22058 Federal Register / Vol. 66, No. 85 / Wednesday, May 2, 2001 / Notices

3 15 U.S.C. 78q–1.

4 15 U.S.C. 78s(b)(3)(A)(ii).

5 17 CFR 240.19b–4(f)(2)

6 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 44088

(March 20, 2001), 66 FR 16966.

4 In approving the proposed rule change, the

Commission has considered the proposed rule’s

impact on efficiency, competition, and capital

formation. See 15 U.S.C. 78c(f).

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

6See, e.g., Securities Exchange Act Release No.

38766 (June 24, 1997), 62 FR 35244, 35245 (June 30,

1997) (approving proposal by the Pacific Exchange

to change the closing time of its equity floor from

1:50 to 1:30 Pacific Time).

proposed rule change also revises DTC’s fee schedule so that the fees align with

the services referenced.

Service Present fee

Proposed

fee

For each reclaim instruction processed over the EDS after payable date in respect of withholding tax relief on Netherlands securities as part of the DTC Tax Relief service.None ................. $25.00

For each EDS instruction relating to cash-in-lieu of fractional shares, or round-up for additional shares ...................... None ................. 25.00

For each dividend, interest or principal payment arranged to be paid at a participant’s request directly from agent to

participant, where such payment is made by a foreign issuer to such participant.

None ................. 16.26

DTC believes that the proposed rule

change is consistent with section 17A of

the Act 3 and the rules thereunder

because fees will be more equitably

allocated among users of DTC’s services

and EDS procedures will better describe

current EDS functionality.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

DTC perceives on impact on

competition by reason of the proposed

rule change.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

Written comments from DTC

participants or others have not been

solicited or received on the proposed

rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Act

Because the foregoing rule change

establishes or changes a due, fee, or

other charge imposed by DTC, it has

become effective pursuant to section

19(b)(3)(A)(ii) of the Act 4 and Rule 19b–

4(f)(2) thereunder.5 At any time within

sixty days of the filing of the proposed

rule change, the Commission may

summarily abrogate such 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.

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

Section, 450 Fifth Street, NW.,

Washington, DC 20549. Copies of such

filing will also be available for

inspection and copying at DTC. All

submissions should refer to the File No.

SR–DTC–00–16 and should be

submitted by May 23, 2001.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–10981 Filed 5–1–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44213; File No. SR–Phlx–

01–21]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.

Relating to Primary Trading Session

Hours for Equities Whose Primary

Market Is Not the Exchange

April 23, 2001.

On March 16, 2001, the Philadelphia

Stock Exchange, Inc. (Phlx) filed with

the Securities and Exchange

Commission (‘‘Commission’’), pursuant

to Section 19(b)(1) of the Securities

Exchange Act of 1934 (‘‘Act’’) 1 and Rule

19b–4 2 thereunder, a proposal to amend

Phlx Rule 101 to establish the Primary

Trading Session hours of securities

whose primary market is not Phlx. On

March 28, 2001, the Commission

published the proposed rule change in

the Federal Register.3 The Commission

received no comments on the proposal.

This order approves the proposed rule

change.

The Commission finds that the

proposed rule change is consistent with

the Act and the rules and regulations

thereunder applicable to a national

securities exchange.4 In particular, the

Commission finds that the proposal is

consistent with Section 6(b)(5) of the

Act which requires, among other things,

that the rules of an exchange be

designed to promote just and equitable

principles of trade; to facilitate

transactions in securities; to remove

impediments to and perfect the

mechanisms of a free and open market

and a national market system; and, in

general, to protect investors and the

public interest.5

Many securities are traded on Phlx

pursuant to unlisted trading privileges

(‘‘UTP’’). The proposed rule change

would make the hours of the Phlx

Primary Trading Session for these

securities the same hours that they are

traded on their primary markets (except

if the primary market is PCX Equities,

Inc.). The Commission has previously

stated that, absent any regulatory

concerns, the decision to change an

exchange’s trading hours is a matter that

falls within the business discretion of

the exchange.6 The Commission does

not believe that the proposal raises any

regulatory concerns and notes that no

comments on the proposal were

submitted. In addition, although the

proposed rule change will not affect the

current equity trading hours on Phlx,

Federal Register / Vol. 66, No. 85 / Wednesday, May 2, 2001 / Notices 22059

7 15 U.S.C. 78s(b)(2).

8 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 43987

(February 20, 2001), 66 FR 12582 (February 27,

2001) (approving adoption of Article Nineteenth,

SR–Phlx–99–50.

4See also 8 Del. C. § 121(a) (providing that in

addition to powers expressly granted by law or the

Certificate of Incorporation, the corporation and its

directors may exercise ‘‘any powers incidental

thereto, so far as such powers and privileges are

necessary or convenient to the conduct, promotion

or attainment of the business or purposes set forth

in its certificate of incorporation’’); Certificate of

Incorporation, Article Third (stating, in part, that

the Exchange may operate in any lawful act or

activity for which corporations may be organized

under the DGCL).

