[Federal Register Volume 70, Number 28 (Friday, February 11, 2005)]
[Notices]
[Pages 7316-7318]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-582]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51145; File No. SR-PCX-2005-02]


Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
Market Maker Cleanup Order Administrative Change

February 7, 2005.
    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 January 21, 2005, the Pacific Exchange, Inc.

[[Page 7317]]

(``PCX'' 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 PCX. 
The Exchange filed this proposal pursuant to Section 19(b)(3)(A) of the 
Act,\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The PCX, through its wholly-owned subsidiary PCX Equities, Inc. 
(``PCXE'' or ``Corporation''), proposes to amend its rules governing 
the Archipelago Exchange (``ArcaEx''), the equities trading facility of 
PCXE. With this filing, PCX proposes to delete PCXE Rule 7.23(a)(6) in 
order to conform to a previous rule change. The text of the proposed 
rule change is available on the PCX's Web site (www.pacificex.com), at 
the PCX's Office of the Secretary, and at the Commission's Public 
Reference Room.

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 PCX 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 PCX 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
    On October 23, 2003, the Exchange filed a rule proposal with the 
Commission to amend its rules governing Market Maker obligations on 
ArcaEx.\5\ Specifically, the Exchange proposed to modify PCXE Rule 
7.25(b) to eliminate the stipulation that Market Makers must become Odd 
Lot Dealers in the securities in which they are registered. In 
addition, the Exchange proposed to modify PCXE Rule 7.34(b) to 
eliminate the requirement that Market Makers must maintain one Cleanup 
Order for all of the securities in which they are registered. The 
amendment was intended to facilitate additional Market Maker 
participation on ArcaEx and to further enhance order interaction, 
provide greater depth in liquidity, and foster price competition. The 
Commission approved the proposed rule change on February 3, 2004.\6\
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    \5\ See SR-PCX-2003-59.
    \6\ See Securities Exchange Act Release No. 49176 (February 3, 
2004), 69 FR 6356 (February 10, 2004) (Order approving SR-PCX-2003-
59).
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    At this time, the Exchange proposes to delete PCXE Rule 7.23(a)(6) 
to conform to the previous rule change, which the Exchange 
inadvertently failed to delete as part of the filing in October 
2003.\7\ PCXE Rule 7.23(a) details the obligations of Market Makers and 
subsection (6) requires Market Makers to maintain one Cleanup order in 
each security in which the Market Maker is registered as such for each 
Market Order Auction. The Exchange proposes to delete this provision as 
obsolete given the aforementioned rule change that was approved by the 
Commission.
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    \7\ See supra note 5.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\8\ in general, and furthers the 
objectives of section 6(b)(5),\9\ in particular, because it 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 and perfect the 
mechanisms of a free and open market and to protect investors and the 
public interest.
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    \8\ 15 U.S.C. 78f(b).
    \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

    Written comments on the proposed rule change were neither solicited 
nor received.

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

    Because the foregoing rule change does not: (1) Significantly 
affect the protection of investors or the public interest; (2) impose 
any significant burden on competition; and (3) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act\10\ and Rule 19b-4(f)(6) 
thereunder.\11\ At any time within 60 days of the filing of such 
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 furtherance of 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).
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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-PCX-2005-02 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-2005-02. This file 
number should beincluded 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

[[Page 7318]]

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 Exchange. 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-2005-02 and should be submitted on or before March 
4, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
Margaret H. McFarland,
Deputy Secretary.
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    \12\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E5-582 Filed 2-10-05; 8:45 am]
BILLING CODE 8010-01-P