Federal Register / Vol. 65, No. 198 / Thursday, October 12, 2000 / Notices 60711

Section 10–9(b) (authorizing the Exchange’s Audit

Committee to conduct reviews of any alleged

improper conduct and recommend appropriate

action to the Board).

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 240.19b–4.

IV. Conclusion

For the reasons discussed above, the

Commission finds that the proposal is

consistent with the Act and the rules

and regulations thereunder.

It is therefore ordered, pursuant to

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

proposed rule change, SR–Phlx–00–39,

be and hereby is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.13

Margaret H. McFarland,

Depyty Secretary.

[FR Doc. 00–26111 Filed 10–11–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43407; File No. SR–Phlx–

00–072]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.

Amending Rules 501, 505, and 506

Regarding Allocation and Specialist

Appointment, as well as Rule 748,

Supervision, To Reflect Current

Circumstances on the Equity Foreign

Currency Option and Option Trading

Floors

October 3, 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 July 25,

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 Phlx proposes to amend Rules

501, 505, 506, and 748 to require certain

information be provided to the

Allocation, Evaluation and Securities

Committee (‘‘AES Committee’’) for

approval and to require certain

minimum staffing levels for specialist

units. Specifically, the Exchange

proposes to amend Rule 501(b)(4) to

require that option and foreign currency

option specialist units provide detailed

information on their application to

become a specialist unit regarding their

back-up arrangements with regard to

financial and staffing support.

The proposal would add Rule 501(c)

to require that individuals be approved

by the AES Committee prior to acting as

a specialist on behalf of a specialist unit.

In addition, proposed Rule 501(c) would

require that applications for individuals

to act as specialist shall include any

other special requirements that the AES

Committee may require for approval.

Proposed Rule 501(c) would also require

that the AES Committee or its designee

approve an individual prior to that

individual moving from one specialist

unit to another specialist unit.

The proposal would re-designate Rule

501(c) as Rule 501(d), which requires

that to be approved and retain their

specialist privileges, option and foreign

currency option specialists must

maintain the clearing arrangements and

capital structure stated on their

application. In addition, Rule 501(d)

would require that changes regarding

their back-up arrangements must be

submitted to and approved by the AES

Committee. The proposal would also

amend Rule 501(d) to require option

and foreign currency option specialists

to maintain a minimum staffing level for

each quarter turret of space on the

trading floor.

The proposal would add Rule 501(e),

which is similar to Rule 501(d), and

would contain the same staffing

requirements for equity specialists as

are currently contained in Rule

501(c)(2).

The proposal would re-designate Rule

501(d) as Rule 501(f). The proposal

would amend the language of 501(f) to

state that once an applicant is approved

by the AES Committee as a specialist

unit, any material change in the capital

or staff of the unit or any move by the

head or assistant specialist must be

reported in writing to the AES

Committee within two days of the

change.

The proposal would add Rule 501,

Commentary .02, which states that for

purposes of rule 748 on Supervision,

individuals employed or associated

with the back-up specialist will be

considered engaging in a business

activity of the specialist unit that they

are assisting. Rule 748(b) would also be

amended to refer to this situation.

The proposal would amend Rule 505

to require registrant specialist units to

report material changes on the

respective equity, option and foreign

currency option registration forms to the

AES Committee.

The proposal would amend Rule 506

to codify expressly that AES Committee

may require applicant specialist units to

provide other information, including

system order acceptance and execution

levels, and guarantees on the

application for a particular equity or

option. The proposal would require

that, should a specialist be allocated

that equity or option, the specialist

would be immediately required to notify

the Exchange staff and submit for

approval to the AES Committee or its

designee in writing any change to the

respective system acceptance and

execution levels or any other material

changes on that application.

The proposal would replace

references to the Department of

Securities in Rules 505 and 506 with

references to the Exchange staff. The

text of the proposed rule change is

available at the Phlx and the

Commission.

II. Self-Regulatory Organization’s

Statements of the Purpose of, and the

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 section A, B, and

C below, of the most significant aspects

of such statements.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and the

Statutory Basis for, the Proposed Rule

Change

1. Purpose

The purpose of the proposed rule

change is to provide the AES Committee

with the appropriate information and a

greater understanding of the specialist

unit’s operation when approving a

prospective specialist unit for trading

privileges, as well as approving the

allocation, reallocation and transfer of

equity, option, and foreign currency

option books to specialist units.

