[Federal Register Volume 69, Number 155 (Thursday, August 12, 2004)]
[Notices]
[Pages 49929-49930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-18417]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50143; File No. SR-PCX-2004-47]


Self-Regulatory Organizations; Order Granting Approval to a 
Proposed Rule Change and Amendment No. 1 Thereto by the Pacific 
Exchange, Inc. To Eliminate the Ability of Floor Brokers and Market 
Makers To Manually Trade With Orders and Quotes With Size in the 
Consolidated Book

August 4, 2004.
    On June 10, 2004, the Pacific Exchange, Inc. (``PCX'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to eliminate PCX Rule 6.76(d)(2), which allows a 
Market Maker or Floor Broker to manually trade with orders and Quotes 
with Size \3\ in the Consolidated Book \4\ by vocalizing a bid or offer 
in a particular series and effecting a trade with the Order Book 
Official (``OBO''). On June 22, 2004, the Exchange filed Amendment No. 
1 to the proposed rule change.\5\ The proposed rule change and 
Amendment No. 1 were published for comment in the Federal Register on 
July 1, 2004.\6\ The Commission received no comments on the proposal, 
as amended. This order approves the proposed rule change, as amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See PCX Rule 6.1(b)(33).
    \4\ See PCX Rule 6.1(b)(37).
    \5\ See letter from Steven B. Matlin, Senior Attorney, PCX, to 
Nancy J. Sanow, Assistant Director, Division of Market Regulation, 
Commission, dated June 21, 2004 (``Amendment No 1''). In Amendment 
No. 1, the Exchange clarified the language describing the PCX Plus 
platform.
    \6\ See Securities Exchange Act Release No. 49912 (June 24, 
2004), 69 FR 39995.
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    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange \7\ 
and, in particular, the requirements of section 6(b)(5) of the Act \8\ 
and the rules and regulations thereunder. Specifically, the Commission 
finds that the proposed rule change, as amended, 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 to and perfect the mechanism of a 
free and open market and a national market system.
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    \7\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(5).
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    With this proposal, Market Makers and Floor Brokers will be able to 
interact with the Consolidated Book by electronic means only. The 
Exchange represented that manually effecting a trade with an OBO is not 
as efficient as effecting a trade electronically using the PCX Plus 
technology. Accordingly, the Commission believes that the proposal, 
which has the effect of requiring that all trades with orders and 
Quotes with Size in the Consolidated Book be executed electronically, 
should enhance the

[[Page 49930]]

efficiency of trading with orders and Quotes with Size in the 
Consolidated Book. The Commission notes that this proposal does not 
change the manner in which Floor Brokers and Market Makers effect 
transactions with options that do not trade on PCX Plus.\9\
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    \9\ Phone conversation between Kelly Riley, Assistant Director, 
Division of Market Regulation, Commission, and Steve B. Matlin, 
Senior Attorney, Regulatory Policy, PCX, August 3, 2004.
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    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\10\ that the proposed rule change (File No. SR-PCX-2004-47), as 
amended, is approved.
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    \10\ 15 U.S.C. 78s(b)(2).

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. 04-18417 Filed 8-11-04; 8:45 am]
BILLING CODE 8010-01-P