[Federal Register Volume 69, Number 173 (Wednesday, September 8, 2004)]
[Notices]
[Page 54337]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2091]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50296; File No. SR-PCX-2004-49]


Self-Regulatory Organizations; Pacific Exchange, Inc; Order 
Approving a Proposed Rule Change To Amend Rules Governing the 
Archipelago Exchange by Adding a New Order Modifier Entitled ``Don't 
Arb Me''

August 31, 2004.
    On June 3, 2004, the Pacific Exchange, Inc. (``PCX'' or 
``Exchange''), through its wholly owned subsidiary, PCX Equities, Inc. 
(``PCXE''), 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 amend its rules governing the Archipelago 
Exchange (``ArcaEx''), the equities trading facility of PCXE, to add a 
new order type entitled the ``Don't Arb Me'' modifier. The proposed 
rule change was published for comment in the Federal Register on July 
28, 2004.\3\ The Commission received no comment letters on the 
proposal. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 50054 (July 21, 
2004), 69 FR 45104.
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\4\ In 
particular, the Commission believes that the proposed rule change is 
consistent with section 6(b)(5) of the Act,\5\ which requires, among 
other things, that the rules of the Exchange be designed to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, and, in general, to protect investors and the public 
interest. In addition, the Commission believes that the proposed rule 
change is consistent with provisions of section 11A(a)(1)(C)(i) of the 
Act,\6\ which states that it is in the public interest and appropriate 
for the protection of investors and the maintenance of fair and orderly 
markets to assure economically efficient execution of securities 
transactions.
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    \4\ In approving this proposed rule change, the Commission has 
considered its impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 15 U.S.C. 78k-1(a)(1)(C)(i).
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    Specifically, the Commission believes that the proposal should 
promote increased efficiency and effectiveness in the Exchange's market 
operation and enhanced investment choices available to investors over a 
broad range of trading scenarios. The Commission also believes that 
allowing the Exchange to implement the ``Don't Arb Me'' modifier should 
facilitate enhanced order interaction and foster price competition. In 
addition, the Commission notes that the ``Don't Arb Me'' modifier was 
developed in response to Exchange participants' requests for the 
additional functionality.
    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\7\ that the proposed rule change, as amended, (SR-PCX-2004-49) is 
approved.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E4-2091 Filed 9-7-04; 8:45 am]
BILLING CODE 8010-01-P