59488 Federal Register / Vol. 65, No. 194 / Thursday, October 5, 2000 / Notices

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

6 15 U.S.C. 78s(b)(3)(A)(i).

7 17 CFR 240.19b–4(f)(1).

8 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

BBO, i.e., orders may be executed at

prices that may be multiple trading

increments better than the PCX’s thenprevailing BBO. Furthermore, LMMs

may execute improved prices regardless

of whether the NBBO is locked or

crossed. Auto-Ex prevents inbound

orders from being executed at prices

inferior to the NBBO. Pursuant to PCX

Rule 6.87, only non-broker-dealer

customer orders are eligible to be

executed by Auto-Ex. The PCX

designates the eligible order size, which

may be between 20 and 50 option

contracts, on an issue-by-issue basis.

c. Hand-Held Terminals. Member

firms may electronically route orders to

the PCX via the floor broker hand-held

terminal system pursuant to PCX Rule

6.88. The system allows member firms

to route their orders directly to POETS,

to a member firm booth on the trading

floor, or to a floor broker who is

operating a hand-held terminal located

in a trading crowd (or elsewhere) on the

options floor. Accordingly, orders sent

through MFI may be transmitted to a

floor broker almost instantaneously for

immediate representation in the trading

crowd. In the event that option prices

have changed to make an order

immediately executable, the floor broker

can submit the order to POETS for

automatic execution (subject to the

Exchange’s order size requirements).

The Exchange notes that the Report uses

an extreme measurement standard—the

NBBO at the time an order reaches the

Exchange. Consequently, the Exchange

believes that the reporting process may

be subject to some positive or negative

price movement. This will occur, for

example, if there are changes in the

price of the underlying security or there

are other orders reaching the trading

crowd between the time the original

order reaches the trading floor and the

time it is executed.

d. AOR. Option orders executed at the

opening of trading are eligible for

execution via the Exchange’s Automated

Opening Rotation (‘‘AOR’’). The AOR

permits the Exchange to establish

electronically, for eligible option series,

a single price opening for executing

eligible market and marketable limit

orders in the POETS system. Under

AOR, various series in an option issue

may be opened simultaneously, so that

orders in POETS in that issue are

executed within seconds. Once the

market in an underlying stock has

opened, the PCX can open the market in

the overlying option almost

simultaneously. AOR also allows

automated openings when trading in an

issue has been halted and then

reopened.

The PCX represents that the PACEX

Reporting program is designed to

provide member firms with greater

assurance that they have acted in a

manner consistent with the fulfillment

of their duty of best execution when

they direct orders to the PCX.

Accordingly, the Exchange believes that

the proposed rule change is consistent

with and in furtherance of the objectives

of the Act, including specifically

Section 6(b)(5) thereof,5 which requires

that the rules of exchanges promote just

and equitable principles of trade,

remove impediments to and perfect the

mechanism of a free and open market

and a national market system, and

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 will impose

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

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

Because the PCX has designated this

proposed rule change as constituting a

stated policy, practice, or interpretation

with respect to the meaning,

administration, or enforcement of

existing Exchange rules and procedures,

it has become effective pursuant to

Section 19(b)(3)(A)(i) of the Act6 and

Rule 19b–4(f)(1) thereunder. 7 At any

time within 60 days of the filing of this

proposed rule change, the Commission

may summarily abrogate the rule change

if it appears to the Commission that the

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,

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, N.W.,

Washington, D.C. 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 the 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–00–31 and should be

submitted by October 26, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–25597 Filed 10–4–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43376; File No. SR–Phlx–

00–79]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Philadelphia Stock Exchange, Inc.

Relating to the Prohibition on the Entry

of Certain Electronically Generated

Orders into the Exchange’s AUTOM

System

September 28, 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

September 15, 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 Exchange. The

Commission is publishing this notice to

solicit comment on the proposed rule

change.

Federal Register / Vol. 65, No. 194 / Thursday, October 5, 2000 / Notices 59489

3AUTOM is the Exchange’s electronic order

delivery and reporting system, which provides for

the automatic entry and routing of equity option

and index option orders to the Exchange trading

floor. Orders delivered through AUTOM may be

executed manually, or certain orders are eligible for

AUTOM’s automatic execution feature, AUTO–X.

Equity option and index option specialists are

required by the Exchange to participate in AUTOM

and its features and enhancements. Option orders

entered by Exchange members into AUTOM are

routed to the appropriate specialist unit on the

Exchange trading floor.

4AUTO–X is the automatic execution feature of

the AUTOM system.

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

6 15 U.S.C. 78f(b)(5).

