[Federal Register Volume 70, Number 53 (Monday, March 21, 2005)]
[Notices]
[Pages 13563-13564]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-1203]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51369; File No. SR-PCX-2005-14]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment Nos. 1 and 2 
Thereto by the Pacific Exchange, Inc. Relating to Arbitration Fees

March 15, 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 February 1, 2005, the Pacific Exchange, Inc. (``PCX'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') the proposed rule change as described in 
items I, II and III below, which items have been prepared by the 
Exchange. On February 23, 2005, the Exchange filed Amendment No. 1 to 
the proposed rule change. On March 8, 2005, the Exchange filed 
Amendment No. 2 to the proposed rule change. The PCX has designated 
this proposal as one establishing or changing a due, fee, or other 
charge imposed by the PCX under section 19(b)(3)(A)(ii) of the Act,\3\ 
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)(ii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The PCX is proposing to amend the PCX Options and PCX Equities, 
Inc. (``PCXE'') arbitration rules to include an arbitration hearing 
venue surcharge applicable to OTP Holders, OTP Firms \4\ and ETP 
Holders \5\ (``Holders''). The text of the proposed rule change is 
available on the PCX Web site (http://www.pacificex.com/legal/docs/prf/2005/SR-PCX-2005-14-amend2.pdf), at the principal office of the PCX, 
and in the Commission's Public Reference Room.
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    \4\ See PCX Rule 1(q)-(r).
    \5\ See PCXE Rule 1(n).
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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

[[Page 13564]]

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

Purpose
    The Exchange proposes to adopt new PCX Rule 12.31(l) and PCXE Rule 
12.32(l) to include an arbitration hearing venue surcharge applicable 
to Holders. Under the proposed rules, the Director of Arbitration 
(``Director'') will make arrangements with an off-site venue for each 
arbitration hearing and the costs for such arrangement will be directly 
passed to the Holder(s) that are parties to the dispute (``Arbitrating 
Holders''). The Arbitrating Holder(s) will be liable for the entire 
amount of the arrangement for the arbitration hearing venue. For each 
associated person who is named, the surcharge shall be assessed against 
the Holder which employed the associated person at the time of the 
events which gave rise to the dispute, claim or controversy. In the 
event that multiple Arbitrating Holders or associated persons are 
parties to a dispute, the arbitrator(s) shall determine which 
Arbitrating Holders will be liable for the surcharge unless the 
surcharge is waived by the Director.
    Currently, arbitration hearings at the PCX are held in conference 
rooms within the PCX corporate headquarters. These conference rooms are 
shared by various PCX departments and are located on the same floors as 
the departments, which include the Membership, Regulation, General 
Counsel, and Enforcement departments. Due to the sharing of space and 
close quarters in which the arbitration hearings are held, the parties 
to the dispute often do not have alternate locations to discuss matters 
with their counsel and/or discuss possible settlements or resolutions. 
Furthermore, the level of confidentiality and integrity of the Exchange 
may be in jeopardy with various unattended parties in the hallways of 
the PCX corporate headquarters. Therefore, the Exchange believes an 
off-site hearing venue, which would provide an appropriate and 
confidential environment for the arbitration parties, would be in the 
best interest of the arbitration parties as well as the Exchange.
Basis
    The Exchange believes that the proposal is consistent with section 
6(b) \6\ of the Act, in general, and section 6(b)(4) \7\ of the Act, in 
particular, in that it provides for the equitable allocation of 
reasonable dues, fees and other charges among the Exchange's Holders.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
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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

    The foregoing rule change has become effective pursuant to section 
19(b)(3)(A)(ii) \8\ of the Act and subparagraph (f) of Rule 19b-4 
thereunder,\9\ because the proposed rule change establishes a charge 
applicable only to members of the Exchange. 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 
purpose of the Act.\10\
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f).
    \10\ For purposes of calculating the 60-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 March 8, 2005, the date on which the Exchange filed 
Amendment No. 2 to the proposed rule change. See 15 U.S.C. 
78s(b)(3)(C).
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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 No. SR-PCX-2005-14 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 No. SR-PCX-2005-14. 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 Room, 450 Fifth Street, 
NW., Washington, DC 20549-0609. Copies of such filing will also 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 No. SR-PCX-
2005-14 and should be submitted on or before April 11, 2005.

    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. E5-1203 Filed 3-18-05; 8:45 am]
BILLING CODE 8010-01-P