[Federal Register Volume 70, Number 87 (Friday, May 6, 2005)]
[Notices]
[Pages 24154-24155]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-2199]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51637; File No. SR-PCX-2004-65]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change and Amendment Nos. 1 and 2 Thereto by the Pacific Exchange, Inc. 
Relating to the Deletion of Obsolete or Unnecessary Rules

April 29, 2005.
    On July 9, 2004, the Pacific Exchange, Inc. (``PCX'' or 
``Exchange''), pursuant to Section 19(b)(1) of the Securities Exchange 
Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ filed with the 
Securities and Exchange Commission (``Commission'') a proposed rule 
change to delete certain of its rules, or portions thereof, the 
Exchange determined to be obsolete or unnecessary. The Exchange amended 
the proposal on February 9, 2005,\3\ and March 10, 2005.\4\ The 
proposed rule change, as amended by Amendment Nos. 1 and 2, was 
published for notice and comment in the Federal Register on March 24, 
2005.\5\ The Commission did not receive comments on the proposal. This 
order approves the proposed rule change, as amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 replaced and superseded the original 
proposal.
    \4\ Amendment No. 2 partially amended the proposed rule change.
    \5\ See Securities Exchange Act Release No. 51392 (March 17, 
2005), 70 FR 15139.
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    The Exchange proposes to delete PCX Rule 4.7, PCX Rule 11.12(b), 
and PCX Options Floor Procedure Advice D-10, as the Exchange determined 
that such rules are obsolete or superfluous in the Exchange's current 
market structure.
    PCX Rule 4.7 requires OTP Holders that are exempt from the net 
capital requirement filings (Options Market Makers without proprietary 
trading and inactive lessors) to file with the Exchange a balance sheet 
and income statement every calendar quarter. The Exchange represented 
that this rule is obsolete because the Exchange never implemented this 
reporting requirement as unnecessary. According to the Exchange, 
pursuant to Rule 17a-10 under the Act,\6\ exempt OTP Holders are only 
required to file an annual FOCUS Report, which includes a balance sheet 
and income statement on an annual basis.
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    \6\ 17 CFR 240.17a-10.
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    PCX Rule 11.12(b) relates to PCX Joint Accounts reporting 
requirements. The Exchange proposed to delete this provision as 
unnecessary. According to the Exchange, PCX, by policy, does not allow 
the use of joint accounts by OTP Holders or OTP Firms for which the 
Exchange serves as the Designated Examining Authority, with one 
exception. Joint accounts are allowed for Market Makers who trade on 
the floor. The use of these accounts is controlled by Shareholder and 
Registration Services (``SRS''). SRS assigns the acronyms for use of 
these accounts (e.g., J68). Since these accounts are assigned by SRS, 
and all trades are monitored daily and fed through PCX's existing 
surveillance systems, the Exchange does not require a separate weekly 
reporting requirement.
    PCX Options Floor Procedure Advice D-10 (Imprinting the Name of OTP 
Holder or OTP Firm on Trade Tickets) requires that the name of the OTP 
Holder or OTP Firm be imprinted on the trade tickets. The Exchange 
represented that it no longer imposes such requirement. The required 
ticket

[[Page 24155]]

information is now set forth in PCX Rule 6.68.
    After careful review of the proposed rule change, the Commission 
finds that the proposed rule change, as amended, is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to a national securities exchange.\7\ Specifically, the 
Commission believes that the proposed rule change is consistent with 
Section 6(b)(5) of the Act,\8\ in that it is designed to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and to protect 
investors and the public interest. The Commission believes that the 
proposal amends the Exchange's rules to more accurately reflect the 
Exchange's actual practices and policies, and, therefore, should 
promote greater transparency and improved understanding of Exchange 
rules.
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    \7\ In approving the proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(5).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-PCX-2004-65) and Amendment 
Nos. 1 and 2 are approved.
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    \9\ 15 U.S.C. 78s(b)(2).

    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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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-2199 Filed 5-5-05; 8:45 am]
BILLING CODE 8010-01-P