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Phlx proposes to amend

Exchange Rule 1080, Philadelphia Stock

Exchange Automated Options Market

(‘‘AUTOM’’) and Automatic Execution

System (‘‘AUTO–X’’), by adopting

paragraph (i), which would restrict the

entry of certain options orders that are

created and communicated

electronically, without manual input,

into the Exchange’s AUTOM system.

The text of the proposed rule change is

available at the Office of the Secretary,

the Exchange, 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

Exchange 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

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

The Phlx proposes to adopt new

section (i) to its Rule 1080, governing

the entry of certain options orders that

are created and communicated

electronically, without manual input,

into AUTOM.3 Proposed Phlx Rule

1080(i) would provide that members

may not enter nor permit or facilitate

the entry of orders into AUTOM if those

orders are created and communicated

electronically without manual input and

if such orders are eligible for execution

via AUTO–X 4 at the time they are

received. To be permitted under the

Rule, order entry by public customers or

associated persons of members must

involve manual input, such as entering

the terms of an order into an order-entry

screen or manually selecting a displayed

order against which an off-setting order

should be sent. The proposed rule states

that members are not prohibited from

electronically communicating to the

Exchange orders manually entered by

customers into front-end

communications systems, such as

Internet gateways and online networks.

The proposed rule clarifies that an

order is eligible for execution via

AUTO–X if: (1) Its size is equal to or less

than the maximum AUTO–X order size

for the particular series; (2) the order is

marketable at the time it is received; and

(3) the order either has no contingency

or has a contingency that is accepted for

execution by the AUTOM system. As

defined in the proposed rule, a

marketable order is a market order or a

limit order where the specified price to

sell is below or at the current bid, or the

specified price to buy is above or at the

current offer.

The Exchange believes that the

proposed rule change will permit

specialists and Registered Options

Traders (‘‘ROTs’’) to compete more

effectively with customers who are

equipped with electronic systems. The

Phlx represents that its business model

depends on specialists and ROTs to

maintain fair and orderly markets and

depends on specialists and market

makers for competition and liquidity.

Public customer orders on the Phlx are

provided with certain benefits pursuant

to various rules of the Exchange,

including Phlx Rule 1080 (Philadelphia

Stock Exchange Automated Options

Market (AUTOM) and Automatic

Execution System (AUTO–X), Phlx Rule

1014 (Obligations and Restrictions

Applicable to Specialists and Registered

Options Traders), Phlx Rule 1015

(Quotation Guarantees), and Options

Floor Procedure Advice A–11

(Responsibility to Make Ten-Up

Markets). Allowing electronically

generated and communicated customer

orders to be routed directly to AUTOM

and AUTO–X would give customers

with such electronic systems a

significant advantage over specialists

and ROTs. The Exchange believes that

this could undercut its business model,

which is dependent on specialists and

ROTs for competition and liquidity. The

Phlx notes that under the proposed rule

change, computer generated orders can

still be sent for execution on the

Exchange; however, they may not be

sent for execution through AUTOM and

AUTO–X.

Currently, Phlx member firms and

customers who are not located on the

trading floor may send option orders to

the trading floor in various ways. First,

a member firm representative or a

customer may telephone an order to a

Floor Broker member firm booth on the

trading floor. From that point the order

may be taken manually to the proper

specialist post and trading crowd and

represented; alternatively, it may be sent

electronically from the Floor Broker

booth via the Exchange’s Floor Broker

Order Entry System. A member firm

may also send an order to the Exchange

through its interface with AUTOM.

Eligible orders sent through AUTOM

may be: (1) Placed on the limit order

book; (2) automatically executed via

AUTO–X; or (3) executed manually by

the specialist and the trading crowd.

Under the proposed rule change,

electronically generated and

communicated orders that are eligible

for execution via AUTO–X at the time

they are received would be ineligible for

routing through AUTOM. These orders

could, however, be sent to the trading

floor for execution as otherwise

described above, i.e., by telephone or

through a member firm’s proprietary

order routing system.

2. Statutory Basis

The Phlx believes that the restriction

of the entry of certain options orders

that are created and communicated

electronically, without manual input,

into AUTOM will ensure that Exchange

specialists maintain fair and orderly

markets and will enable them to

continue to provide competition and

liquidity in the options markets. The

Phlx therefore represents that the

proposed rule change is consistent with

Section 6(b) of the Act 5 in general and

furthers the objectives of Section

6(b)(5) 6 in particular in that it is

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 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

The Exchange has neither solicited

nor received comments on the proposed

rule change.

