[Federal Register Volume 70, Number 124 (Wednesday, June 29, 2005)]
[Notices]
[Pages 37489-37491]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-3385]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51910; File No. SR-Phlx-2005-34]


Self-Regulatory Organizations: Philadelphia Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto Relating to the Electronic Submission of 
Financial Reports

June 22, 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 May 9, 2005, the Philadelphia Stock Exchange, Inc. (``Phlx'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described

[[Page 37490]]

in items I, II, and III below, which Items have been prepared by the 
Phlx. On June 13, 2005, Phlx filed Amendment No. 1 to the proposed rule 
change.\3\ The Exchange has designated this proposal as a practice with 
respect to the administration of an existing rule pursuant to section 
19(b)(3)(A)(i) of the Act,\4\ and Rule 19b4(f)(1) thereunder,\5\ 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.\6\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The effective date of the original proposed rule change is 
May 9, 2005 and the effective date of the amendment is June 13, 
2005. For purposes of calculating the 60-day period within which the 
Commission may summarily abrogate the proposed rule change, as 
amended, under Section 19(b)(3)(C) of the Act, the Commission 
considers the period to commence on June 13, 2005, the date on which 
the Phlx submitted Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
    \4\ 15 U.S.C. 78s(b)(3)(A)(i).
    \5\ 17 CFR 240.19b-4(f)(1).
    \6\ In an e-mail from Angela Dunn, Director, Phlx, to E. David 
Hwa, Special Counsel, Division of Market Regulation, Commission, 
dated June 17, 2005, Phlx agreed to minor revisions by Commission 
staff made to the rule change and this notice.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Phlx, pursuant to section 19(b)(1) \7\ and Rule 19b-4 
thereunder,\8\ proposes to amend Exchange Rule 703. The proposed 
amendment would require Phlx members that compute net capital or 
positive net liquid assets and for which the Exchange is their 
designated examining authority (``DEA''), to submit electronically 
certain financial reports to the Exchange in lieu of manual filings.
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    \7\ 15 U.S.C. 78s(b)(1).
    \8\ 17 CFR 240.19b-4.
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    The text of the proposed rule change is below. New text is 
italicized.
* * * * *

Rule 703. Financial Responsibility and Reporting

    (a)-(f) No change.
Commentary
    .01 No Change
    .02 Organizations designated to the Exchange for financial 
responsibility pursuant to SEC Rule 17d-1 and subject to SEC Rules 
15c3-1 and 17a-5 or exempt from SEC Rule 15c3-1 and maintaining net 
liquid assets in accordance with Rule 703(a), must file electronically 
with the Exchange's Examinations Department, utilizing such method as 
required by the Exchange, FOCUS Reports and filings required by SEC 
Rule 17a-5(a) and (b) and Rule 703(c), (d) and (f). Exchange members 
are still obligated to submit such filings to the Securities and 
Exhange Commission as specified in the Securities Exchange Act of 1934 
(``Act''), as amended, and the rules promulgated under the Act.
* * * * *

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 Phlx 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 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

1. Purpose
    The purpose of the proposed rule change is to create an efficient 
method of collecting FOCUS reports and other financial filings, 
including those required by SEC Rules 17a-5(a) and (b) and Rule 703(c), 
(d) and (f) (``Financial Documents''). Currently, the Financial 
Documents are provided in hard copy format to Exchange staff. The 
information is manually key punched by Exchange staff into a database 
utilized by the Exchange for submissions to the Commission and for 
collecting monthly financial information. The proposed rule change 
would require Exchange members, for which the Exchange is their DEA, to 
electronically submit their Financial Documents to the Exchange, 
utilizing Exchange proprietary software.
    The features of the electronic submission system are designed to 
eliminate errors and provide more efficient means of gathering 
necessary financial information. The Exchange expects to provide each 
user with password and logon identification and create a profile for 
each user. It is the Exchange's intention to design the software with 
required fields of entry, as well as edit checks for various balances 
that are entered by the users. Additionally, the software is intended 
to automatically provide alerts, if the user is past the due date or 
the financial information indicates the firm is below a financial 
requirement when submitting the report. These safeguards should lead to 
fewer mistakes and provide users with helpful tools to assist with 
filings.
    The Exchange anticipates it will have the ability to receive 
summary and exception reports and review the information gathered by 
the software. The Exchange will submit required financials to the 
Commission. In summary, the electronic submission process should create 
a greater likelihood that data from members will be accurate and 
efficient, as well as utilize fewer Exchange resources.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act \9\ in general, and furthers the objectives of section 
6(b)(5) of the Act \10\ in particular, in that it is designed to 
promote just and equitable principles of trade and to protect investors 
and the public interest.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 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 inappropriate burden on competition.

 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

    The foregoing proposed rule change has been designated as a 
practice with respect to the administration of an existing rule 
pursuant to section 19(b)(3)(A)(i) \11\ of the Act and Rule 19b-4(f)(1) 
\12\ thereunder. Accordingly, the proposal will take effect upon filing 
with the Commission. Notwithstanding that this rule change would be 
effective immediately upon filing, the Exchange will start rolling out 
member firms onto the electronic filing system on approval of this 
filing, and after notice to membership, with complete implementation 
and mandatory rollout by January 2006. At any time within 60 days of 
the filing of the 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,

[[Page 37491]]

or otherwise in furtherance of the purposes of the Act.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(i).
    \12\ 17 CFR 240.19b-4(f)(1).
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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 S-Phlx-2005-34 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.
    All submissions should refer to File Number SR-Phlx-2005-34. 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, 100 F Street, 
NE., Washington, DC 20549. Copies of the filing also will be available 
for inspection and copying at the principal office of the Phlx. 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-Phlx-2005-34 and should be 
submitted on or before July 20, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E5-3385 Filed 6-28-05; 8:45 am]
BILLING CODE 8010-01-P