32856 Federal Register / Vol. 66, No. 117 / Monday, June 18, 2001 / Notices

12 15 U.S.C. 78s(b)(2).

13 15 U.S.C. 78s(b)(2).

14 17 U.S.C. 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3The Exchange notes that when it imposes a

sanction in excess of $2,500, it must comply with

Rule 19d–1 under the Act. 17 CFR 240.19d–1.

Telephone conversation between Cindy Sink,

Senior Attorney, Regulatory Policy, PCX, and

Jennifer Colihan, Special Counsel, Division of

Market Regulation, Commission, on June 8, 2001.

Finally, by consolidating rules

affecting floor brokers in one section of

the PCX rules, the Commission believes

that PCX members and other interested

parties will have easier access to

relevant information. The Commission

believes that the rule consolidation will

assist floor brokers in understanding

their obligations, and thus facilitate

their compliance with the rules.

IV. Amendment No. 2

The Commission finds good cause for

approving Amendment No. 2 prior to

the thirtieth day after the date of

publication of notice in the Federal

Register. Amendment No. 2 makes

technical, non-substantive changes to

the proposal, such as changing the titles

of two subparagraphs of PCX Rule 6.47

to better reflect their purpose; reflecting

that additional subparagraphs were

added to PCX Rule 6.47(b); and deleting

language in a commentary that

duplicates language proposed in PCX

Rule 6.47(d).

The Commission finds that PCX’s

proposed changes in Amendment No. 2

clarify the proposed rule change and

raises no new regulatory issues. Further,

the Commission believes that

Amendment No. 2 does not significantly

alter the original proposal, which was

subject to a full notice and comment

period. Therefore, the Commission finds

that granting accelerated approval to

Amendment No. 2 is appropriate and

consistent with section 19(b)(2) of the

Act.12

V. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning Amendment No.

2, including whether Amendment No. 2

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 at

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–99–45 and should be

submitted by July 9, 2001.

VI. Conclusion

It Is Therefore Ordered, pursuant to

section 19(b)(2) of the Act,13 that the

proposed rule change (SR–PCX–99–45),

as amended, is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.14

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–15218 Filed 6–15–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44402; File No. SR–PCX–

2001–19]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Pacific Exchange, Inc. Relating to

Exchange Rules Under the Minor Rule

Plan

June 8, 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 4,

2001, 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 self-regulatory

organization. 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 Exchange proposes to increase

the fines imposed on ETP Holders, ETP

Firms or associated persons of an ETP

Firm of its wholly-owned subsidiary,

PCX Equities, Inc. (‘‘PCXE’’ or

‘‘Cooperation’’) for violating the

Exchange rules under the Minor Rule

Plan.

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 proposes to amend

PCXE’s rules governing Minor Rule Plan

violations to increase most fines because

the Exchange believes that: (1) the

current fines are too low to deter

violations of PCXE rules; and (2) an

increase in the current fines will more

adequately sanction violations of the

PCXE’s order-handling and investigating

rules. Many of these violations are

processed under the Minor Rule Plan.3

Disruptive conduct on the quality

floor is currently not fined for a first

violation, fined $250 for a second

violation and $500 for a third. Multiple

violations are calculated on a running

two-year basis. Under the proposed

increases, these fines will be $500 for a

first violation, $2,000 for a second and

$3,500 for a third calculated on the

same two-year basis.

More serious violations such as a

member’s failure to cooperate with a

PCX examination of its financial

responsibility or operational condition,

will be fined $2,000 for a first violation,

$4,000 for a second violation, and

$5,000 for a third violation. A member

that impedes or fails to cooperate in an

Exchange investigation will be fined

$3,500 for a first violation, $4,000 for a

second and $5,000 for a third. Less

serious violations such as fines or

improper dress under the PCXE dress

code remains the same at $100 for the

first violation, $250 for the second and

$500 for the third. Under the proposed

rule, the Enforcement Department

would continue to exercise its

discretion under PCXE Rule 10.12(j) and

takes cases out of the Minor Rule Plan

to pursue them as formal disciplinary

matters if the facts or circumstances

warrant such action. The Exchange’s

proposal also includes amendments to

PCXE’s Equity Floor Procedure Advices

Federal Register / Vol. 66, No. 117 / Monday, June 18, 2001 / Notices 32857

4 15 U.S.C. 78f(b).

