[Federal Register Volume 69, Number 245 (Wednesday, December 22, 2004)]
[Notices]
[Pages 76816-76817]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27938]



[[Page 76816]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50851; File No. SR-Phlx-2004-51]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change and Amendment No. 1 Thereto by the Philadelphia Stock Exchange, 
Inc. Relating to Phlx Regulation 5, Visitors and Applicants

December 14, 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 October 7, 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 and 
II below, which Items have been prepared by Phlx. On December 6, 2004, 
Phlx filed Amendment No. 1 to the proposed rule change.\3\ 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\ Amendment No. 1 replaced the original filing in its 
entirety. Amendment No. 1 clarified that violations of Regulation 5 
would be enforced against members and not the guests themselves, and 
added a description for the Applicant Access Card.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The exchange proposes to amend Phlx Regulation 5, Visitors and 
Applicants. The text of the proposed rule change is set forth below. 
Additions are italicized. Deletions are bracketed.
* * * * *
Regulation 5--[Visitors and Applicants] Guests

    Non-member [visitors] guests will be permitted on the trading floor 
at the discretion of the respective floor committee (Options, FCO or 
Floor Procedures). All [visitors] guests must be signed in by a member 
or Exchange official and accompanied at all times by a member, 
associated person of a member or an Exchange official.
    [As a visitor, the applicant must be escorted by a representative 
of a member firm at all times while on the trading floor, and failure 
to do so shall result in a violation of this regulation by such member 
Firm.
    Once an applicant has filed an application with the Office of the 
Secretary pursuant to By-Law Article XII, Section 12-4, the 
Examinations Department and the Office of the Secretary shall conduct 
clearance procedures to verify personal data and financial viability. 
The applicant may be admitted as a visitor for ten business days, after 
which the applicant must submit an Applicant Access Card/Floor Badge 
application which is subject to approval by the Exchange pursuant to 
satisfactory completion of personal and financial data verification. 
Twenty-one days after the Access Card is issued, it will automatically 
expire; an applicant may apply to the Chairman of the Admissions 
Committee or his designee for a twenty-one day extension.]

1st Occurrence Official Warning
2st Occurrence $50.00
3st Occurrence $100.00
4st Occurrence $200.00
5st and Thereafter Sanction is discretionary with Business Conduct 
Committee
* * * * *

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. Phlx has prepared summaries, set forth in sections A, B, 
and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organizations'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 update Phlx 
Regulation 5, Visitors and Applicants, encated as a rule of order and 
decorum under Phlx Rule 60. Phlx Regulation 5 orginally applied 
generally to non-member guests' access to the trading floor.\4\ It was 
amended by the Exchange in 1992 to create an ``applicant'' status for 
prospective Exchange members from whom an application for membership 
had been filed and for whom the personal background check had been 
completed, but whose membership application process would not be 
completed until a subsequent posting period had been completed.\5\ That 
rule filing (File No. SR-Phlx-91-06) stated that, while clearance 
procedures are being conducted, which normally take about ten business 
days to complete, the prospective member would remain in a ``visitor'' 
status, requiring the signature of a member for entry on the floor and 
constant accompaniment by a member while on the floor. Once the 
clearance procedures were completed, the applicant would submit an 
``Applicant Access Card/Floor Badge Application,'' and upon issuance of 
the Applicant Access Card \6\ and Floor Badge, the applicant would have 
unescorted access to the floor and not have to be signed in by a 
member. According to the Exchange, Phlx Membership Services no longer 
uses an Applicant Access Card/Floor Badge Application and no longer 
issues Applicant Access Cards. Instead, applicants for membership who 
desire access to the trading floor are required to register as on-floor 
trading personnel pursuant to Phlx Rule 620(b), Trading Floor 
Registration. Once registered under Phlx Rule 620(b), applicants are 
issued the same access card issued to members, members' staff and 
Exchange staff to permit access to the Exchange floor.
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    \4\ Vilations of Regulation 5 are enforced against members, 
member organizations, and/or associated persons who permit their 
guest to have access to the Exchange floor without properly signing 
them in, accompanying them, and otherwise ensuring their compliance 
with the rule.
    \5\ See Securities Exchange Act Release No. 30416 (February 26, 
1992), 57 FR 7836 (March 4, 1992) (approving File No. SR-Phlx-91-
06).
    \6\ The Applicant Access Card, an electronic proximity card, was 
an access card designed to permit access to the Exchange floor for a 
period of 21 days. After that period expried, the applicant's use of 
the Applicant Access Card would generate an alert to Exchange 
personnel who would then obtain the return of the Applicant Access 
Card from the applicant.
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    Therefore, Phlx proposes to return Regulation 5 to its pre-1992 
wording. As such, Phlx Regulation 5 would continue to apply to gests 
who do not qualify for registration as on-floor trading personnel under 
Phlx Rule 620(b).
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\7\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\8\ in particular, in that it would eliminate 
outdated language which no longer reflects current procedures at the 
Exchange regarding access to the trading floor by applicants for 
membership.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 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 would 
impose any inappropriate burden on competition.

[[Page 76817]]

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    No written comments were either solicited or received.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which Phlx consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be disapproved.\9\
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    \9\ 15 U.S.C. 78s(b)(2).
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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, 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-Phlx-2004-51 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-2004-51. 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 this filing also will be 
available for inspection and copying at the principal office of the 
Phlx. All comments received will be posed 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-2004-51 and should be submitted on or before January 17, 2005.

    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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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 04-27938 Filed 12-21-04; 8:45 am]
BILLING CODE 8010-01-M