Federal Register / Vol. 62, No. 248 / Monday, December 29, 1997 / Notices 67679

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

2 17 CFR 240.19b–4.

3On November 3, 1997, the Exchange filed with

the Commission a proposed rule change (PCX–97–

42) containing the same substance as the present

filing. That filing was submitted pursuant to

Section 19(b)(3)(A)(iii) of the Act and Rule 19b-4(6)

thereunder. The filing was withdrawn on November

6, 1997. See letter from Michael D. Pierson, Senor

Attorney, Regulatory Policy, PCX, to Michael A.

Walinskas, Division of Market Regulation, SEC, date

November 6, 1997. Regarding the present filing

(PCX–97–45), on November 21, 1997, the Exchange

filed Amendment No. 1 with the Commission.

Amendments No. 1 constitute a substantive change

in the proposal in that it redesignates the proposal

as a ‘‘non-controversial’’ rule filing under Rule 19b–

4(e)(6) rather than Rule 19b–(e)(5). See letter from

Michael D. Pierson, Senior Attorney, Regulatory

Policy, PCX, to Victoria Berberi-Doumar, Division

of Market Regulation, Commission, dated November

21, 1997. On December 17, 1997. the Exchange filed

Amendment No. 2 with the Commission.

Amendment No. 2 modified the text of the rule to

clarify the proposed change.

4The Exchange has represented that the proposed

rule change will not significantly affect the

protection of investors or the public interest, and

will not impose any significant burden on

competition. See, letter from Michael D. Pierson,

Senior Attorney, Regulatory Policy, PCX, to Vitoria

Berberi-Doumar, Division of Market Regulation,

SEC, date December 17, 1997.

5ASAP Memberships are governed by PCX Rule

1.14. Rule 1.14 sets for the terms and conditons of

the Exchange’s program for Electronic. Access

Membership. The rule provides that ASAP

Members must be registered broker-dealers subject

to the Exchange’s disciplinary jurisdiction, and

must pay an annual fee. The Rule further provides

that such Members are entitled to access to Pacific

Computerized Order Access sySTem (‘‘P/COAST’’),

Pacific Options Exchange Trading System

(‘‘POETS’’), and other systems approved by the

Board of Governors.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–33712 Filed 12–24–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCANAGE

COMMISSION

[Release No. 34–39469; File No. SR–PCX–

97–45]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Pacific Exchange, Inc. Relating to

ASAP Membership Requirements

December 19, 1997.

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 November

10, 1997,3 the Pacific Exchange, Inc.

(‘‘PCX’’ or ‘‘Echange’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’ or ‘‘SEC’’) the proposed

rule change as described in Items I, II

and III below, which Items have been

prepared by the self-reuglaory

organization. The Exchange has

designated this proposal as noncontroversial pursuant to Rule 19b4(e)(b) under the Act.4 The Commission

is publishing this notice to solicit

comments on the proposed rule change

from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

PCX is proposing to amend its rules

on Automated System Access Privilege

(‘‘ASAP’’) Memberships.5 The text of

teh proposed rule change is available at

the Office of Secretary, Amex, and at the

Commission.

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

self-regulatory organization included

statements concerning the purpose of

the 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

exaimed at the places specified in Item

IV below. The self-regulatory

organization 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 Exchange is proposing to modify

Rule 1.14 in two respects. First, Rule

1.14(a)(3) currently provides that

telephone access is prohibited to ASAP

Members, except by special exemption

granted by the Board of Governors. The

Exchange is proposing to eliminate this

provision, so that ASAP Members may

place orders over the telephone with

Floor Brokers without first obtaining an

exemption from the Board of Governors.

Second, the Exchange is proposing to

add a provision to Rule 1.14 stating that

at least 80% of an ASAP Member’s total

PCX trade (per calendar quarter) and at

least 80% of an ASAP Member’s total

PCX volume (per calandar quater) must

be executed electronically through

POETS on P/COAST. The 80%

requirements will apply to option

contracts and equity securities

individually. The proposed rule futher

states that the Board of Governors may

grant exemptions to the 80%

requirements on a case-by-case basis.

Currently, under PCX Rules. 1.14(a)(3)

and (1)(5), as ASAP Member may

receive access to P/COAST and POETS

(and other systems approved by the

Board of Governors), but may not have

telephone access to the Trading Floors

without and exemption from the Board

of Governors. Thus, currently, the only

orders that an ASAP Member may send

directly to the Trading Floors are orders

entered electronically (unless and

exemption has been granted). The rule

change will codify a limited exemption

to the current requirement that, in

general ASAP Members may only enter

orders electronically. Specifically, it

will allow up to 20% of an ASAP

Member’s PCX orders to be executed by

telephone. The Exchange believes that

codifying this limited exemption will

make the ASAP Membership program

more attractive to investors and thus

will promote a greaer use of electronic

entry orders on the Exchange. It will

also assure that Members holding

‘‘electronic’’ memberships are entering

the vast majority of their PCX trades

electronically.

The Exchange believes the proposal

will make the Exchange’s program for

electronic membership more viable, and

as such, will allow the Exchange to be

more competive in attracting order flow

to the Exchange.

