Document ID: SEC-2007-0782-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Philadelphia Stock Exchange, Inc.
Posted Date: 2007-06-06T04:00Z

[Federal Register: June 6, 2007 (Volume 72, Number 108)]
[Notices]               
[Page 31363-31364]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06jn07-136]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55812; File No. SR-Phlx-2006-61]

 
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Order Approving Proposed Rule Change and Amendments No. 2 and No. 4 
Thereto Relating to Order and Decorum Regulations

May 24, 2007.

I. Introduction

    On September 26, 2006, the Philadelphia Stock Exchange, Inc. 
(``Phlx'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``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 the Exchange's Option 
Order and Decorum Regulations. On November 14, 2006, the Exchange filed 
Amendment No. 1 to the proposed rule change, which was subsequently 
withdrawn.\3\ On January 19, 2007, the Exchange filed Amendment No. 2 
to the proposed rule change.\4\ The proposed rule change, as amended, 
was published for comment in the Federal Register on March 27, 2007.\5\ 
The Commission received no comments regarding the proposal. On May 4, 
2007, the Exchange filed Amendment No. 3 to the proposed rule change, 
which was subsequently withdrawn.\6\ On May 14, 2007, the Exchange 
filed Amendment No. 4 to the proposed rule change.\7\ This order 
approves the proposed rule change, as amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ On January 12, 2007, Phlx withdrew Amendment No. 1.
    \4\ Amendment No. 2 replaced the original proposed rule change 
in its entirety.
    \5\ See Securities Exchange Act Release No. 55492 (March 20, 
2007), 72 FR 14321 (``Notice'').
    \6\ On May 14, 2007, Phlx withdrew Amendment No. 3.
    \7\ In Amendment No. 4, the Exchange deleted proposed rule text 
from Exchange Regulation 2 regarding the registration of equipment 
on the Exchange floor. This deletion conformed the proposed rule 
text with changes the Exchange made to the proposal in Amendment No. 
2. This is a technical amendment and is not subject to notice and 
comment.
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II. Description of Proposal

    The Exchange proposes to amend the Exchange's Option Order and 
Decorum Regulation 2 (Food, Liquids and Beverages); Regulation 4 
(Order); Regulation 5 (Visitors and Applicants); and Regulation 6 
(Dress), pursuant to Exchange Rule 60. The Exchange's amendments to 
these Exchange regulations include the following:
    (i) An amendment to Exchange Regulation 2 that (1) Allows Exchange 
members and associated persons to consume foods, liquids and beverages 
on the Exchange's trading floor, provided that such consumption does 
not unreasonably interfere with business on the trading floor, (2) adds 
language concerning vandalism, (3) increases the fines associated with 
violations of Exchange Regulation 2, (4) adds additional fines for 
violating trash, litter and vandalism regulations, and (5) changes the 
title of the Exchange Regulation 2 from ``Food, Liquids and Beverages'' 
to ``Food, Liquids and Beverages, Trash, Litter and Vandalism;''
    (ii) An amendment to Exchange Regulation 4 that adds language 
clarifying that the use of profanity is a violation of this Regulation;
    (iii) An amendment to Exchange Regulation 5 that authorizes an 
Exchange official or Options Exchange Official to permit visitors on 
the trading floor;
    (iv) An Amendment to Exchange Regulation 6 that (1) Clarifies what 
business attire is deemed acceptable on the trading floor, and (2) 
increases the amount of fines associated with violations of Exchange 
Regulation 6; and
    (v) Amendments to Exchange Regulations 2, 4, 5 and 6 that add 
language indicating that Exchange Staff may impose fines for breaches 
of order, decorum, health, safety and welfare on the members, member 
organizations, participants, participant organizations and their 
associated persons.

III. Discussion and Commission Findings

    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.\8\ 
Specifically, the Commission finds that the proposal is consistent with 
Section 6(b) of the Act \9\ in general, and furthers the objectives of 
Section 6(b)(5) of the Act \10\ in particular, in that it is designed 
to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and, in general to protect investors and the 
public interest. Specifically, the Commission finds that proposed 
amendments to the Exchange's order and decorum regulations would assist 
the Exchange in maintaining an orderly operating environment, which is 
consistent with the protection of investors and the public interest.
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    \8\ In approving this proposed rule change the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    In addition, the Commission finds that the proposal is consistent 
with Section 6(b)(6) of the Act \11\ which requires the rules of an 
exchange provide that its members be appropriately disciplined for 
violations of the Act as well as the rules and regulations thereunder. 
Specifically, the Commission finds that the Exchange's proposed 
disciplinary sanctions and fines for violations of its order and 
decorum regulations are consistent with normal regulatory safeguards 
that an exchange should provide under the Act to ensure the order and 
operation of its trading floor. In particular, these proposed fines 
appear to provide an

[[Page 31364]]

appropriate sanction for violations of the Exchange's order and decorum 
rules and should help to deter violations. This proposed rule change 
also makes clear that fines can be imposed against the Exchange's 
members, member organizations, participants, participant organizations 
and their associated persons for violations of the Exchange's rules.
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    \11\ 15 U.S.C. 78f(b)(6).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\12\ that the proposed rule change, as amended, is approved.
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    \12\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-10872 Filed 6-5-07; 8:45 am]

BILLING CODE 8010-01-P