[Federal Register Volume 70, Number 161 (Monday, August 22, 2005)]
[Notices]
[Pages 49003-49004]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4548]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52263; File No. SR-PCX-2005-95]


Self-Regulatory Organizations; Pacific Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Extend 
the Exchange's Standard Position and Exercise Limit Pilot Program

August 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 August 11, 2005, the Pacific Exchange, Inc. (``PCX'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in items I and 
II below, which items have been prepared by the PCX. The Exchange has 
filed the proposal as a ``non-controversial'' rule change pursuant to 
section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 
which renders it 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 proposes to amend its rules to extend the time period in 
PCX Rule 6.8(a), which covers the position limit and exercise limits 
pilot program for equity option contracts and options on the Nasdaq-100 
Tracking Stock (``QQQQ'') (``Pilot Program''). The text of the proposed 
rule change is available on the PCX's Web site (http://www.pacificex.com), at the PCX's principal office, 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 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 this proposal is to extend for six months the 
Exchange's Pilot Program relating to standard position and exercise 
limits for equity option contracts and for options on QQQQ for a six-
month period.\5\ Specifically, the Pilot Program increased the 
applicable position and exercise limits for equity options and options 
on the QQQQ in accordance with the following levels: \6\
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    \5\ The Pilot Program is set to expire on August 25, 2005. See 
Securities Exchange Act Release No. 51286 (March 1, 2005), 70 FR 
11297 (March 8, 2005) (notice of filing and immediate effectiveness 
of File No. SR-PCX-2003-55, as amended) (``Pilot Program Notice'').
    \6\ Except when the Pilot Program is in effect.

------------------------------------------------------------------------
                                             Pilot Program equity option
   Current equity option contract limit            contract limit
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13,500 contracts..........................  25,000 contracts.
22,500 contracts..........................  50,000 contracts.
31,500 contracts..........................  75,000 contracts.
60,000 contracts..........................  200,000 contracts.
75,000 contracts..........................  250,000 contracts.
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[[Page 49004]]

 
Current QQQQ Option Contract Limit........  Pilot Program QQQQ Option
                                             Contract Limit
-------------------------------------------
300,000 contracts.........................  900,000 contracts.
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    The Exchange believes that extending the Pilot Program for six 
months is warranted due to the positive feedback from OTP Holders and 
for the reasons cited in the original rule filing that proposed the 
Pilot Program.\7\ Also, the Exchange has not encountered any problems 
or difficulties relating to the Pilot Program since its inception. For 
these reasons, the Exchange requests that the Commission extend the 
Pilot Program for an additional six months.
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    \7\ See Pilot Program Notice, supra note 5.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder and, in particular, 
the requirements of section 6(b) of the Act.\8\ Specifically, the 
Exchange believes the proposed rule change is consistent with section 
6(b)(5) of the Act \9\ that requires that the rules of an exchange be 
designed to promote just and equitable principles of trade, to prevent 
fraudulent and manipulative acts, to remove impediments to and perfect 
the mechanism for a free and open market and a national market system, 
and, in general, 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 forgoing 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 
after the date of this filing, or such shorter time as the Commission 
may designate, it has become effective pursuant to section 19(b)(3)(A) 
of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
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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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    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing.\12\ 
However, Rule 19b-4(f)(6)(iii)\13\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the five-day pre-filing notice requirement and the 30-
day pre-operative delay. The Commission is exercising its authority to 
waive the five-day pre-filing requirement and believes that waiver of 
the 30-day pre-operative delay is consistent with the protection of 
investors and in the public interest. Waiving the five-day pre-filing 
requirement and 30-day pre-operative delay will allow the Pilot Program 
to continue uninterrupted.\14\
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    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ Id.
    \14\ For the purposes only of waiving the operative date of this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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    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, or otherwise 
in furtherance of the Act.

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-2005-95 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-9303.
    All submissions should refer to File No. SR-PCX-2005-95. 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, 100 F Street, NE., 
Washington, DC 20549. 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-2005-95 and should be 
submitted on or before September 12, 2005.
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    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4548 Filed 8-19-05; 8:45 am]
BILLING CODE 8010-01-P