Federal Register / Vol. 66, No. 39 / Tuesday, February 27, 2001 / Notices 12581

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

13 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3Securities Exchange Act Release No. 43739

(December 19, 2000), 65 FR 82440.

4 In approving this rule, the Commission has

considered the proposed rule’s impact on

efficiency, competition and capital formation. 15

U.S.C. 78c(f).

5 15 U.S.C. 78f.

6 15 U.S.C. 78f(b)(5).

7See note 4, supra.

8 15 U.S.C. 78s(b)(2).

9 17 CFR 200.30–3(a)(12).

reasonable and provide fair procedures

for appropriately disciplining members

and member organizations for minor

rule violations that warrant some type of

punitive measure, but for which a full

disciplinary hearing would be an

inappropriate waste or resources

because of the minor nature of the

violation. The Commission believes that

the proposed change to the existing fine

schedule is appropriate and should

serve to discourage violations of the

Exchange’s telephone policy.

The Commission supports the

Exchange’s efforts to codify policies on

telephone use to give its membership

adequate notice of what conduct is

prohibited. while supporting the

Exchange’s efforts to monitor and

regulate communications on its options

floor, the Commission expects the Phlx

to ensure that Phlx Rule 606(e) is not

used to limit access to services offered

by the Exchange and is not applied in

a manner that is inconsistent with the

Act. Specifically, the Commission

expects that Phlx Rule 606(e) will not be

interpreted in a manner that permits

unfair discrimination between

customers, issuers, brokers, or dealers or

imposes any unnecessary or

inappropriate burden on competition, or

is otherwise used to limit member

access to Exchange services.

IV. Conclusion

It Is Therefore Ordered, pursuant to

section 19(b)(2) of the Act,12 that the

proposed rule change (SR–PHLX–00–

48), as amended, is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.13

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–4751 Filed 2–26–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43989; File No. SR–Phlx–

00–94]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.

Relating to Prohibition to Harassment

and Other Improper Behavior Because

of Listing or Competitive Practices

February 20, 2001.

I. Introduction

On November 13, 2000, the

Philadelphia Stock Exchange, Inc.

(‘‘Phlx’’ or ‘‘Exchange’’) submitted to the

Securities and Exchange Commission

(‘‘Commission’’), pursuant to section

19(b)(1) of the Securities and Exchange

Act of 1934 (‘‘Act’’) 1 and Rule 19b–

4 thereunder,2 a proposed rule change

to add new Commentary .01

(‘‘Prohibition Against Harassment’’) to

the Exchange’s Rule 707 (‘‘Just and

Equitable Principles of Trade’’), to

prohibit members, member

organizations, or persons associated

with or employed by members or

member organizations from engaging in

harassment and other improper

behavior because of listing or

competitive practices.

The proposed rule change was

published for comment in the Federal

Register on December 28, 2000.3 No

comments were received on the

proposal. This order approves the

proposal.

II. Description of the Proposal

The Phlx proposes to add new

Commentary .01 (‘‘Prohibition Against

Harassment’’), to prohibit members,

member organizations, or persons

associated with or employed by

members or member organizations from

engaging in harassment and other

improper behavior because of listing or

competitive practices.

Specifically, proposed new

Commentary .01 to Phlx Rule 707 would

state that it is conduct inconsistent with

just and equitable principles of trade for

any member, member organization, or

person associated with or employed by

a member or member organization to

directly or indirectly threaten, harass,

intimidate, refuse to deal with, or

retaliate against any member, member

organization, person associated with or

employed by a member or member

organization, or other market participant

because such member, member

organization, person associated with or

employed by a member or member

organization, or other market participant

has: (i) Made a proposal to any exchange

or other market to list or trade any

option class; (ii) advocated or proposed

to list or trade an option class on any

exchange or other market; (iii)

commenced making a market in or

trading new option class on any

exchange or other market; (iv) sought to

increase the capacity of any options

exchange or the options industry to

disseminate quote or trade data; (v)

sought to introduce new option

products; or (vi) acted, or sought to act,

competitively.

III. Discussion

The Commission finds that the

proposed rule change is consistent with

the requirements of the Act and the

rules and regulations thereunder

applicable to a national securities

exchange,4 and in particular, with the

requirements of section 6 of the Act.5

Specifically, the Commission finds that

the proposal is consistent with sections

6(b)(5) of the Act 6 in that it is designed

to codify the Exchange’s prohibition

against harassment and improper

practices in a manner that promotes just

and equitable principles of trade,

prevents fraudulent and manipulative

acts and practices, maintains fair and

orderly markets, and protects investors

and the public interest.

Phlx’s new Commentary .01 to Phlx

Rule 707 provides generally that it is

conduct inconsistent with just and

equitable principles of trade for market

members, member organizations, their

employees, and associated persons

engage in harassing and certain

improper retaliatory actions as a result

of another market participant’s listing or

competitive behavior. The Commission

believes that this codification of existing

practice in Phlx’s Rules is a reasonable

means to comply with the Commission’s

directive,7 and to prevent fraudulent

and manipulative acts and practices,

maintain fair and orderly markets, and

protect investors and the public interest,

as required by section 6(b)(5) of the Act.

IV. Conclusion

It is Therefore Ordered, pursuant to

section 19(b)(2) of the Act,8 that the

proposed rule change (SR–Phlx–00–94)

is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–4752 Filed 2–26–01; 8:45 am]

BILLING CODE 8010–01–M