Federal Register / Vol. 65, No. 113 / Monday, June 12, 2000 / Notices 36879

9 In approving this proposal, the Commission has

considered its impact on efficiency, competition,

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

10Section 11A(a)(1)(C)(v) of the Act.

11NYSE Approval Order at 30179.

12 15 U.S.C. 78s(b)(2).

13 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.16b–4.

3See April 19, 2000 letter from Richard S.

Rudolph, Counsel, Exchange, to Rebekah Liu,

Special Counsel, Division of Market Regulation,

SEC (‘‘Amendment No. 1’’ ). In Amendment No. 1,

the Exchange requested that the proposed rule

change be filed under Section 19(b)(3)(A) of the Act

and Rule 19b–4(f)(6) thereunder. 15 U.S.C.

78s(b)(3)(A) and 17 CFR 240.19b–4(f)(6). The

Exchange also requested that the Commission waive

the 5-day notice of its intent to file the proposal,

and requested that the Commission waive the 30-

day period before the proposal becomes effective to

permit the proposed rule change to become

immediately effective.

4 15 U.S.C. 78s(b)(3)(A).

5 17 CFR 240.19b–4(f)(6).

6See Exchange Act Release No. 42272 (December

23, 1999), 65 FR 153 (January 3, 2000) SR–Phlx–99–

42).

7The amendments replaced the President, which

the Exchange no longer has, with the On-Floor Vice

Chairman of the Board of Governors.

restrictions will help further the

national market system objective in

Section 11A(a)(1)(C)(i) to assure the

economically efficient executive of

securities transactions, and in Section

11A(a)(1)(C)(ii) to assure fair

competition between exchange markets

and markets other than exchange

markets.9

As discussed more fully in the NYSE

Approval Order, the existence of offboard trading restrictions can no longer

be justified in an age when advancing

technology and expanding trading

volume are introducing new

competitive challenges for the U.S.

securities markets, both at home and

abroad. Off-board trading rules such as

Rule 132 directly restrict a certain type

of market center competition—

competition between exchange markets

and markets other than exchange

markets. Their rescission today

eliminates an inappropriate regulatory

burden on competition that runs

contrary to the objectives set forth in the

Act.

Off-board trading restrictions have

been justified on the basis that they

promote the interaction of investors’

orders without participation by a

dealer—indeed an objective set forth in

the Act.10 The Commission believes,

however, that whatever beneficial effect

off-board trading restrictions such as

Rule 132 may have in enhancing the

interaction of investor orders can no

longer justify their anticompetitive

nature. To the extent off-board trading

rules enhance order interaction, they do

so in an undesirable way—by

attempting a direct restriction on

competition. Such attempts are never

wholly successful and typically only

distort, rather than eliminate,

competition and introduce unnecessary

costs ultimately borne by investors.

The outcome of competition between

market center should depend on which

market centers are most able to serve

investor interests by providing the

highest quality trading services at the

lowest possible prices; the

Commission’s regulatory task is

removing unwarranted regulatory

barriers to competition between market

centers. As stated in the NYSE Approval

Order, the rescission of off-board trading

rules is ‘‘intended solely to free the

forces of competition and allow investor

interests to control the success or failure

of individual market centers.’’ 11 The

same rationale and motivation support

the Commission’s action today.

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,12 that the

proposed rule change (SR–Phlx–00–12)

is approved.

For the Commission, by the Division

of Market Regulation, pursuant to

delegated authority.13

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–14725 Filed 6–9–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 42898; File No. SR–Phlx–00–

41]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Philadelphia Stock Exchange, Inc.

Extending the Pilot Program Regarding

Exchange Rule 98, Emergency

Committee, Until August 21, 2000

June 5, 2000.

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 April 18,

2000, the Philadelphia Stock Exchange,

Inc. (‘‘Phlx’’ or ‘‘Exchange’’), filed a

proposed rule change with the

Securities and Exchange Commission

(‘‘SEC’’ or ‘‘Commission’’). The

proposed rule change is described in

Items I, II, and III below, which Items

have been prepared by the Exchange.

On April 20, 2000, the Exchange filed

Amendment No. 1 to the proposed rule

change.3 The Exchange filed the

proposed rule change, as amended,

pursuant to Section 19(b)(3)(A) of the

Act,4 and Rule 19b–4(f)(6) thereunder,5

which renders the proposed rule change

effective upon filing with the

Commission. The Commission is

publishing this notice to solicit

comments on the proposed rule change,

as amended, from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange is proposing to extend

the pilot program relating to Exchange

Rule 98, Emergency Committee, for an

additional 120 days, or until August 21,

2000. No changes to the existing rule

language are being proposed.

