76806 Federal Register / Vol. 69, No. 245 / Wednesday, December 22, 2004 / Notices 

6The proposed new standard is substantially 

similar to Rule 2320 (‘‘Best Execution’’) of the 

National Association of Securities Dealers 

(‘‘NASD’’). However, the NASD has filed a 

proposed rule change to amend Rule 2320. See File 

No. SR–NASD–2004–26.

7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5).

9 17 CFR 200.30\3(a)(12).

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

2 17 CFR 240.19b–4.

contends, therefore will continue to 

execute orders at the BBO price 

voluntarily, as a means of maintaining 

superior execution quality statistics.

Under the proposed revision of 

Article XX, Rule 37(a), the specific 

provisions of the BEST Rule would be 

deleted. Instead, the specialist’s 

execution obligation would be described 

in more general terms. Under the 

proposed new standard, a CHX 

specialist would, in executing an order 

manually, be obligated to ‘‘* * * use 

reasonable diligence to ascertain the 

best available price for the subject 

security so that the resultant execution 

price is as favorable to the order sender 

as possible under prevailing market 

conditions.’’ Among the factors that will 

be considered by the Exchange’s 

Department of Market Regulation in 

determining whether a specialist has 

used ‘‘reasonable diligence’’ are: (a) The 

character of the market for the security, 

e.g., price, volatility, relative liquidity, 

and pressure on available 

communications; and (b) the size and 

type of transaction.6

Significantly, although this standard 

may appear more general in its terms, it 

does not remove a CHX specialist’s 

obligation to provide a timely best 

execution for each order, nor does it 

modify any other specialist obligations 

set forth in Article XXX of the CHX 

Rules. The CHX Department of Market 

Regulation has indicated that it will 

continue its surveillance of order 

executions to ensure that CHX 

specialists meet all of their obligations 

to each order. 

It is also important to note that the 

CHX rules (specifically, CHX Article 

XX, Rule 37(b)) would continue to 

require execution of the BBO price for 

orders that are automatically executed 

within the Exchange’s MAX system. 

The Exchange represents that there is no 

proposal forthcoming to modify 

automatic execution price guarantees. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder that 

are applicable to a national securities 

exchange, and, in particular, with the 

requirements of Section 6(b).7 In 

particular, the proposed rule is 

consistent with Section 6(b)(5) of the 

Act in that it is designed to promote just 

and equitable principles of trade, to 

remove impediments and to perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest.8

B. Self-Regulatory Organization’s 

Statement of 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 Regarding 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 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such other period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve the proposed 

rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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 rulecomments@sec.gov. Please include File 

Number SR–CHX–2004–03 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Jonathan G. Katz, Secretary, 

Securities and Exchange Commission, 

450 Fifth Street, NW., Washington, DC 

20549–0609. 

All submissions should refer to File 

Number SR–CHX–2004–03. 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, 450 Fifth Street, NW., 

Washington, DC 20549. Copies of such 

filing also will be available for 

inspection and copying at the principal 

offices of the CHX. 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–CHX–

2004–03 and should be submitted on or 

before January 12, 2005.

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.9

J. Lynn Taylor, 

Assistant Secretary.

[FR Doc. 04–27943 Filed 12–21–04; 8:45 am] 

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–50844; File No. SR–NYSE–

2004–53] 

Self Regulatory Organizations; New 

York Stock Exchange, Inc.; Order 

Granting Approval to Proposed Rule 

Change and Amendment Nos. 1 and 2 

Relating to a Fee for the NYSE Alerts 

Datafeed 

December 13, 2004. 

On September 17, 2004, the New York 

Stock Exchange, Inc. (‘‘NYSE’’ 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 

establish a fee of $500 per month for a 

Federal Register / Vol. 69, No. 245 / Wednesday, December 22, 2004 / Notices 76807

3See letter from Mary Yeager, Assistant Secretary, 

NYSE, to Nancy Sanow, Assistant Director, Division 

of Market Regulation (‘‘Division’’), Commission, 

dated October 14, 2004 (‘‘Amendment No. 1’’).

4See letter from Mary Yeager, Assistant Secretary, 

NYSE to Nancy Sanow, Assistant Director, Division, 

Commission, dated October 27, 2004 (‘‘Amendment 

No. 2’’).

5See Securities Exchange Act Release No. 50639 

(November 5, 2004), 69 FR 65488.

6 In aproving this proposed rule change, as 

amended, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f).

7 15 U.S.C. 78f.

8 15 U.S.C. 78f(b)(4).

9 15 U.S.C. 78s(b)(2).

10 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 48264 

(July 31, 2003), 68 FR 47124.

4 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. Matlin, Senior 

Counsel, Regulatory Policy, PCX, to Nancy J. 

Sanow, Assistant Director, Division of Market 

Regulation (‘‘Division’’), Commission, dated 

October 25, 2004, and accompanying Form 19b–4 

(‘‘Amendment No. 1’’). Amendment No. 1 replaced 

and superseded the originally filed proposed rule 

change.

4See letter from Steven B. Matlin, Senior 

Counsel, Regulatory Policy, PCX, to Nancy J. 

