[Federal Register Volume 70, Number 117 (Monday, June 20, 2005)]
[Notices]
[Pages 35491-35492]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-3157]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51827; File No. SR-Phlx-2005-20]


Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Order Granting Approval to Proposed Rule Change, and Amendment No. 1 
Thereto, Relating to the Elimination of the Prohibition Against the 
Entry of Multiple Orders in an Option Within Any 15-Second Period for 
an Account or Accounts of the Same Beneficial Owner

June 13, 2005.
    On March 24, 2005, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
or ``Exchange'') 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

[[Page 35492]]

amend Exchange Rule 1080, Philadelphia Stock Exchange Automated Options 
Market (``AUTOM'') System,\3\ to eliminate the restriction against 
Order Entry Firms \4\ entering or permitting the entry of multiple 
orders in an option within any 15-second period for an account or 
accounts of the same beneficial owner and to eliminate a similar 
provision in Commentary .05 to Exchange Rule 1080 relating to 
proprietary orders submitted by off-floor broker-dealers.\5\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ AUTOM is the Exchange's electronic order delivery, routing, 
execution and reporting system, which provides for the automatic 
entry and routing of equity option and index option orders to the 
Exchange trading floor. Orders delivered through AUTOM may be 
executed manually, or certain orders are eligible for AUTOM's 
automatic execution features, Book Sweep and Book Match. Equity 
option and index option specialists are required by the Exchange to 
participate in AUTOM and its features and enhancements. See Exchange 
Rule 1080.
    \4\ The Exchange defines an ``Order Entry Firm'' as a member 
organization of the Exchange that is able to route orders to AUTOM. 
See Exchange Rule 1080(c)(ii)(A)(1).
    \5\ The term ``off-floor broker-dealer'' means a broker-dealer 
that delivers orders from off the floor of the Exchange for the 
proprietary account(s) of such broker-dealer, including a market 
maker located on an exchange or trading floor other than the 
Exchange's trading floor who elects to deliver orders via AUTOM for 
the proprietary account(s) of such market maker. See Exchange Rule 
1080(b)(i)(C).
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    On April 11, 2005, the Exchange filed Amendment No. 1 to the 
proposed rule change.\6\ The proposed rule change, as amended, was 
published for comment in the Federal Register on May 6, 2005.\7\ The 
Commission received no comments on the proposal.
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    \6\ In Amendment No. 1, the Exchange revised the status of the 
proposed rule change from one that would take effect upon filing 
with the Commission under Section 19(b)(3)(A) of the Act, 15 U.S.C. 
78s(b)(3)(A), to one that is filed under Section 19(b)(2) of the 
Act.
    \7\ See Securities Exchange Act Release No. 51640 (April 29, 
2005), 70 FR 24156.
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    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 \8\ 
and, in particular, the requirements of Section 6(b) of the Act \9\ and 
the rules and regulations thereunder. The Commission finds specifically 
that the proposed rule change, as amended, is consistent with Section 
6(b)(5) of the Act,\10\ in that it is designed to promote just and 
equitable principles of trade, remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest. In the 
Commission's view, removal of the limitation on the entry into AUTOM of 
multiple orders by an Order Entry Firm for the same beneficial account 
owner within any 15-second period should help facilitate more efficient 
and immediate executions on the Exchange.
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    \8\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-Phlx-2005-20), as amended, 
be, and hereby is, approved.
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    \11\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-3157 Filed 6-17-05; 8:45 am]
BILLING CODE 8010-01-P