[Federal Register Volume 60, Number 68 (Monday, April 10, 1995)]
[Notices]
[Pages 18160-18161]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8666]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35551; File No. SR-PSE-95-08]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change by the Pacific 
Stock Exchange, Inc., Relating to Its Rules on Short Interest Reporting

March 30, 1995.
    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 February 22, 1995, the Pacific Stock Exchange, Inc. (``PSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II 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.

    \1\15 U.S.C. 78s (b)(1)(1988).
    \2\17 CFR 240.19b-4 (1994).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to make a technical amendment to its 
rules on short interest reporting to allow members and member 
organizations for which the Exchange is the designated examining 
authority (``DEA'') to report their ``short'' positions to self-
regulatory organizations other than the Exchange. The text of the 
proposed rule change is as follows, wherein additions are italicized:
    Rule 2.6(f)--No change.
Commentary
    .01  No Change.
    .02  Members and member organizations for which the Exchange is the 
DEA need not report ``short'' positions to the Exchange as provided in 
Commentary .01 if such member or member organization has made 
arrangements, satisfactory to the Exchange, to report such positions to 
another self-regulatory organization.
    The Exchange requests the Commission to find good cause, pursuant 
to Section 19(b)(2) of the Act, for approving the proposed rule change 
prior to the thirtieth day after publication in the Federal Register.

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 self-regulatory organization 
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 III below. The self-regulatory 
organization 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
    On January 27, 1995, the Commission approved a rule change proposal 
of the Exchange that requires members and member organizations for 
which the Exchange is the DEA to report certain ``short'' positions to 
the Exchange.\3\ The Exchange is proposing an amendment to 
[[Page 18161]] that rule change to allow such members and member 
organizations to report their ``short'' positions to self-regulatory 
organizations other than the Exchange.

    \3\See Exchange Act Release No. 35287 (January 27, 1995), 60 FR 
6743 (February 3, 1995).
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    Specifically, the Exchange is proposing to add a new Commentary .02 
to Rule 2.6(f) to provide that members and member organizations for 
which the Exchange is the DEA need not report short positions to the 
Exchange as provided in Rule 2.6(f), Commentary .01, if such member or 
member organization has made arrangements, satisfactory to the 
Exchange, to report such positions to another self-regulatory 
organization.
2. Statutory Basis
    The Exchange believes the proposal is consistent with Section 6(b) 
of the Act, in general, and Section 6(b)(5), in particular, in that it 
is designed to protect investors and the public interest, to prevent 
fraudulent and manipulative acts and practices, and to promote just and 
equitable principles of trade.

B. Self-Regulatory Organization's Statement of 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. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. 
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. Sec. 552, will be available for inspection and copying at 
the Commission's Public Reference Section, 450 Fifth Street, N.W., 
Washington, D.C. 20549. Copies of such filing will also be available 
for inspection and copying at the principal office of the PSE. All 
submissions should refer to File No. SR-PSE-95-08 and should be 
submitted by May 1, 1995.

IV. Commission's Findings and Order Granting Accelerated Approval 
of Proposed Rule Change

    The Commission finds that the PSE's proposal to adopt an 
interpretation to its short interest position reporting rules 
permitting a member to report such positions to another self-regulatory 
organization, pursuant to an arrangement satisfactory to the Exchange, 
is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange. 
Specifically, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act.\4\ Section 6(b)(5) 
requires, among other things, that the rules of an exchange be designed 
to promote just and equitable principles of trade, to prevent 
fraudulent and manipulative acts, and, in general, to protect investors 
and the public. Further, the Commission notes that the Exchange has 
represented that, as the Designated Examining Authority (``DEA''), the 
Exchange will review compliance with its short interest rules during 
each oversight examination. Such examinations are conducted on a 
regular basis pursuant to the Exchange's status as DEA. Finally, the 
Exchange's financial compliance office will modify its examination 
module to ensure that the examiner checks for compliance with the short 
interest reporting rules.\5\

    \4\15 U.S.C. 78f(b)(5) (1988).
    \5\Conversation between David Semak & Michael Pierson, PSE, and 
Amy Bilbija, Commission, on March 24, 1995. The Exchange also 
indicated that, currently, there is only one member firm that will 
fall under the purview of the proposed amendment. The Exchange 
anticipates that only in rare occasions other members will need to 
make the arrangements provided for in the proposed rule change.
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    The Commission believes that the PSE proposal to adopt Commentary 
.02 as outlined above furthers the objectives of Section 6(b)(5) of the 
Act in that it should facilitate the efficient reporting of short 
interest positions without imposing an undue burden upon broker-
dealers.
    The Commission finds good cause for approving the proposed rule 
change prior the thirtieth day after the date of publication of notice 
of filing thereof in the Federal Register. The Commission believes that 
accelerated approval of the proposal is appropriate in order to allow 
the PSE to ensure compliance with the short position reporting rules 
implemented as of March 1, 1995. Further, the new short position 
reporting procedure was noticed previously in the Federal Register for 
the full statutory period and the Commission did not receive any 
comments on it.\6\

    \6\See Securities Exchange Act Release No. 35146 (December 23, 
1994), 60 FR 518 (January 4, 1995).
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    It is therefore ordered, pursuant to Section 19(b)(2)\7\ that the 
proposed rule change is hereby approved.

    \7\15 U.S.C. 78s(b)(2) (1988).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\

    \8\17 CFR 200.30-3(a)(12) (1994).
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[FR Doc. 95-8666 Filed 4-7-95; 8:45 am]
BILLING CODE 8010-01-M