59490 Federal Register / Vol. 65, No. 194 / Thursday, October 5, 2000 / Notices

7 15 U.S.C. 78s(b)(3)(A).

8 17 CFR 240.19b–4(f)(6).

9 Id.

10 Id.

11 17 CFR 240.19b–4(f)(6)(iii).

12See Securities Exchange Act Release No. 43285

(September 12, 2000), 65 FR 56972 (September 20,

2000) (order approving CBOE Rule 6.8A, File No.

SR–CBOE–00–01).

13See Securities Exchange Act Release No. 43285

(September 12, 2000), 65 FR 56972 (September 20,

2000) (order approving CBOE Rule 6.8A, File No.

SR–CBOE–00–01) and Securities Exchange Act

Release No. 42455 (February 24, 2000), 65 FR 11401

(March 2, 2000) (order approving International

Stock Exchange LLC Rule 717(f)).

14 15 U.S.C. 78s(b).

15For 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).

16 17 CFR 200.30–3(a)(12).

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change has become

effective pursuant to Section 19(b)(3)(A)

of the Act 7 and Rule 19b–4(f)(6) 8

thereunder because the proposal: (1)

Does not significantly affect the

protection of investors or the public

interest; (2) does not impose any

significant burden on competition; and

(3) does not become operative prior to

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. In addition, the Exchange

provided the Commission with 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 the proposed

rule change as required by Rule 19b–

4(f)(6).9

A proposed rule change filed under

Rule 19b–4(f)(6) 10 normally does not

become operative prior to 30 days after

the date of filing. Rule 19b–4(f)(6)(iii),11

however, permits the Commission to

designate such shorter time if such

action is consistent with the protection

of investors and the public interest. The

Exchange has requested that the

Commission designate such shorter time

period so that the proposed rule change

may become operative immediately

upon filing. The immediate

effectiveness would allow the Exchange

to promptly implement the rule change

concurrently with new Chicago Board

Options Exchange to promptly

implement the rule change concurrently

with new Chicago Board Options

Exchange, Inc. (‘‘CBOE’’) Rule 6.8A.

CBOE Rule 6.8A restricts the entry of

certain options orders that are created

and communicated electronically,

without manual input, into the CBOE’s

Order Routing System.12

The Commission, consistent with the

protection of investors and the public

interest, has determined to make the

proposed rule change operative

immediately upon filing for the

following reasons. Specifically, the

Commission previously approved

similar proposals by two other

exchanges.13 The Commission notes

that the proposed rule change concerns

issues that have previously been the

subject of a full comment period

pursuant to Section 19(b) of the Act,14

and the Commission does not believe

that the proposed rule change raises any

new regulatory issues.

Based on the above reasons, the

Commission believes it is consistent

with the protection of investors and the

public interest that the proposed rule

change become operative immediately

upon the date of filing, September 15,

2000. 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.15

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 at

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 File No.

SR–Phlx–00–79 and should be

submitted by October 26, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.16

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–25593 Filed 10–4–00; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF STATE

[Public Notice 3427]

Bureau of Educational and Cultural

Affairs; Fulbright American Studies

Institutes for Foreign University

Faculty

NOTICE: Request for Proposals (RFP).

SUMMARY: The Study of the U.S. Branch,

Office of Academic Exchange Programs,

Bureau of Educational and Cultural

Affairs, announces an open competition

for four (4) assistance awards. Public

and private non-profit organizations

meeting the provisions described in IRS

regulation 26 CFR 1.501(C) may apply to

develop and implement one of the

following four post-graduate level

American Studies programs designed

for multinational groups of 18 to 30

experienced foreign university faculty

and educators:

1. The Civilization of the United

States—An Introduction

2. U.S. Foreign Policy: Foundations

and Formulation

3. The U.S. Constitution: Origins,

Evolution and Contemporary Issues

4. American Studies for Foreign

Secondary School Educators

These programs are intended to

provide participants with a deeper

understanding of American life and

institutions, past and present, in order

to strengthen curricula and to improve

the quality of teaching about the United

States at universities abroad.

Programs are six weeks in length and

will be conducted during the Summer of

2001.

The Bureau is seeking detailed

proposals from colleges, universities,

consortia of colleges and universities,

and other not-for-profit academic

organizations that have an established

reputation in one or more of the

following fields: political science,

international relations, law, history,

sociology, literature, American studies,

and/or other disciplines or subdisciplines related to the program

theme.

Applicant institutions must

demonstrate expertise in conducting

post-graduate programs for foreign

educators, and must have a minimum of

four years experience in conducting

international exchange programs.