Sanow, Assistant Director, Division, Commission, 

dated October 25, 2004 (‘‘Amendment No. 2’’) 

Amendment No. 2 made technical corrections to the 

proposed rule text of the proposed rule change, as 

amended.

5See Securities Exchange Act Release No. 50645 

(November 5, 2004), 69 FR 65670.

customer’s receipt of the NYSE Alerts 

datafeed. On October 15, 2004, the 

NYSE filed Amendment No. 1 to the 

proposed rule change.3 On October 28, 

2004, the NYSE filed Amendment No. 2 

to the proposed rule change.4

The proposed rule change, as 

amended, was published for comment 

in the Federal Register on November 12, 

2004.5 The Commission received no 

comments on the amended proposal.

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 6 and, in particular, 

the requirements of Section 6 of the 

Act 7 and the rules and regulations 

thereunder. The Commission finds 

specifically that the proposed rule 

change, as amended, is consistent with 

Section 6(b)(4) of the Act 8 in that it is 

designed to provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among the Exchange’s 

members and other persons using its 

facilities.

The Commission notes that the NYSE 

is amending its fee schedule to 

incorporate a $500 fee for its NYSE 

Alerts datafeed, which will provide realtime information relating to MOC 

Market Imbalances, Delayed Openings/

Trading Halts, ITS Pre-Opening 

Indications/Trading Range Indications, 

Trading Collar Messages, and Circuit 

Breaker Messages. The Commission 

further notes that the information that 

would be included in the NYSE Alerts 

datafeed is currently available and 

would continue to be available to the 

public through the Consolidated Tape 

Association network and through 

various news services. Vendors and 

investors who choose to subscribe to 

NYSE Alerts would be paying for the 

convenience of having this currently 

available public information repackaged 

into a single datafeed. The Commission 

therefore believes that the proposed fee 

is reasonable and finds that the 

proposed rule change, as amended, is 

consistent with the Act. 

It is therefore ordered, pursuant to 

Section 19(b)(s) of the Act 9, that the 

proposed rule change (File No. SR–

NYSE–2004–53), as amended, be, and it 

hereby is, approved.

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.10

Margaret H. McFarland, 

Deputy Secretary.

[FR Doc. 04–27937 Filed 12–21–04; 8:45 am] 

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–50847; File No. SR–PCX–

2002–57] 

Self-Regulatory Organizations; Notice 

of Withdrawal of Proposed Rule 

Change by the Pacific Exchange, 

Incorporated Relating to the 

Implementation of a New Order Audit 

Trail System 

December 14, 2004. 

On August 9, 2002, the Pacific 

Exchange, Inc. (‘‘PCX’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

a proposed rule change pursuant to 

Section 19(b)(1) of the Securities 

Exchange Act of 1934 (the ‘‘Act’’),1 and 

Rule 19b–4 thereunder,2 to adopt new 

rules relating to the creation of an order 

audit trail system called Electronic 

Order Capture System (‘‘EOC’’). On July 

28, 2003, the Exchange filed 

Amendment No. 1 to the proposed rule 

change. On July 30, 2003, the Exchange 

submitted Amendment No. 2 to the 

proposed rule change. On August 7, 

2003, the proposed rule change, as 

amended, was published for comment 

in the Federal Register to solicit 

comment for interest persons.3 No 

comments were received. Subsequently, 

on October 9, 2003 and October 14, 

2003, the Exchange submitted 

Amendment Nos. 3 and 4 to the 

proposed rule change.

On December 14, 2004, the Exchange 

withdrew the proposed rule change and 

all amendments thereto.

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.4

J. Lynn Taylor, 

Assistant Secretary.

[FR Doc. 04–27936 Filed 12–21–04; 8:45 am] 

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–50868; File No. SR–PCX–

2004–59

Self-Regulatory Organizations; Pacific 

Exchange, Inc.; Order Approving a 

Proposed Rule Change and 

Amendment Nos. 1 and 2 Thereto 

Relating to a New Order Modifier 

Entitled ‘‘Proactive if Locked Reserve’’

December 16, 2004. 

On July 1, 2004, the Pacific Exchange, 

Inc. (‘‘PCX’’ or ‘‘Exchange’’), through its 

wholly-owned subsidiary PCX Equities, 

Inc. (‘‘PCXE’’), 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 

amend its rules governing the 

Archipelago Exchange (‘‘ArcaEx’’), the 

equities trading facility of PCXE, by 

adding new processing capability for 

ArcaEx Reserve Orders in situations 

where a Reserve order in an exchangelisted security is locked by another 

market. On October 26, 2004, the PCX 

submitted Amendment No. 1 to the 

proposed rule change.3 On October 28, 

2004, the PCX submitted Amendment 

No. 2 to the proposed rule change.4 The 

proposed rule change, as amended, was 

published for comment in the Federal 

Register on November 15, 2004.5 The 

Commission received no comments on 

the proposal.

The Exchange proposes to add a new 

order modifier entitled ‘‘Proactive if 

Locked Reserve’’ as an additional