2. Statutory Basis

The proposal is consistent with

Section 6(b) of the Act, in general, and

Section 6(b)(4), in particular, in that its

designed to facilitate in securities and

promote just and equitable principles of

trade.

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.

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

The Exchange has asserted that the

proposed rule change (i) will not

significantly affect the protection of

investors or the public interest, (ii) will

not impose any significant burden on

competition, and (iii) will not become

operative for 30 days after the date of
67680 Federal Register / Vol. 62, No. 248 / Monday, December 29, 1997 / Notices

6The Commission notes that any substantive

amendment to a proposed rule change filed under

Section (e)(6) of Rule 19b–4 causes the 30 day

delayed implementation period to be restarted from

the date of the filing of the amendment. In addition,

the Commission has waived the requirement that

the Exchange notify the Commission of its intent to

file this proposed rule change five business days

prior to the filing. See Securities Exchange Act

Release No. 35123 (December 20, 1994), 59 FR

66692 (December 28, 1994).

7 17 CFR 240.19b–4(e)(6).

8 17 CFR 200.30–3(a)(12).

this filing. The proposed rule change

was originally submitted to the

Commission on November 11, 1997.

However, the submission of substantive

Amendments No. 1 and No. 2 on

November 21, and December 17, 1997,

respectively, delay the statutorily

required implementation date to January

16, 1998.6 For the foregoing reasons the

rule filing will become operative as a

‘‘non-controversial’’ rule change

pursuant to Rule 19b–4(e)(6) under the

Act.7

At any time within 60 days of the

filing of such 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

purposes of the Act.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning the foregoing.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.,

Washington, D.C. 20549. 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, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the PCX. All submissions

should refer to File No. SR–PCX–97–45

and should be submitted by January 20,

1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–33714 Filed 12–24–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39466; File No. SR–PHLX

97–49]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change and

Amendment No. 1 Thereto by the

Philadelphia Stock Exchange, Inc.,

Relating to Exchange Approval of

Member Advertising

December 18, 1997.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on November 13,

1997, the Philadelphia Stock Exchange,

Inc. (‘‘PHLX’’ or ‘‘Exchange’’) filed with

the Securities and Exchange

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

the proposed rule change as described

in Items I, II, and III below, which Items

have been prepared by the selfregulatory organization (‘‘SRO’’). On

December 15, 1997, the Exchange filed

Amendment No. 1 to the rule proposal.

The Commission is publishing this

notice to solicit comments on the

proposed rule change from interested

persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

Pursuant to Rule 19b–4 of the Act, the

PHLX proposes to amend Phlx Rule 605

to require member or foreign currency

option participant organizations for

which the Phlx is the designated

examining authority (‘‘DEA’’): (1) To

receive Exchange consent prior to using

the Internet to provide market

quotations or to advertise to the general

public; (2) to receive prior Exchange

consent before making use of radio or

television broadcasts for any business

purpose or broadcasting Exchange

quotations on radio or television

programs or via public telephone

reports; and (3) to submit the text of all

commercials or program materials about

securities or investing sponsored by the

firm on radio, television, public

telephone or on the Internet, promptly

following the program in which it was

used. Further, the commentary to the

rule which states that the provisions of

the rule do not apply to advertisements,

market letters and sales literature

relating to options as defined in Rule

1049 would be deleted so that the rule

would apply to all products traded on

the Exchange, including options. The

Exchange filed Amendment No. 1 to

make clear that print advertisements are

also subject to prior Exchange review

and approval under the new proposed

language of PHLX Rule 605. The

Amendment changed the proposed new

language of the rule to reflect this

change. The text of the proposed rule

change, as amended, is below. Brackets

represent deletions; italics represent

additions.

Rule 605

Advertisements, Market Letters,

Research Reports and Sales Literature

(a) No member, foreign currency

option participant, member organization

or foreign currency option participant

organization shall issue any

advertisement, market letter, research

report, telemarketing script or sales

literature unless such member, foreign

currency option participant or a general

partner or holder of voting stock in such

organization shall have endorsed his

approval prior to publication or

distribution thereof on an exact copy

thereof bearing the name of the person

who wrote such material. Such copy so

endorsed shall be made part of the

permanent records of such member or

foreign currency option participant

organization and shall be retained for

three years, two years in an easily

accessible location.

(b) Member or foreign currency option

participant organizations for which the

Exchange is the designated examining

authority (‘‘DEA’’) desiring to broadcast

Exchange quotations on radio or

television programs, or in public

telephone market reports, or make use

of radio or television broadcast or print

advertising for any business purpose, or

to make use of the Internet for the

purpose of providing market quotations

or advertising to the general public must

first obtain the consent of the Exchange

by submitting an outline of the program

material to the Exchange.

(c) The text of all commercials,

advertisements and program material

(except lists of market quotations) about

securities or investing sponsored by

Exchange designated member or foreign

currency option participant

organizations on radio, television, or

public telephone reports, or on the

Internet, or program material supplied

to these media must be sent to the

Exchange promptly following the

program in which it is used.

[Commentary: The provisions of this

rule do not apply to advertisements,

market letters and sales literature

relating to options as defined in Rule

1049.]

Supplementary Material: No change.