[Federal Register Volume 69, Number 164 (Wednesday, August 25, 2004)]
[Notices]
[Pages 52321-52323]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-1919]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50210; File No. SR-PCX-2004-79]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 by the 
Pacific Exchange, Inc. Relating to the Corporate Restructuring and 
Initial Public Offering of Archipelago Holdings, Inc.

August 18, 2004.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on August 10, 2004, the Pacific Exchange, Inc. (``PCX'' or 
``Exchange''), through its wholly owned subsidiary PCX Equities, Inc. 
(``PCXE''), filed with the Securities and Exchange Commission (``SEC'' 
or ``Commission'') the proposed rule change as described in Items I, 
II, and III, below, which Items have been prepared by the Exchange. On 
August 16, 2004, the PCX amended the proposed rule change.\3\ The PCX 
filed the proposal pursuant to Section 19(b)(3)(A) of the Act,\4\ and 
Rule 19b-4(f)(6) thereunder,\5\ which designates the proposed rule 
change as constituting a ``non-controversial'' rule change and that 
renders the proposal effective upon filing with the Commission.\6\ The 
Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Steven B. Matlin, Senior Counsel, Regulatory 
Policy, PCX, to Nancy J. Sanow, Assistant Director, Division of 
Market Regulation, Commission, dated August 13, 2004 (``Amendment 
No. 1''). Amendment No. 1 replaced the original rule filing in its 
entirety.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
    \6\ For purposes of determining the effective date and 
calculating the sixty-day period within which the Commission may 
summarily abrogate the proposed rule change under section 
19(b)(3)(C) of the Act, the Commission considers that period to 
commence on August 16, 2004, the date the PCX filed Amendment No. 1. 
See 15 U.S.C. 78s(b)(3)(C).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The PCX, through PCXE, proposes to amend PCXE Rule 14.3 in order to 
reflect the corporate name change that resulted from the corporate 
restructuring of Archipelago Holdings, L.L.C. into Archipelago 
Holdings, Inc. and the subsequent initial public offering of 
Archipelago Holdings, Inc.

[[Page 52322]]

 Proposed new language is in italics; proposed deletions are in 
[brackets].
* * * * *
Rules of PCX Equities, Inc.
Rule 14
* * * * *
Plan of Delegation of Functions by the Pacific Exchange, Inc. to PCX 
Equities, Inc.
* * * * *
Archipelago Exchange, L.L.C. and Archipelago Holdings, [L.L.C.] Inc.
    Rule 14.3(a)--No Change.
    (b)--Access to and Status of Officers and Directors of Archipelago 
Holdings, [L.L.C.] Inc. All officers and directors of Archipelago 
Holdings, [L.L.C.] Inc., shall be deemed to be officers and directors 
of PCX and PCX Equities for purposes of and subject to oversight 
pursuant to the Securities Exchange Act.
    (c)--No Change.
    (d)--Location of Books and Records. Archipelago Exchange, L.L.C., 
and Archipelago Holdings, [L.L.C.] Inc. must maintain all books and 
records related to the Archipelago Exchange within the United States.
    (e)--Confidentiality Requirements. The officers and directors of 
Archipelago Holdings, [L.L.C.] Inc. shall establish and maintain 
procedures and internal controls reasonably designed to adequately 
restrict the flow of confidential and proprietary information between 
PCX (including the facilities of PCX Equities) and the functions of 
WAVE that are not regulated as facilities of PCX Equities. In addition, 
PCX and PCX Equities shall establish and maintain procedures and 
internal controls reasonably designed to adequately restrict the flow 
of confidential and proprietary information between the Archipelago 
Exchange facility (including the functions of WAVE that are deemed a 
facility of PCX Equities) and the functions of WAVE as an introducing 
broker/residual electronic communications network.
    (f)--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 Exchange 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 Exchange is proposing to amend PCXE Rule 14.3 to make 
administrative changes necessary as a result of the corporate 
restructuring of Archipelago Holdings, L.L.C. into Archipelago 
Holdings, Inc. and the subsequent initial public offering of 
Archipelago Holdings, Inc. Archipelago Holdings, Inc. is the entity 
that will succeed Archipelago Holdings, L.L.C. as the sole parent of 
the current equities trading facility of PCX and PCXE, the Archipelago 
Exchange, L.L.C. Thus, the Exchange proposes to amend PCXE Rule 14.3 to 
replace the term ``Archipelago Holdings, L.L.C.'' with the term 
``Archipelago Holdings, Inc.''
 2. Statutory Basis
    The Exchange believes that this filing is consistent with section 
6(b) \7\ of the Act, in general, and furthers the objectives of section 
6(b)(1),\8\ in particular, in that it enables the Exchange to be so 
organized so as to have the capacity to be able to carry out the 
purposes of the Act and to comply, and (subject to any rule or order of 
the Commission pursuant to section 17(d) or 19(g)(2) of the Act) to 
enforce compliance by its exchange members and persons associated with 
its exchange members, with the provisions of the Act, the rules and 
regulations thereunder, and the rules of the Exchange. The Exchange 
also believes that this filing furthers the objectives of section 
6(b)(5),\9\ in particular, because the rule is designed to help prevent 
fraudulent and manipulative acts and practices; to promote just and 
equitable principals of trade; to foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities; and to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(1).
    \9\ 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

