[Federal Register Volume 69, Number 102 (Wednesday, May 26, 2004)]
[Notices]
[Pages 30000-30001]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-11882]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49748; File No. SR-Phlx-2004-34]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule by the Philadelphia Stock Exchange, Inc. 
Relating to the Rescission of Commentary .01(f) to Exchange Rule 708

May 20, 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 May 11, 2004, the Philadelphia Stock Exchange, Inc. (``Phlx'' 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 Phlx. 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 Phlx proposes to rescind Commentary .01(f) to Exchange Rule 708 
(Acts Detrimental to the Interest or Welfare of the Exchange). The text 
of the proposed rule change is set forth below. Proposed new language 
is in italics, and proposed deletions are in [brackets].
* * * * *

Rule 708. Acts Detrimental to the Interest or Welfare of the Exchange

    A member, member organization, or person associated with or 
employed by a member or member organization shall not engage in acts 
detrimental to the interest or welfare of the Exchange.
    Commentary:
    .01 Acts which could be deemed detrimental to the interest or 
welfare of the Exchange include, but are not limited to, the following:
    (a) Conviction or guilty plea to any felony charge or any 
securities or fraud-related criminal misconduct;
    (b) Use or attempted use of unauthorized assistance while taking 
any securities industry or Exchange-related qualification examination;
    (c) Failure to make a good faith effort to pay any fees, dues, 
fines or other monies due and owing to the Exchange;
    (d) Destruction or misappropriation of Exchange or member property; 
or
    (e) Misconduct on the trading floor, in violation of the Exchange's 
Order and Decorum Regulations, that is repetitive, egregious or of a 
publicly embarrassing nature to the Exchange.
    [(f) Any action by a member of the Board of Governors or any 
Exchange Committee, or by any member organization associated with such 
member, which contravenes the Seat Transaction Policy contained in 
Article V of the Code of Conduct for Governors and Committee Members.]
* * * * *

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 Phlx 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 Phlx 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 the proposed rule change is to rescind Commentary 
.01(f) to Exchange Rule 708 because this comment has been made obsolete 
as a result of the demutualization of the Exchange.\3\
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    \3\ See Securities Exchange Act Release No. 49098 (January 16, 
2004), 69 FR 3974 (January 27, 2004) (SR-Phlx-2003-73).
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    Currently, Commentary .01(f) to Phlx Rule 708 provides that acts 
detrimental to the interest or welfare of the Exchange include, but are 
not limited to, any action by a member of the Board of Governors or any 
Exchange Committee, or by any member organization associated with such 
member, which contravenes the Seat Transaction Policy contained in 
Article V of the Code of Conduct for Governors and Committee Members. 
Ownership in the Exchange is no longer represented through seats but 
rather shares of stock in the Exchange. Therefore, due to the 
elimination of the concept of seat ownership, the Seat Transaction 
Policy in Commentary .01(f) to Rule 708 is obsolete.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \4\ in general, and furthers the

[[Page 30001]]

objectives of Section 6(b)(5) of the Act \5\ in particular, in that it 
removes an obsolete commentary from Phlx Rule 708.
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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 Phlx does not believe that the proposed rule change will result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended.

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 foregoing proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) of the Exchange Act \6\ and Rule 19b-4(f)(6) 
thereunder \7\ because the 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) does not become operative for 30 days from the date of filing, 
or such shorter time that the Commission may designate if consistent 
with the protection of investors and the public interest.\8\ 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 the 
furtherance of the purposes of the Act.\9\
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(6).
    \8\ As required under Rule 19b-4(f)(6)(iii), the Phlx provided 
the Commission with 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 
filing date.
    \9\ 15 U.S.C. 78s(b)(3)(C).
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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 proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:
    Electronic comments:
     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-Phlx-2004-34 on the subject line.
    Paper comments:
     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-Phlx-2004-34. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 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 also will be available for inspection and copying at the 
principal office of the Phlx. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-Phlx-2004-34 and should be submitted on or before June 
16, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-11882 Filed 5-25-04; 8:45 am]
BILLING CODE 8010-01-P