Federal Register / Vol. 65, No. 225 / Tuesday, November 21, 2000 / Notices 69979

9 15 U.S.C. 78f(b)(5).

10 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3Letter from Hassan Abedi, Attorney, Regulatory

Policy, PCX, to Nancy Sanow, Assistant Director,

Division of Market Regulation (‘‘Division’’),

Commission, dated July 31, 2000 (‘‘Amendment No.

1’’). Amendment No. 1 deletes the language of PCX

Rule 6.55 and Commentary .01 thereunder, that sets

forth special reporting requirements for highest bids

and lowest offers comprised of more than 25

options contracts.

4Letter from Hassan Abedi, Attorney, Regulatory

Policy, PCX, to Nancy Sanow, Assistant Director,

Division, Commission, dated September 29, 2000

(‘‘Amendment No. 2’’). Amendment No. 2 revises

Rule 6.55 to clarify that ‘‘immediately’’ means as

soon as practicable after receipt, which under

normal market conditions means no later than 30

seconds. 5See Amendment No. 1, supra note 3.

improvement process that the Exchange

believes is encouraged by this rule.

To permit the Floor Broker who is not

a nominee of the originating firm to

solicit orders that will receive the

benefit of the cross participation

entitlement, the Exchange is proposing

to delete the phrase that states that the

order must be ‘‘from the same firm from

which the original order originated

(‘originating firm’).’’

2. Statutory Basis

The Exchange believes that the

proposed rule change is consistent with

and furthers the objectives of section

6(b)(5) 9 of the Act in that it is designed

to remove impediments to a free and

open market and protecting investors

and the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The CBOE 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 CBOE consents, 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

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 the filing will also be

available for inspection and copying at

the principal offices of the CBOE. All

submissions should refer to File No.

SR–CBOE–00–43 and should be

submitted by December 12, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.10

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–29707 Filed 11–20–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43550; File No. SR–PCX–

00–15]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change and

Amendments No. 1 and 2 Thereto by

the Pacific Exchange, Inc. To Require

Immediate Display of Options Limit

Orders in the Option Limit Order Book

November 13, 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 June 14,

2000, the Pacific Exchange, Inc. (‘‘PCX’’

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 PCX

filed Amendment Nos. 1 3 and 2 4 to the

proposed rule change on August 1, 2000

and October 17, 2000, respectively. The

Commission is publishing this notice to

solicit comments on the proposed rule

change and Amendment Nos. 1 and 2

from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The PCX proposes to amend PCX Rule

6.55 to require Order Book Officials to

immediately display options limit

orders in the Options Limit Order Book.

As amended, the PCX proposal requires

Order Book Officials to immediately

display the highest bid and lowest

offers, along with the corresponding

number of options contracts bid or

offered in the book for which that

official acts as the Order Book Official.

Additionally, the proposed rule change

would delete the special requirements

contained in PCX Rule 6.55 and

Commentary .01 thereunder, that apply

to highest bids and lowest offers of more

than 25 options contracts.5

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

PCX 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 PCX 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 amend Exchange Rule 6.55

(‘‘Displaying Bids and Offers in the

Book’’) to require the immediate display

of options limit orders by Order Book

Officials. Currently, PCX Rule 6.55

requires an Order Book Official to

continuously display, in a visible

manner, the highest bid and lowest

offer, along with the corresponding

number of options contracts bid or

offered, in his book in each option

contract for which he is the Order Book

Official.