5See, e.g., By-Law Art, XV, § 15–1(a) (providing

that a membership may be leased in accordance

with such rules as the Board may adopt); By-Law

Art. XII, § 12–8 (authorizing lessor application fee

as fixed from time to time by the Board, lessor

initiation fee and fee upon transfer of equitable title

to a membership); Rule 930 (setting forth required

terms of lease agreement and providing, among

other things, that the Exchange may dispose of a

membership subject to a lease agreement); Rule

960.1 (providing that all members, member

organizations and any persons associated with any

member are subject to expulsion, suspension,

termination as to activities at the Exchange or any

other fitting sanction for violation of the Rules of

the Exchange); see also Certificate of Incorporation,

Article Twentieth (giving Board plenary authority

to assess fees, dues and other charges and to impose

penalties, including cancellation of a membership

and forfeiture of all rights as a lessor or lessee, for

nonpayment.)

6See Exchange By-Law Art. XII, § 12–9. As a

condition of the right to lease their seats, lessors

agree ‘‘to abide by the [Exchange’s] By-laws as they

have or shall be from time to time amended, and

by all rules and regulations adopted pursuant to the

By-Laws.’’ Lessees, as members, likewise make the

same commitment.

the hours of Phlx’s Primary Trading

Session will automatically change

whenever the hours of a primary market

change, thereby alleviating the need for

additional rule changes. Accordingly,

the Commission concludes that Phlx’s

proposal is reasonable and consistent

with the Act.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,7 that the

proposed rule change (SR–Phlx–01–21)

is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–10886 Filed 5–1–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44220; File No. SR–Phlx–

2001–45]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.

Amending Rule 930

April 25, 2001.

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 April 20, 2001, 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, pursuant to Rule 19b–4 of

the Act, proposes to amend Exchange

Rule 930, Lease Agreement, to add new

paragraph (k). Proposed Rule 930(k)

relates to the Exchange’s ability to allow

a member who leases a membership

(‘‘leasee’’) to pay past-due fees owed to

the Exchange by the lessor under a lease

agreement, on behalf of the lessor. The

Exchange also proposes to amend Rule

930 to make certain minor technical

amendments to the text of the rule in

order to make the various paragraphs

contained in the rule more consistent.

Proposed Rule 930(k) states that the

Exchange is a third party beneficiary of

the lease agreement, and shall have the

right to permit payment by a lessee of

past-due fees owed to the Exchange by

the lessor. The proposed rule further

states that should the lessee pay such

past due amounts, the lessee shall

provide written notice to the lessor and

the Exchange. Once the lessee has

elected to make such payments, the

lessee may continue to make such

payments for a period of up to three

months and set off such amounts, with

notice to the Exchange and lessor

against amounts due the lessor by the

lessee. Furthermore, proposed Rule

930(k) states that notwithstanding the

terms of the lease agreement, a lessee

will not be considered in default of the

lease agreement solely by virtue of

having elected to make such payments.

In addition, certain minor technical

amendments will be made to Rule 930

in order to make the text more

consistent. For example, the word

‘‘agreement’’ will be added after the

word ‘‘lease’’ in order to make it

consistent with other references to

‘‘lease agreements.’’ Also, the words

‘‘Certificate of Incorporation’’ are added

to make the text more consistent and to

clarify that various terms of a lease

agreement must be in accordance with

the Exchange’s Certificate of

Incorporation, as well as its by-laws and

rules.

A. Discussion

1. Authority Under Delaware Law

The Exchange represents that, as a

non-stock corporation organized under

the Delaware General Corporation law

(‘‘DGCL’’), it has the authority to adopt

proposed Rule 930(k). Article

Nineteenth of the Exchange’s Certificate

of incorporation expressly empowers

the Board of Governors (‘‘Board’’) of the

Exchange:

to determine whether, and under what terms

and conditions, memberships may be leased,

and to adopt by resolution or to set forth in

the Rules of the Board of Governors such

rules with respect to lease agreements,

lessors and lesses as the board may from time

to time determine to be advisable, including,

without limitation, rules regulating and

setting forth the rights and obligations of

lessors and lessees, the required terms of

lease agreements, and the fees, dues and

other charges required to be paid by lessors

and lessees (or either of them) to the

Corporation in connection with and for the

privilege of leasing memberships.3

Thus, the Exchange represents that Rule

930(k) clearly falls within Article

Nineteenth’s grant of authority.

In addition, Section 141(j) of the

DGCL empowers the Board to direct the

business and affairs of the Exchange,

and the Exchange’s by-laws give the

Board broad power to adopt rules of the

Exchange. 8 Del. C.§ 141(j); 4 By-Law

Art. IV, § 4–4.

The Exchange represents that

numerous provisions of its by-laws and

rules already address matters similar to

those addressed by proposed Rule

930(k).5 Moreover, the Exchange’s bylaws require lessors and lessees (as

members) to pledge to abide by the rules

as they may be amended from time

time.6

Accordingly, the Exchange states that

the Board has the authority to adopt

Rule 930(k) under the DGCL and the

Exchange’s Certificate of Incorporation,

by-laws and rules.

2. Permissibility Under Pennsylvania

Contract Law

The Exchange believes that proposed

Rule 930(k) is also permissible as a

matter of Pennsylvania contract law.

The terms of the Exchange’s contractual

relationships with both lessors and

lessees permit adoption of the rule, and,

in any event, the Exchange is already a