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

Exchange included statements

concerning the purpose of and basis for

the proposed rule change, as amended,

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

On December 23, 1999, the

Commission granted approval to

amendments to Exchange Rule 98,

Emergency Committee (the

‘‘Committee’’) on a 120-day pilot basis.6

In general, the Committee is authorized

to determine the existence of, and take

action with respect to, extraordinary

market conditions or other emergencies

at the Exchange. The amendments to

Exchange Rule 98 updated the

composition of the Committee to reflect

the current governance structure of the

Exchange,7 clarified that the Committee

was authorized to act in the event of any

emergency condition created by the

Year 200 date change, and deleted a

provision referencing CENTRAMART,

an equity order entry system which is

no longer used on the Exchange. The

Committee is now composed of five

individuals: the Chairman of the Board

of Governors; the On-Floor Vice

Chairman of the Board of Governors;

36880 Federal Register / Vol. 65, No. 113 / Monday, June 12, 2000 / Notices

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

9 15 U.S.C. 78s(b)(3)(A).

10 17 CFR 240.19b–4(f)(6).

11For purposes only of accelerating the operative

date of this proposal, the Commission has

considered its impact on efficiency, competition,

and capital formation. 15 U.S.C. 78c(f). 12 17 CFR 200.30–3(a)(12).

and the Chairmen of the Floor

Procedure Committee, the Options

Committee, and the Foreign Currency

Options Committee.

The Commission approved the

amendments to Exchange Rule 98 on a

pilot basis in order to allow the

Exchange to examine the operation of

the Committee to ensure that the

Committee is not dominated by any one

Exchange interest (e.g., On-Floor or OffFloor interests). The Commission

requested that the Exchange report back

to the Commission on its views as to

whether the Committee structure

ensures that all Exchange interests are

fairly represented by the Committee.

The Exchange has requested that the

pilot program be extended in order to

provide it more time to examine the

operation of the Committee and submit

the requested information to the

Commission.

2. Statutory Basis

The Exchange believes that the

proposed rule change, as amended, is

consistent with the provisions of

Section 6(b)(5) of the Act8 which

requires that the rules of an Exchange be

designed to perfect the mechanisms of

a free and open market and a national

market system, and to protect investors

and the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change, as amended,

will result in 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

The Exchange has neither solicited

nor received written comments on the

proposed rule change, as amended.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change has become

effective upon filing pursuant to Section

19(b)(3)(A)(iii) of the Act 9 and Rule

19b–4(f)(6) 10 thereunder because the

proposed rule change does not (i)

significantly affect the protection of

investors or the public interest; (ii)

impose any significant burden on

competition; and (iii) become operative

for 30 days after the date of filing, or

such shorter time as the Commission

may designate if consistent with the

protection of investors and the public

interest; provided the Exchange has

given the Commission written notice of

its intent to file the proposed rule

change, along with a brief description

and text of the proposed rule change, at

least five business days prior to the date

of filing of the proposed rule change, or

such shorter time as designated by the

Commission. At any time within 60

days of the filing of a rule change

pursuant to Section 19(b)(3)(A) of the

Act, the Commission may summarily

abrogate the 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

purposes of the Act.

The Commission finds that it is

appropriate to accelerate the effective

date of the proposed rule change and to

permit the proposed rule change to

become immediately effective because

the proposal simply extends a

previously approved pilot program for

an additional 120 days, or until August

21, 2000. By extending the pilot

program, the Commission will enable

the Committee to be in place and

operational in the event of any

extraordinary market conditions or

emergencies at the Exchange, and will

afford the Exchange the opportunity to

respond to the Commission’s request to

provide information on whether the

Committee is fairly representing all

interests of the Exchange.11

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.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 20549–0609. 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

with the Commission’s Public Reference

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the Exchange. All

submissions should refer to the File No.

SR–Phlx–00–41 and should be

submitted by July 3, 2000.12

For the Commission, by the Division

of Market Regulation, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–14728 Filed 6–9–00; 8:45 am]

BILLING CODE 8010–01–M

UNITED STATES SENTENCING

COMMISSION

Sentencing Guidelines for United

States Courts

AGENCY: United States Sentencing

Commission.

ACTION: Notice of preliminary policy

priorities for amendment cycle ending

May 1, 2001. Request for comment.

SUMMARY: As part of its statutory

authority and responsibility to analyze

sentencing issues, including operation

of the federal sentencing guidelines, and

in accordance with Rule 5.2 of its Rules

of Practice and Procedure, the

Commission has preliminarily

identified and hereby proposes certain

priorities as the focus of its policy

development work, including possible

amendments to guidelines, policy

statements, and commentary, for the

amendment cycle ending May 1, 2001.

The Commission invites comment on

these proposed priority areas and on

any other sentencing issues that it

should address in the coming year.

DATES: Public comment should be

received by the Commission not later

than July 7, 2000.

ADDRESSES: Send comment to: United

States Sentencing Commission, One

Columbus Circle, NE, Suite 2–500,

South Lobby, Washington, DC 20002–

8002. Attn: Public Affairs.

FOR FURTHER INFORMATION CONTACT:

Michael Courlander, Public Affairs

Officer, Telephone: (202) 502–4590.

SUPPLEMENTARY INFORMATION: The

United States Sentencing Commission,

an independent commission in the

judicial branch of the United States

Government, is empowered by 28 U.S.C.

994(a) to promulgate sentencing

guidelines and policy statements for

federal courts. Section 994 also directs

the Commission to review and revise

periodically promulgated guidelines