[Federal Register Volume 65, Number 76 (Wednesday, April 19, 2000)]
[Notices]
[Pages 21052-21053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-9790]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42660; File No. SR-PCX-00-11]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Pacific Exchange, Inc., Rescinding the Exchange's Off-
Board Trading Rules

April 10, 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 March 26, 2000, the Pacific Exchange, Inc. (``PCX'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'' or 
``SEC'') 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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    The Exchange's proposed rule change raises issues similar to those 
raised by the New York Stock Exchange's (``NYSE'' proposal to repeal 
NYSE Rule 390, which rule generally prohibits NYSE members and their 
affiliates from effecting transactions in certain NYSE-listed 
securities away from a national securities exchange. The Commission 
recently issued the notice of filing for the NYSE's proposal (``NYSE 
Notice'') and solicited comment on a number of important issues that 
have broad implications for the structure of the U.S. securities 
markets.\3\ Specifically, the Commission requested comment on market 
fragmentation--the trading of orders in multiple locations without 
interaction among those orders--and on

[[Page 21053]]

several options for addressing market fragmentation. To promote a 
comprehensive discussion of off-board trading restrictions and related 
market fragmentation issues, the Commission requests that persons 
interested in the Exchange's proposal refer to the NYSE Notice and 
submit comments that respond to the questions presented in the NYSE 
Notice.\4\
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    \3\ See Securities Exchange Act Release No. 42450 (Feb. 23, 
2000), 65 FR 10577 (Feb. 28, 2000) File No. SR-NYSE-99-48). The 
Commission notes that similar proposals have been filed by the 
American Stock Exchange, Securities Exchange Act Release No. 42460 
(February 25, 2000), 65 FR 11618 (March 3, 2000) (File No. SR-Amex-
00-05); the Chicago Stock Exchange, Securities Exchange Act Release 
No. 42459 (Feb. 25, 2000), 65 FR 11619 (March 3, 2000) (File No. SR-
CHX-99-28); the Philadelphia Stock Exchange, Securities Exchange Act 
Release No. 42458 (Feb. 25, 2000), 65 FR 11628 (March 3, 2000) (File 
No. SR-Phlx-00-12); and the Boston Stock Exchange, SR-BSE-00-02.
    \4\ The Commission notes that the NYSE Notice is available on 
the Commission's website at: http://www.sec.gov/rules/sros/ny9948n.htm.>
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange proposes to eliminate Rules 5.43-5.49 and to modify 
Rule 5.5(b) which relate to off-board trading restrictions.

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 Exchange is proposing to eliminate Rules 5.43-5.49 and to 
modify Rule 5.5(b) which relate to off-board trading restrictions. The 
Exchange believes that once the Commission approves the NYSE's proposal 
to rescind its off-board trading restrictions, the Exchange's off-board 
trading restrictions will no longer be necessary or appropriate.\5\
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    \5\ Telephone conversation between Michael D. Pierson, Senior 
Attorney, Regulatory Policy, Exchange, and Rebekah Liu, Special 
Counsel, Division of Market Regulation, Commission, dated April 3, 
2000.
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2. Statutory Basis
    The proposed rule changes are consistent with Section 6(b) of the 
Act \6\ in general and furthers the objectives of Section 6(b)(5) \7\ 
in particular in that they are designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to remove impediments to and perfect the mechanism 
of a free and open market and a national market system, and, in 
general, to protect investors and the public interest; and are not 
designed to permit unfair discrimination between customers, issuers, 
brokers and dealers.
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    \6\ 15 U.S.C. 78f.
    \7\ 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 furthermore 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 self-regulatory organization 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. The Commission also invites 
interested persons to submit written data, views, and arguments on the 
market fragmentation issues presented in the NYSE Notice.\8\ 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 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 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 Exchange. All 
submissions should refer to File No. SR-PCX-00-11 and should be 
submitted by May 10, 2000. Comments responding to the Commission's 
request for comment on market fragmentation issues should refer to File 
No. SR-NYSE-99-48 and should be submitted by April 28, 2000.
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    \8\ See supra notes 3 and 4.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 00-9790 Filed 4-18-00; 8:45 am]
BILLING CODE 8010-01-M