Federal Register / Vol. 65, No. 185 / Friday, September 22, 2000 / Notices 57419

30Cf. CBOE Rule 6.61, Interp. & Policy .01.

31Commentary .02 provides: ‘‘An open exercise

position shall include any position with respect to

which the Options Clearing Corporation has

assigned an exercise notice to the member

organization and the member organization has not

delivered the shares of the underlying stock in

accordance with the Rules of the Options Clearing

Corporation and these Rules.’’ Commentary .03

provides: ‘‘All such reports shall be delivered to the

Department of Member Organizations of the

Exchange.’’ The Exchange does not believe that a

specific department needs to be identified in this

rule and, in any event, member firms are currently

on notice that such reports must be filed with the

Department of Options Surveillance.

32 15 U.S.C. 78f(b).

33 In approving this rule, the Commission has

considered the proposed rule’s impact on

efficiency, competition, and capital formation. 15

U.S.C. 78c(f).

34 15 U.S.C. 78s(b)(2).

35 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

uncompared trade so that it will be the

opening price on the business day

following the trade date. Currently, the

basis is the lesser of either the opening

price on the business day following the

trade date or the price at which the

uncompared trade was closed. After

careful consideration and review of this

proposal by Exchange members and

member firms, the Exchange proposes

this change in an effort to simplify and

make uniform the administration of

pricing uncompared trades.30 The

proposal also would require that notice

of uncompared trades must be provided

no later than the scheduled

commencement of trading (unless a

floor official directs otherwise). The

Exchange believes that the current time

requirement—15 minutes from the

scheduled commencement of trading—

is overly flexible.

I. Reports of Open Exercise Positions

The proposal would clarify and

simplify PCX Rule 6.27, which currently

requires member organizations to file

certain reports on open positions with

the Exchange. The proposed rule change

would include the last sentence of PCX

Rule 6.27, the text of commentary .01 to

that rule, and eliminate commentaries

.01, .02 and .03.31 As amended, PCX

Rule 6.27 would provide that the

Exchange may require each member

organization to file with the Exchange a

report, as of the 15th of each month, of

all open positions resulting from the

exercise of options contracts in accounts

carried by a member organization. It

would then incorporate current

Commentary .01 into the rule by adding

that such reports, when required, must

be filed no later than the second

business day following the day as of

which the report is made.

J. Fast Markets

The proposal would change PCX Rule

6.28 by redesignating OFPA G–9 as

paragraph (b) of PCX Rule 6.28.

Currently, OFPA G–9 lists procedures

that become effective in a fast market

situation. The Exchange proposes this

change to simplify and consolidate rules

relating to fast market and unusual

market conditions. In addition, the

proposal adds as paragraph (b)(5) a

cross-reference to the current

requirement that market makers have

under Rule 6.37(f) to trade a minimum

of one contract based on quoted markets

during fast markets. The proposal would

specify in new paragraph (b)(6) that

regular trading procedures will be

resumed when two floor officials

determine that the conditions

supporting the fast market no longer

exist. Finally, it would remove, as

unnecessary, the current provision

allowing floor officials to assign

brokerage responsibilities for particular

series to specific floor brokers in the

trading crowd during fast markets.

III. Discussion

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, and in particular, with the

requirements of Section 6(b).32 The

proposal would modify certain rules

relating to options trading on the PCX

by clarifying existing provisions,

eliminating unnecessary provisions, and

codifying current policies and

procedures. By clarifying and updating

its rules and obligations for market

participants, the Commission believes

the proposal is consistent with the Act

and will promote just and equitable

principles of trade, foster cooperation

and coordination with persons engaged

in regulating, clearing, settling,

processing information with respect to,

and facilitating transactions in

securities, and protect investors and the

public interest.33

IV. Conclusion

It Is Therefore Ordered, pursuant to

section 19(b)(2) of the Act,34 that the

proposed rule change (SR–PCX–99–36),

as amended, is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.35

Margaret H. McFarland,

Deputy Secretary

[FR Doc. 00–24353 Filed 9–21–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43292; File No. SR–Phlx–

00–74]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.

Relating to the Exchange’s Liability in

Connection With the Administration of

Its Proprietary Indices

September 14, 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 August 4,

2000, 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 Phlx. 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

The Exchange proposes to amend

Phlx Rule 1102A, Limitation of

Exchange Liability, to add to the

limitation of the Exchange’s liability, in

connection with its administration of

Phlx proprietary indexes, negligent acts

or omissions. Below is the text of the

proposed rule change. Additions are

italicized; deletions are in brackets.