    No written comments were solicited or received.

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

    The foregoing rule change, as amended, has been filed by the 
Exchange pursuant to Section 19(b)(3)(A) of the Act \10\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\11\ The Exchange has 
designated the proposed rule change as one that: (i) Does not 
significantly affect the protection of investors or the public 
interest; (ii) does not impose any significant burden on competition; 
and (iii) does not become operative for 30 days from the date on which 
it was filed, or such shorter time as the Commission may designate. 
Therefore, the foregoing rule change, as amended, has become effective 
pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(6) 
thereunder.\13\ At any time within 60 days of the filing of the 
proposed rule change, the Commission may summarily abrogate the rule 
change if it appears to the Commission that the action is necessary or 
appropriate in the public interest, for the protection of investors, or 
would otherwise further the purposes of the Act.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
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    Pursuant to Rule 19b-4(f)(6)(iii) under the Act,\14\ the proposal 
may not become operative for 30 days after the date of its filing, or 
such shorter time as the Commission may designate if consistent with 
the protection of investors and the public interest, and the self-
regulatory organization must file notice of its intent to file the 
proposed rule change at least five business days beforehand. The 
Exchange provided the Commission with notice of its intent to file the 
proposed rule change at least five days before filing the amended 
proposal with the Commission.\15\ The Exchange has

[[Page 52323]]

requested that the Commission waive the 30-day operative delay so that 
the proposed rule change will become immediately effective upon filing.
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    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ The Commission deems the initial filing of SR-PCX-2004-79 
received by the Commission on August 10, 2004 to be the required 
pre-filing notice set forth in Rule 19b-4(f)(6)(iii) under the Act, 
17 CFR 240.19b-4(f)(6)(iii).
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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. 
The Commission believes that the proposed rule change, as amended, will 
allow the rules of the Exchange to accurately reflect the fact that 
Archipelago Holdings, Inc. has succeeded Archipelago Holdings, L.L.C. 
as the sole parent of the current equities trading facility of PCX and 
PCXE, the Archipelago Exchange, L.L.C. In addition, the proposed rule 
change will make no substantive changes to the Exchange's rule. For 
these reasons, the Commission designates the proposed rule change as 
effective and operative immediately.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, 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-PCX-2004-79 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-PCX-2004-79. 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 Section, 450 Fifth 
Street, NW., Washington, DC 20549. Copies of such filing also will be 
available for inspection and copying at the principal office of the 
PCX. 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-PCX-
2004-79 and should be submitted on or before September 15, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E4-1919 Filed 8-24-04; 8:45 am]
BILLING CODE 8010-01-P