57918 Federal Register / Vol. 70, No. 191 / Tuesday, October 4, 2005 / Notices 

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 In Amendment No. 1, the Exchange 

incorporated additional provisions under PCX Rule 

6.93 to apply to the Minor Rule Plan and 

Recommended Fine Schedule, provided more 

detailed descriptions of the PCX Rules that would 

apply to the Minor Rule Plan and Recommended 

Fine Schedule under this proposed rule change, 

and made other non-substantive changes to clarify 

the purpose of the proposal. 

4The terms ‘‘OTP Holder’’ and ‘‘OTP Firm’’ are 

defined in PCX Rules 1.1(q) and 1.1(r), respectively. 

5 If the PCX determines that a violation is not 

minor in nature, including repeated violations of a 

PCX Rule, the PCX may, at its discretion, proceed 

under PCX Rule 10.4 (Complaints) rather than 

under the MRP. See PCX Rule 10.12(f). 

Paper Comments 

• Send paper comments in triplicate 

to Jonathan G. Katz, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–9303. 

All submissions should refer to File 

No. SR–PCX–2005–106. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). 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. Copies of such filing will also be 

available for inspection and copying at 

the principal office of the PCX. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File No. 

SR–PCX–2005–106 and should be 

submitted on or before October 25, 

2005. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.16

Jonathan G. Katz, 

Secretary. 

[FR Doc. 05–19773 Filed 10–3–05; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–52523; File No. SR–PCX–

2005–98] 

Self-Regulatory Organizations; Pacific 

Exchange, Inc.; Notice of Filing of 

Proposed Rule Change and 

Amendment No. 1 Thereto To Amend 

Its Minor Rule Plan and Recommended 

Fine Schedule in Connection With 

Rules Regarding Principal Orders, 

Principal Acting as Agent Orders, and 

Limitations on Principal Order Access 

September 28, 2005. 

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 August 

16, 2005, the Pacific Exchange, Inc. 

(‘‘PCX’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. On 

September 27, 2005, the Exchange filed 

Amendment No. 1 to the proposed rule 

change.3 The Commission is publishing 

this notice to solicit comments on the 

proposed rule change, as amended, from 

interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

PCX proposes to amend its Minor 

Rule Plan (‘‘MRP’’) and Recommended 

Fine Schedule (‘‘RFS’’) under PCX Rule 

10.12 with respect to provisions of the 

PCX Options Linkage program 

(‘‘Linkage’’) that relate to Principal 

Orders (‘‘P Orders’’), Principal Acting as 

Agent Orders (‘‘P/A Orders’’), and 

Limitations on Principal Order Access. 

The text of the proposed rule change is 

available on the Exchange’s Internet 

Web site (http://www.pacificex.com), at 

the Exchange’s principal office, and at 

the Commission’s Public Reference 

Room. 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange’s MRP, which 

incorporates the RFS, under PCX Rule 

10.12 provides for an abbreviated 

procedure for the resolution of minor 

rule violations. The Exchange is 

proposing to amend the MRP and RFS 

to bring additional rules within their 

coverage. PCX believes that inclusion of 

such matters would provide a fair 

means of promptly resolving minor rule 

violations that do not rise to the level of 

formal disciplinary proceedings and 

enforcement action. 

Specifically, the Exchange is 

proposing to add the violation of its 

Linkage rules relating to: (i) P Orders 

and P/A Orders (PCX Rules 6.93(a), (b), 

(c)(1), (d), and (e)), which require OTP 

Holders and OTP Firms 4 to observe 

certain time constraints and Linkage 

order procedures in sending and 

receiving P Orders and P/A Orders 

through Linkage; and (ii) Limitations on 

Principal Order Access (also known as 

80/20) (PCX Rule 6.96), which prohibits 

the sending of P Orders in an eligible 

option class through Linkage for a given 

quarter if a market maker effected 20 

percent or more of its volume by 

sending P Orders through Linkage. As 

proposed, an OTP Holder or OTP Firm, 

who fails to follow the Linkage rules set 

forth above, would be fined $500 for the 

first violation, $1,000 for the second 

violation, and $2,500 for the third 

violation.5

The Exchange believes that the 

proposed rule change would strengthen 

the ability of the Exchange to carry out 

its oversight responsibilities as a selfregulatory organization. The Exchange 

also believes that the proposed rule 

change should aid PCX in carrying out 

its surveillance and enforcement 

functions. The Exchange represents that 

Federal Register / Vol. 70, No. 191 / Tuesday, October 4, 2005 / Notices 57919 

6See supra note 5. 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

9 15 U.S.C. 78f(b)(6) and (7). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5The PHLX Housing SectorSM (HGXSM) is a 

modified capitalization-weighted index composed 

of 21 companies whose primary lines of business 

are directly associated with the U.S. housing 

construction market. The index composition 

encompasses residential builders, suppliers of 

aggregate, lumber and other construction materials, 

Continued 

it does not minimize the importance of 

compliance with these rules and all 

other rules subject to the imposition of 

fines under the Exchange’s MRP. The 

Exchange relies on its MRP as a tool to 

address enumerated violations to 

provide the Exchange with greater 

flexibility in addressing violations that 

may not require formal disciplinary 

proceedings. Under the proposed rule 

change, the Exchange’s Enforcement 

Department would continue to exercise 

its discretion under PCX Rule 10.12(f) 

and pursue certain cases as a formal 

disciplinary matter under PCX Rule 10.4 

to the extent that the facts or 

circumstances warrant such action.6

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,7 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act,8 in particular, in that it 

would promote just and equitable 

principles of trade, facilitate 

transactions in securities, remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system, and 

protect investors and the public interest. 

The proposal is also consistent with, 

and furthers the objectives of, Sections 

6(b)(6) and 6(b)(7) of the Act 9 in that it 

would help ensure that members and 

persons associated with members are 

appropriately disciplined for violations 

of the Act, the rules and regulations 

thereunder, and the rules of the 

Exchange, and provide a fair procedure 

for disciplining members and persons 

associated with members. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change would 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 

No written comments were solicited 

or received with respect to 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, as amended, is consistent with 

the Act. Comments may be submitted by 

any of the following methods: 

Electronic comments 

Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–PCX–2005–98 on the 

subject line. 

Paper comments 

• Send paper comments in triplicate 

to Jonathan G. Katz, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–9303. 

All submissions should refer to File 

Number SR–PCX–2005–98. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site 

(http://www.sec.gov/rules/sro.shtml). 

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, 100 F Street, NE., Washington, 

DC 20549. Copies of such filing also will 

be available for inspection and copying 

at the principal offices of the Exchange. 

All comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–PCX–2005–98 and should 

be submitted on or before October 25, 

2005. 

For the Commission by the Division of 

Market Regulation, pursuant to delegated 

authority.10

Jonathan G. Katz, 

Secretary. 

[FR Doc. 05–19807 Filed 10–3–05; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–52512; File No. SR–Phlx–

2005–50] 

Self-Regulatory Organizations; 

Philadelphia Stock Exchange, Inc.; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change Relating To Reduce the Value 

of PHLX Housing SectorSM Index 

Options by Half 

September 27, 2005. 

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 

September 15, 2005, 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 and II 

below, which Items have been prepared 

by the Phlx. The Phlx filed the proposal 

pursuant to Section 19(b)(3)(A) under 

the Act,3 and Rule 19b–4(f)(6) 

thereunder,4 which renders the proposal 

effective upon filing with the 

Commission. 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 proposes to reduce the value 

of its PHLX Housing SectorSM Index 

(‘‘Index’’) option (‘‘HGX’’) 5 to one-half