[Federal Register Volume 65, Number 233 (Monday, December 4, 2000)]
[Notices]
[Pages 75754-75755]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-30720]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43619; File No. SR-PCX-00-44]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc. 
Relating to Committee Voting Requirements

November 27, 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 November 20, 2000, the Pacific Exchange, Inc. (``PCX'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``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 comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The PCX is proposing to amend PCX Rule 11.2(a) to replace the word 
``present'' with the word ``voting'' to allow committee action to be 
approved by a majority of those voting at a meeting at which a quorum 
has been established. Below is the complete text of the proposed rule 
change. Proposed new text is in italics. Proposed deletions are in 
[brackets].
* * * * *

Pacific Exchange, Inc.

Constitution and Rules

* * * * *

Rule 11

Committees of the Exchange

para.6233  Committee Procedures

    Rule 11.2(a). Except as otherwise provided in the Constitution, the 
Rules, or a resolution of the Board, each committee shall determine its 
own time and manner of conducting its meetings. The vote of a majority 
of the members of a committee [present] voting at a meeting at which a 
quorum is present shall be the act of the committee. Committees may act 
by written consent of a majority of the members of the committee.
    (b) No change.
* * * * *

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
    Currently, the PCX's Board of Governors and the Exchange's standing 
committees operate under different voting standards. The voting 
standard applied to committees is more restrictive than that applied to 
the Board of Governors. The standard for committee voting is set by PCX 
Rule 11.2(a) which states that ``the vote of a majority of the members 
of a committee present at a meeting at which a quorum is present shall 
be the act of the committee.'' This differs from the voting requirement 
for the Board of Governors which may act upon the affirmative vote of 
``not less than a majority of the Governors voting at a meeting at 
which a quorum is present * * *'' \3\ This section allows the Board of 
Governors to act on the majority vote of the Governors voting, 
regardless of whether the number of Governors recusing or abstaining 
reduces the number of those eligible to vote below a quorum, below a 
majority of the Governors attending or below a majority of the total 
number of Governors on the Board.
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    \3\ PCX Constitution, Article II, Section 1(a).
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    Unlike Section 1(a), PCX Rule 11.2(a) requires a vote of a majority 
of committee members present at the meeting, rather than a mere 
majority of those voting. The PCX believes that Rule 11.2(a) should be 
amended to make it consistent with the requirements set forth for the 
PCX Board of Governors. Recent changes in the ownership of, or capital 
investment in, many PCX member firms has increased the number of 
instances in which committee members must abstain or recuse from a 
committee vote. This may delay or preclude a committee from taking 
action, thereby reducing the responsiveness of a committee to rapidly 
changing market conditions and limiting overall committee 
effectiveness.
    The proposed rule change conforms the committee voting standard to 
that applied to the PCX Board of Governors. The rule change will allow 
for greater committee responsiveness, improved timing for committee 
actions, and consistency across the Exchange with respect to rules of 
order.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6 of the Act, \4\ in general, and furthers the objectives 
of Section

[[Page 75755]]

6(b)(5) \5\, in particular, in that it is designed to promote just and 
equitable principles of trade.
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(5).
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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

    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 foregoing rule change has become effective pursuant to section 
19(b)(3)(A) \6\ of the Securities Exchange Act of 1934 and subparagraph 
(f)(3) of Securities Exchange Act Rule 19b-4 thereunder \7\ because it 
is concerned solely with the administration of the Exchange. At any 
time within 60 days of this filing, the Commission may summarily 
abrogate this 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.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(3).
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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, 450 Fifth Street, NW., Washington, 
DC. 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-00-44 and should be submitted by December 26, 
2000.
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    \8\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-30720 Filed 12-1-00; 8:45 am]
BILLING CODE 8010-01-M