The Exchange represents that limit

orders are routed to an Order Book

Official either manually or

electronically. A manual order is sent to

an Order Book Officials by a floor

69980 Federal Register / Vol. 65, No. 225 / Tuesday, November 21, 2000 / Notices

6See PCX Rule 6.52, Commentary .04. Prior to

placing an order into the Order Book Official’s

custody, a Floor Broker must use due diligence in

handling that order. See generally, PCX Rule 6.46. 7OPRA disseminates the options exchanges’ best

bid and offering prices, but does not disseminate

the corresponding size of those markets. However,

the sizes of the best bid and offer in the book are

displayed on the overhead screens on the PCX floor,

subject to certain conditions. See PCX Rule 6.55. 8This process requires a member of the Order

Book Official’s staff to enter the order into the

system. 9See PCX Rule 6.55. 10See Amendment No. 2, supra note 4. 11See generally, Report Concerning Display of

Limit Orders, Office of Compliance, Inspections and

Examinations and Office of Economic Analysis,

Commission (May 4, 2000).

12The Exchange represents that, currently, no

PCX members operate any of the limit order books

on the PCX Options Floor. Therefore, initially, the

proposed change to PCX Rule 6.55 will apply only

to PCX staff. However, the Exchange anticipates

that in the future, PCX members may begin to

operate limit order books on the options floor, and

accordingly, the rule, as modified, will apply to

members. See Securities Exchange Act Release No.

41595 (July 2, 1999), 64 FR 38064 (July 14, 1999)

(order approving a PCX proposed rule change to

permit PCX members to operate limit order books)

(File No. SR–PCX–98–02).

13 15 U.S.C. 78f.

14 15 U.S.C. 78f(b)(5).

15 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

broker, who places a written, timestamped order ticket into the proper

receptacle at the trading post.6 An

electronic order is routed to the Order

Book Official when a member firm

places an order through the Exchange’s

Member Firm Interface to the Pacific

Options Exchange Trading System

(‘‘POETS’’). The order is then

electronically entered into the Order

Book Official’s book through the AutoBook function of POETS. Orders entered

electronically into the book that

improve the disseminated quote are

immediately displayed on the overhead

screens on the trading floor and are

disseminated to the public through the

Options Price Reporting Authority

(‘‘OPRA’’).7 However, orders entered

manually must be entered into the

POETS system before they can be

displayed on the floor or disseminated

through OPRA.8

PCX Rule 6.55 currently requires the

Order Book Official to continuously

display the best bid and offer ‘‘so far as

practicable.’’ 9 The Exchange believes

that the practicality requirement is no

longer appropriate. PCX Rule 6.55 was

codified before orders could be entered

electronically through POETS. Today,

only a small percentage of options

orders are routed to the Order Book

Officials manually. Accordingly, the

Exchange proposes to amend PCX Rule

6.55 to eliminate the practicability

requirement for the display of options

transactions and replace it with a

requirement that all orders must be

displayed ‘‘immediately.’’ The proposed

rule change defines the term

‘‘immediately’’ to mean as soon as

practicable after receipt, which under

normal market conditions means no

later than 30 seconds.10

In modifying this rule, the Exchange

is mindful of the importance of

immediately displaying limit orders that

represent the best bid and offer on the

Exchange. Indeed, the Exchange notes

that the Commission has recently

emphasized the critical importance of

improving industry practices relating to

the display of limit orders.11 In that

regard, the Exchange is modifying PCX

Rule 6.55 to help further this important

objective.12

2. Statutory Basis

The Exchange believes that the

proposed rule change is consistent with

the requirements of section 6 of the

Act,13 in general, and further the

objectives of section 6(b)(5) of the Act,14

in particular, in that it is designed to

prevent fraudulent and manipulative

acts and practices, promote just and

equitable principles of trade, foster

cooperation and coordination with

persons engaged in facilitating

transactions in securities, and remove

impediments to and perfect the

mechanism of a free and open market

and a national market system.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange believes that the

proposed rule change will not 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

The Exchange 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 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 Exchange 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, as amended, 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 submissions, 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 persons, 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–PCX–00–15 and should be

submitted by December 12, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.15

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–29708 Filed 11–20–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43547; File No. SR–Phlx–

00–95]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Philadelphia Stock Exchange, Inc.

Relating to Registration Fees for

Registered Representatives

November 13, 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 October

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 Exchange.

On November 2, 2000, the Phlx filed