[Federal Register Volume 63, Number 78 (Thursday, April 23, 1998)]
[Notices]
[Page 20238]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10751]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39882; File No. SR-Phlx-97-62]


Self-Regulatory Organizations; Order Granting Approval of 
Proposed Rule Change by the Philadelphia Stock Exchange, Inc., To Amend 
its By-Law Article X, Sections 10-16, 10-17 and 10-19 To Require That 
Each of its Trading Floor Committees Consult With Its Corresponding 
Quality of Markets Committee on All Matters of Policy and All Matters 
That Are To Be Presented to the Board

April 17, 1998.

I. Introduction

    On December 29, 1997, the Philadelphia Stock Exchange, Inc. 
(``Phlx'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') a proposed rule change pursuant 
to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') 
\1\ and Rule 19b-4 thereunder.\2\ In this filing, the Phlx proposed 
amendments to By-Law Article X, Sections 10-16, 10-17 and 10-19. Notice 
of the proposed rule change was published in the Federal Register on 
March 17, 1998.\3\ The Commission received no comments on the proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 39472 (March 11, 1998), 
63 FR 13082 (March 17, 1998). The notice of the rule change included 
the publication of a technical amendment to the proposal, which was 
filed with the Commission on March 10, 1998.
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II. Description of the Proposal

    Phlx By-Law Article X, Sections 10-16, 10-17 and 10-19 set forth 
the charters of the Exchange's various trading floor standing 
committees. The proposed amendments specify that each of the trading 
floor standing committees shall consult with its respective quality of 
markets committee on all matters of policy and all matters that are to 
be presented to the Phlx Board of Governors. The proposed amendments 
are intended to foster the sharing of views on policy and other matters 
between the various trading floor standing committees (Floor Procedure, 
Foreign Currency Options and Options) and corresponding quality of 
markets committees. The intended sharing of views on all policy matters 
is designed to bring the perspectives of the non-industry 
representatives of the various quality of markets committees to matters 
that may be referred to the Board of Governors by the various trading 
floor standing committees.

III. Discussion

    The Commission believes the proposal is consistent with the Act in 
general, and in particular, with Section 6(b)(3) of the Act.\4\ Section 
6(b)(3) of the Act requires that the rules of an exchange assure a fair 
representation of its members in the selection of its directors and 
administration of its affairs and provide that one or more directors 
shall be representative of issuers and investors and not be associated 
with a member of the exchange, broker, or dealer.
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    \4\ 15 U.S.C. 78f(b)(3).
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    Phlx By-Law Article X, Section 10-20 requires that the quality of 
markets committees have broad representation that shall be equally 
balanced between industry and non-industry committee members. Thus, by 
requiring that the Phlx's quality of markets committees participate in 
the Phlx's policy making process, the proposal should help to ensure 
that the Phlx's rules fairly represent the views of all of the Phlx's 
members and constituents, including investors. The Commission believes 
that by promoting the participation of non-industry representatives in 
the decision making process of the Phlx, the proposal is consistent 
with Section 6(b)(3) of the Act.
    Accordingly, the Commission believes the proposed rule change is 
consistent with Section 6 of the Act \5\ in general, and in particular, 
with Section 6(b)(3) in that it is designed to assure a fair 
representation in the administration of the Exchange's affairs.\6\
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    \5\ 15 U.S.C. 78f.
    \6\ In approving the rule change, the Commission has considered 
the proposed rule's impact on efficiency, competition and capital 
formation. 15 U.S.C. 78c(f).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change SR-Phlx-97-62 be and hereby is 
approved.
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    \7\ 15 U.S.C. 78s(b)(2).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-10751 Filed 4-22-98; 8:45 am]
BILLING CODE 8010-01-M