule 1.26. The 
Exchange currently mandates these requirements for registration and 
merely seeks to codify them in the Exchange rules.
2. Statutory Basis
    The Exchange believes 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),\7\ in particular, because it is designed 
to promote just and equitable principals 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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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The PCX 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.

[[Page 13611]]

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

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) Impose any significant burden on competition; and
    (iii) Become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to section 19(b)(3)(A) of the Act \8\ and 
Rule 19b-4(f)(6) thereunder.\9\ 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.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
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    The Exchange asked the Commission to waive the 30-day operative 
delay. The Commission believes such waiver is consistent with the 
protection of investors and the public interest. Because these proposed 
rules merely codify existing procedures, the proposed rule change does 
not raise any new regulatory issues, significantly affect the 
protection of investors or the public interest, or impose any 
significant burden on competition. For these reasons, the Commission 
designates the proposal to be effective and operative upon filing with 
the Commission.\10\
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    \10\ For purposes only 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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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal 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. Comments 
may also be submitted electronically at the following e-mail address: 
[email protected]. All comment letters should refer to File No. SR-
PCX-2004-07. This file number should be included on the subject line if 
e-mail is used. To help the Commission process and review comments more 
efficiently, comments should be sent in hardcopy or by e-mail but not 
by both methods. 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 
number SR-PCX-2004-07 and should be submitted by April 13, 2004.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-6452 Filed 3-22-04; 8:45 am]
BILLING CODE 8010-01-P