Document Headings

                    Document headings vary by document type but may contain                    the following:                  
                -                       the agency or agencies that issued and signed a document                    
                -                       the number of the CFR title and the number of each part                      the document amends, proposes to amend, or is directly                      related to                    
                -                       the agency docket number / agency internal file number                    
                -                       the RIN which identifies each regulatory action listed in                      the Unified Agenda of Federal Regulatory and Deregulatory                      Actions                    

                    See the                                          Document Drafting Handbook                                        for more details.                  

###### Securities and Exchange Commission

          - [Release No. 34-49176; File No. SR-PCX-2003-59]

                    On October 21, 2003, 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 Market Maker obligations on the Archipelago Exchange (“ArcaEx”), the equities trading facility of PCXE. The PCX filed Amendment No. 1 to the proposal on December 2, 2003.[3]                                          The proposed rule change, as amended, was published for comment in the                     **Federal Register**                     on December 29, 2003.[4]                                          The Commission received no comment letters on the proposal. This order approves the proposed rule change, as amended.                

                    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 [5]                                          and, in particular, the requirements of Section 6 of the Act [6]                                          and the rules and regulations thereunder. Specifically, the Commission believes that the proposed rule change is consistent with Section 6(b),[7]                                          which, among other things, requires that the PCX's rules be designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to 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. The Commission notes that the PCX's restrictions on Market Makers requiring them to become odd-lot dealers and to maintain cleanup orders in the securities in which they maintain a market currently impose a competitive barrier vis-à-vis other market centers in attracting Market Maker participation on ArcaEx because competing market centers do not impose such requirements.[8]                                          The Commission notes that the Exchange believes that eliminating the aforementioned requirements will facilitate additional Market Maker participation on ArcaEx and will further enhance order interaction, provide greater depth in liquidity, and foster price competition. Moreover, the Exchange believes that the elimination of such requirements will place ArcaEx on a level playing field with other market centers and allow ArcaEx to fairly compete for Market Maker,[9]                                          and that the impact on the system from removing these requirements for Market Makers would be minimal on the ArcaEx.                
      ( print page 6357)    
*It is therefore ordered,*                     pursuant to Section 19(b)(2) of the Act,[10]                                          that the proposed rule change and Amendment No. 1 thereto (File No. SR-PCX-2003-59) are approved.                

                        For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[11] 

Margaret H. McFarland, 

Deputy Secretary.

# Footnotes

1.                             15 U.S.C. 78s(b)(1).                    
        Back to Citation      

2.                             17 CFR 240.19b-4.                    
        Back to Citation      

3.                             Amendment No. 1 replaces the originally filed Form 19b-4 in its entirety.                    
        Back to Citation      

4.                                                     *See*                         Securities Exchange Act Release No. 48928 (December 16, 2003), 68 Fr 75010 (December 29, 2003).                    
        Back to Citation      

5.                             In approving this proposed rule change, the Commission notes that it has considered its impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).                    
        Back to Citation      

6.                             15 U.S.C. 78f.                    
        Back to Citation      

7.                             15 U.S.C. 78f(b).                    
        Back to Citation      

8.                                                     *See e.g.,*                         NASD Rules 4611 and 4612.                    
        Back to Citation      

9.                                                     *See*                         note 4, supra.                    
        Back to Citation      

10.                             15 U.S.C. 78s(b)(2).                    
        Back to Citation      

11.                                 17 CFR 200.30-3(a)(12).                        
        Back to Citation      

[FR Doc. 04-2811 Filed 2-9-04; 8:45 am]

BILLING CODE 8010-01-P