Specifically, proposed amendments to

Rule 501(b)(4) regarding back-up

arrangements for staffing and capital are

intended to help ensure that specialist

books will continue to trade on the floor

in an efficient manner by requiring the

specialist unit have sufficient staff to

handle the high volume in busy markets

and requiring the back-up specialist to

60712 Federal Register / Vol. 65, No. 198 / Thursday, October 12, 2000 / Notices

3See supra text discussing proposed Rule 501(d)

and (e), proposed Rule 506(e) and the proposed

amendments to Rule 505, pp 2–3.

4 15 U.S.C. 78f(b).

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

step in to act as a specialist, when the

assigned specialist is unable to do so.

Proposed Rule 501(c) should increase

the AES Committee’s supervision over

the individuals applying to be a

specialist on the floor, which should in

turn help to ensure that applicants have

sufficient qualifications and experience

to perform the duties of a specialist in

active markets. In addition, proposed

Rule 501(c) should also help to ensure

that the AES Committee is notified in

the event that an individual moves from

one firm to another firm.

Proposed amendments to Rule 501(d)

would require option and foreign

currency option specialist units to have

certain staffing levels per quarter turret

of trading floor space, rather than for the

entire specialist unit, to help to ensure

adequate staffing coverage on the

trading floors. The current rule does not

sufficiently address these issues because

it lacks detail on how the specialist staff

is deployed, particularly when the

specialist unit may have books located

in different areas of the option or foreign

currency option floor.

With respect to proposed

amendments to Rule 506, the AES

Committee may require additional

information on the allocation

application, such as system acceptance

and execution levels. The Phlx believes

that system acceptance and execution

levels are important in attracting order

flow to the Exchange and providing

customers with efficient order delivery

and execution. The Phlx believes that

codifying expressly in Exchange rules

the AES Committee’s authority to

require specialist units to state their

system order acceptance and execution

levels, as well as notifying the AES

Committee of such changes, should help

the AES Committee to accurately assess

whether the specialist units have the

ability to attract order flow to the

Exchange and can keep that order flow

with the maintenance of the delivery

and execution levels stated in their

application.

The proposal would require Rule 501,

Commentary .02 and proposed

amendments to Rule 748 to specifically

delegate responsibility for supervision

of back-up staff used by a specialist to

the specialist utilizing the back-up staff.

The Phlx believes that this is the most

efficient method of holding a specialist

unit accountable for the acts of staff

under their direction, albeit such staff is

not directly employed by that specialist

unit.

The proposal would also require that

equity, option and foreign currency

option specialists notify the AES

Committee of material changes in their

registration and application forms for

specific securities as well as their

applications to be a specialist unit.3

This should supply the Phlx and the

AES Committee with the appropriate

information to make determinations

regarding the suitability of this

specialist to perform in a particular

security in accordance with the AES

Committee’s review procedures for

specialist performance evaluations

outlined in Rule 511.

2. Statutory Basis

The Phlx believes the proposed rule

change is consistent with Section 6(b) of

the Act 4 in general, and in particular,

with Section 6(b)(5) of the Act,5 in that

it is designed to promote just and

equitable principles of trade, prevent

fraudulent and manipulative acts and

practices, facilitate transactions in

securities, remove impediments to and

perfect the mechanism of a free and

open market and a national market

system, as well as to protect investors

and the public interest by better

assessing that specialist units have the

appropriate staffing. In addition, the

proposed amendments and rules should

help to ensure that the AES Committee

has suitable information to make wellreasoned decisions regarding allocation,

reallocation, and transfer of specialist

books as well as the approval and

retention of high quality specialists on

the trading floor.

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

The Phlx has neither solicited nor

received written comments on the

proposed rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of the publication of

this notice in the Federal Register or

within such other 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 Phlx consents, the

Commission will:

(A) By order approve the proposed

rule change, or

(B) Institute proceedings to determine

whether the proposed rule change

should be disapproved.

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 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–00–72 and should be

submitted by November 2, 2000.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–26115 Filed 10–11–00; 8:45 am]

BILLING CODE 8010–01–M

SOCIAL SECURITY ADMINISTRATION

Privacy Act of 1974, As Amended;

Computer Matching Program (SSA/

Department of Labor (DOL))—Match

Number 1003

AGENCY: Social Security Administration

(SSA).

ACTION: Notice of computer matching

program.

SUMMARY: In accordance with the

provisions of the Privacy Act, as

amended, this notice announces a

computer matching program that SSA

plans to conduct with DOL.

DATES: SSA will file a report of the

subject matching program with the

Committee on Governmental Affairs of

the Senate, the Committee on

Government Reform and Oversight of