Rule 1102A Limitation of Exchange

Liability

Neither the Exchange, the Reporting

Authority nor any agent of the Exchange

shall have any liability for damages, claims,

losses or expenses caused by any errors,

omissions, or delays in calculating or

disseminating the current index value or the

closing index value resulting from any

negligent act or omission by the Exchange or

any [an] act, condition or cause beyond the

reasonable control of the Exchange,

including, but not limited to, an act of God;

fire; flood; extraordinary weather conditions;

war; insurrection; riot; strike; accident; action

of government; communications or power

failure; equipment or software malfunction;

any error, omission or delay in the reports of

transactions in one or more underlying

securities; or any error, omission or delay in

the reports of the current index value or the

closing index value by the Exchange or the

Reporting Authority.

57420 Federal Register / Vol. 65, No. 185 / Friday, September 22, 2000 / Notices

3The Exchange’s proprietary indices currently

include: Computer Box Maker Index (BMX), Phlx

Oil Service Index (OSX), Gold-Silver Index (XAU),

National Over-the-Counter Index (XOC), Phlx Forest

and Paper Products Sector Index (FPP), Over-theCounter Prime Index (OTC), Utility Index (UTY),

Semiconductor Index (SOX), TheStreet.com

Internet Sector Index (DOT) and Wireless Telecom

Sector Index (YLS).

4See Amex Rule 902C.

5 15 U.S.C. 78f(b)(5). 6 17 CFR 200.30–3(a)(12).

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

Phlx included statements concerning

the purpose of, 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 examined at the places specified

in Item IV below. The Phlx 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 purpose of the proposed rule

change is to expand the limitation of the

Exchange’s liability in connection with

its administration of Phlx proprietary

indices. The Exchange currently lists

and trades options on a number of

proprietary indices, and new indices

continue to be developed from time to

time.3 There is a great deal of work

involved in the daily calculation and

dissemination of these indices. While

much of such work is automated,

manual input is still required. Thus, the

potential for human error exists which

exposes the Exchange to a risk of

liability. Potential human errors include

inputting a symbol or index value

incorrectly or missing a corporate action

that has an effect on the index.

Currently Phlx Rule 1102A disclaims

Exchange liability for damages caused

by errors, omissions or delays in the

calculation or dissemination of any

index value resulting from any conduct

beyond the reasonable control of the

Exchange. This includes an act of God,

a power failure, or any error, omission

or delay in the reported price of the

underlying security. However, these

disclaimer provisions are arguably

ambiguous with respect to whether the

Exchange remains potentially liable for

damages caused by any human error or

omission by an Exchange employee in

connection with the performance of the

Exchange’s index responsibilities. The

proposed amendment to Phlx Rule

1102A would make clear that the

Exchange disclaims liability for

negligent conduct, in addition to

conduct beyond the Exchange’s

reasonable control, currently covered by

Phlx Rule 1102A. Other exchanges,

including the American Stock Exchange

(‘‘Amex’’),4 disclaim liability for

negligent conduct in connection with

their index operations. Further, the

Exchange acknowledges that Phlx Rule

1102A cannot be relied upon by the

Exchange to limit its liability to nonmembers or for any intentional or

negligent violation of federal securities

laws.

2. Statutory Basis

For these reasons, the proposed rule

change is consistent with Section 8 of

the Act in general, and with section

6(b)(5) 5 of the Act specifically, in that

it is designed to perfect the mechanisms

of a free and open market and a national

market system, to promote just and

equitable principles of trade, and to

protect investors and the public interest,

by defining the scope of the Exchange’s

liability, thereby, putting investors on

notice that the Exchange is not liable for

negligent conduct in connection with its

administration of Phlx proprietary

indices, in addition to conduct beyond

the Exchange’s reasonable control,

currently covered by Rule 1102A.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Phlx 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

No written comments were solicited

or received with respect to the proposed

rule change.

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 longer 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 consists, the Commission

will:

(A) By order approve such proposed

rule change, or

(B) Institute proceedings to determine

whether the proposed rule change

should be disapproved.

IV. Solicitation of Comments

The Commission invites interested

persons 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 in

the Commission’s Public Reference

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the Phlx. All

submissions should refer to File No.

SR–Phlx–00–74 and should be

submitted by October 13, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–24352 Filed 9–21–00; 8:45 am]

BILLING CODE 8010–01–M

SOCIAL SECURITY ADMINISTRATION

Ticket to Work and Work Incentives

Advisory Panel Meeting

AGENCY: Social Security Administration

(SSA).

ACTION: Notice of meeting cancellation.

DATES: September 26–27, 9 a.m.–5 p.m.

ADDRESSES: Embassy Suites Hotel, 1900

Diagonal Road, Alexandria VA 22314,

703–684–5900.

SUPPLEMENTARY INFORMATION: Meeting

Cancelled: In accordance with section

10(a)(2) of the Federal Advisory

Committee Act, SSA announced a

meeting of the Ticket to Work and Work

Incentives Advisory Panel (the Panel).

The Ticket to Work and Work

Incentives Improvement Act of 1999

(TWWIIA), Public Law 106–170,

establishes the Panel to advise the

Commissioner of Social Security, the

President and the Congress on issues

related to work incentives programs,

planning and assistance for individuals