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###### Securities and Exchange Commission

          - [Release No. 34-44386; File No. SR-Phlx-2001-45]

                    On April 20, 2001, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) [1]                                          and Rule 19b-4 thereunder,[2]                                          a proposed rule change to amend Rule 930 to add paragraph (k).                

Rule 930(k) relates to the Exchange's ability to allow a member who leases a membership (“lessee”) to pay past-due fees owed to the Exchange by the lessor under a lease agreement, on behalf of the lessor. 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 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, 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. The Exchange also amended 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.

                    The proposed rule change was published for comment in the                     **Federal Register**                     on May 2, 2001.[3]                                          The Commission received no comments on the proposal.                

                    The Commission finds that the proposed rule change is consistent with the Act and the rules and regulations under the Act applicable to a national securities exchange [4]                                          and, in particular, the requirements of Section 6 of the Act [5]                                          and the rules and regulations thereunder. The Commission finds specifically that the proposed rule change is consistent with the requirement of Section 6(b)(5) [6]                                          because it is designed to promote just and equitable principles of trade and to protect investors and the public interest by enabling lessees to continue trading on the Exchange even when their respective lessors fail to pay fees owed the Exchange when due.                

                    The Commission is not required under Section 19(b)(2) of the Act [7]                                          to find that a proposed rule change by a self-regulatory organization is lawful under state corporation law; in approving this proposal, the Commission is relying on the Phlx's representation that it has the general power under applicable provisions of Delaware law to modify Rule 930 by adding paragraph (k). The Commission is also relying on the Phlx's representations that proposed Rule 930(k) is permissible under Pennsylvania contract law. The Commission has not independently evaluated the accuracy of Phlx's representations regarding Delaware or Pennsylvania law.                

*It is therefore ordered,*                     pursuant to Section 19(b)(2) of the Act,[8]                                          that the proposed rule change (SR-Phlx-2001-45) is approved.                

                    For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[9] 

Margaret H. McFarland,

Deputy Secretary.

# Footnotes

1.                             15 U.S.C. 78s(b)(1).                    
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2.                             17 CFR 240.19b-4.                    
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3.                                                     *See*                         Securities Exchange Act Release No. 44220 (April 25, 2001), 66 FR 22059.                    
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4.                             In approving this proposed rule change, the Commission has considered the proposal's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).                    
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5.                             15 U.S.C. 78f.                    
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6.                             15 U.S.C. 78f(b)(5).                    
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7.                             15 U.S.C. 78s(b)(2).                    
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8.                             15 U.S.C. 78s(b)(2).                    
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9.                             17 CFR 200.30-3(a)(12).                    
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[FR Doc. 01-14462  Filed 6-7-01; 8:45 am]

BILLING CODE 8010-01-M