Federal Register / Vol. 69, No. 24 / Thursday, February 5, 2004 / Notices 5641

16See supra n.11.

17See supra note 15.

18 15 U.S.C. 78s(b)(2).

19 15 U.S.C. 78s(b)(2).

20 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3See letter from Steven B. Maitlin, Senior 

Counsel, Regulatory Policy, PCX, to Leah Mesfin, 

Attorney, Division of Market Regulation, 

Commission, dated August 21, 2003 (‘‘Amendment 

No. 1’’). In Amendment No. 1, the Exchange 

replaced the term ‘‘independent Governors’’ in the 

proposed rule text with ‘‘Public Governors.’’

4Securities Exchange Act Release No. 48500 

(September 17, 2003), 68 FR 56030 (September 29, 

2003).

5 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).

6 15 U.S.C. 78f(b)(5).

7See PCX Constitution, Article II, Section 1(a).

8 15 U.S.C. 78s(b)(2).

9 17 CFR 200.30–3(a)(12).

provided in sections 802.02 and 802.03. 

If, at the end thereof, such companies 

are compliant with the continued listing 

standards for which they were originally 

notified, but below the increased 

requirements proposed herein, the 

Exchange would grant them an 

opportunity to present an additional 

business plan advising the Exchange of 

definitive action the company has taken, 

or is taking, that would bring the 

company into conformity with the 

increased requirements within a further 

12 months. In addition, if a company 

completes its currently applicable 

follow-up procedures and Plan and is 

not compliant at that time with the 

continued listing standards for which it 

was originally notified, but is above the 

increased requirements set forth above, 

the Exchange would consider that 

company to be in conformity with the 

continued listing standards. 

The Commission believes that the 

Exchange’s transition policies are 

reasonable and consistent with the Act. 

The Commission notes that these 

policies should impact few 

companies.16 The Commission, 

however, expects that the Exchange will 

follow closely the progress of companies 

that are currently in their Plan period or 

subsequent 12-month period, to ensure 

that these companies will attain the 

proposed continued listing standards. 

The Commission notes that, pursuant to 

section 802.02, the Exchange has the 

discretion to suspend trading in any 

security and apply to the Commission 

for delisting, when the Exchange deems 

it necessary for the protection of 

investors.

The NYSE has requested that the 

Commission find good cause for 

approving the proposed rule change, as 

amended, prior to the thirtieth day after 

the date of publication of notice in the 

Federal Register. The Commission 

believes that it is reasonable to grant 

accelerated approval to allow for the 

efficient administration of the 

Exchange’s original and continued 

listing programs as promptly as 

possible. The Commission notes that the 

listing standard of the NYSE that is 

being modestly lowered, as proposed, 

would remain substantially higher than 

other comparable listing standards of 

other marketplaces.17 In addition, the 

Commission notes that the amended 

original and continued listing standards 

will be in effect only as a pilot program 

for a six-month period. Accordingly, the 

Commission finds good cause, pursuant 

to section 19(b)(2) of the Act,18 for 

accelerated approval of the proposed 

rule change, as amended.

V. Conclusion 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act,19 that the 

proposed rule change (SR–NYSE–2003–

43), as amended, is hereby approved on 

an accelerated basis, as a six-month 

pilot, scheduled to expire on July 29, 

2004.

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.20

Jill M. Peterson, 

Assistant Secretary.

[FR Doc. 04–2335 Filed 2–4–04; 8:45 am] 

BILLING CODE 8010–01–P

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–49138; File No. SR–PCX–

2003–36] 

Self-Regulatory Organizations; Order 

Approving Proposed Rule Change and 

Amendment No. 1 Thereto by the 

Pacific Exchange, Inc. Relating to the 

Composition of Its Audit Committee 

January 28, 2004. 

On July 14, 2003, the Pacific 

Exchange, Inc. (‘‘PCX’’ 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 that would amend its rule 

regarding the PCX’s Audit Committee. 

On August 21, 2003, PCX submitted by 

facsimile Amendment No. 1 to the 

proposed rule change.3 The proposed 

rule change, as modified by Amendment 

No. 1, was published for comment in 

the Federal Register on September 29, 

2003.4 The Commission received no 

comments on the proposal.

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange 5 and, in particular, the 

requirements of Section 6(b)(5) of the 

Act.6 Section 6(b)(5) requires, among 

other things, that the rules of the 

exchange be designed to prevent 

fraudulent and manipulative acts, to 

promote just and equitable principles of 

trade, and, in general, to protect 

investors and the public interest. The 

Commission notes that the proposed 

rule change specifies that all members 

of PCX’s Audit Committee must be 

Public Governors. The PCX Constitution 

requires ‘‘Public Governors’’ to be 

representatives of the public and not a 

broker or dealer or affiliated with a 

broker or dealer.7 Previously, Audit 

Committee members were not required 

to be Public Governors. Furthermore, 

the proposed rule change requires that 

at least one member of the Audit 

Committee have accounting or financial 

management expertise, as the Board of 

Governors interprets such qualification 

in its business judgment. The 

Commission believes that the proposed 

change should help improve the 

Exchange’s governance structure by 

requiring that all members of the Audit 

Committee be Public Governors and that 

at least one of those members have 

accounting or financial management 

expertise. In this way, the independence 

and effectiveness of the Audit 

Committee should be enhanced. 

Therefore, the Commission finds that 

the proposed rule change is consistent 

with the Act.

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,8 that the 

proposed rule change (SR–PCX–2003–

36), as amended by Amendment No. 1, 

be, and hereby is, approved.

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.9

Jill M. Peterson, 

Assistant Secretary.

[FR Doc. 04–2333 Filed 2–4–04; 8:45 am] 

BILLING CODE 8010–01–P