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

6 15 U.S.C. 78f(b)(6).

7 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3 17 CFR 240.19b–4(f)(6).

4AUTOM is the Exchange’s electronic order

delivery and reporting system, which provides for

the automatic entry and routing of equity option

and index option orders to the Exchange trading

floor. Orders delivered through AUTOM may be

executed manually or routed to AUTOM’s

automatic execution feature, AUTO–X, if they are

eligible for execution on AUTO–X. Equity option

and index option specialists are required by the

Exchange to participate in AUTOM and its features

and enhancements. Option orders entered by

Exchange members into AUTOM are routed to the

appropriate specialist unit on the Exchange trading

floor.

5See Securities Exchange Act Release No. 43515

(November 3, 2000), 65 FR 69114 (November 15,

2000) (File No. SR–Phlx–99–32) (order approving

maximum order size eligibility of 75 contracts for

AUTO–X).

(‘‘EFPA’’) that correspond to the

increased Minor Rule Plan fines.

The Exchange believes that adoption

of the proposed rule change will serve

to significantly strengthen the ability of

the Exchange to carry out its oversight

responsibilities as a self-regulatory

organization. The rule also should aid

the Exchange in carrying out its

compliance and surveillance functions.

2. Basis

The Exchange believes that this

proposal is consistent with section 6(b) 4

of the Act, in general, and furthers the

objectives of section 6(b)(5) 5 and

6(b)(6),6 in particular, in that it is

designed to facilitate transactions in

securities, to prevent fraudulent and

manipulative acts and practices, and to

promote just and equitable principles of

trade and provides that Exchange

members shall be appropriately

disciplined for violations of the rules of

the Exchange.

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

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 it 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 20549. 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–2001–

19 and should be submitted by July 9,

2001.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–15219 Filed 6–15–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44404; File No. SR–Phlx–

2001–51]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Philadelphia Stock Exchange, Inc.

Increasing the Maximum Guaranteed

AUTO–X Size to 100 Contracts

June 11, 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 May 21,

2001, the Philadelphia Stock Exchange,

Inc. (‘‘Exchange’’ or ‘‘Phlx’’) 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

proposed rule change has been filed by

the Phlx as a ‘‘non-controversial’’ rule

change under Rule 19b–4(f)(6) under the

Act.3 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 proposed to amend Phlx

Rule 1080(c) to increase to 100 contracts

the maximum order size of option

contracts that are eligible to be executed

on the Exchange’s automatic execution

system (‘‘AUTO–X’’), which is part of

the Exchange’s Automated Options

Market (‘‘AUTOM’’) System.4 Currently,

customer market and marketable limit

orders of up to 75 contracts are eligible

for AUTO–X.5

Phlx also proposed to delete a section

of Phlx Rule 1080(c) that states that

orders for OTC Prime Index (‘‘OTX’’)

options are eligible for AUTO–X

execution for up to 100 contracts.

Below is the text of the proposed rule

change. Proposed new language is

italicized and proposed deletions are in

brackets.

* * * * *

Rule 1080. Philadelphia Stock Exchange

Automated Options Market (AUTOM) and

Automatic Execution System (AUTO–X)

(a)–(b) No change.

(c) AUTO–X–AUTO–X is a feature of

AUTOM that automatically executes public

customer market and marketable limit orders

up to the number of contracts permitted by

the Exchange for certain strike prices and

expiration months in equity options and

index options, unless the Options Committee

determines otherwise. AUTO–X

automatically executes eligible orders using

the Exchange disseminated quotation and

then automatically routes execution reports

to the originating member organization.

AUTOM orders not eligible for AUTO–X are

executed manually in accordance with

Exchange rules. Manual execution may also

occur when AUTO–X is not engaged. An

order may also be executed partially by

AUTO–X and partially manually.

The Options Committee may for any period

restrict the use of AUTO–X on the Exchange

in any option or series. Currently, orders up

to [75] 100 contracts, subject to the approval