Document ID: SEC-2007-0844-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Philadelphia Stock Exchange, Inc.
Posted Date: 2007-06-19T04:00Z

[Federal Register: June 19, 2007 (Volume 72, Number 117)]
[Notices]               
[Page 33797-33798]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19jn07-96]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55898; File No. SR-Phlx-2007-16]

 
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Notice of Filing of a Proposed Rule Change Relating to Rules Pertaining 
to Training Requirements and Floor Procedure Advices

 June 12, 2007.
    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 25, 2007, the Philadelphia Stock Exchange, Inc. (``Phlx'' 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 substantially prepared by the 
Exchange. 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).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Phlx proposes to amend: (a) Rule 625, Training; (b) Equity 
Floor Procedure Advices and Order & Decorum Regulations (``EFPA''), F-
30 Training; and (c) Options Floor Procedure Advices and Order & 
Decorum Regulations (``OFPA''), F-30 Options Trading Floor Training, to 
clarify and expand the Exchange's training requirements. The Exchange 
also proposes to update the language in Rule 970, Floor Procedure 
Advices: Violations, Penalties and Procedures, to delete the reference 
to the now-obsolete Market Surveillance Department and to provide that 
any authorized official of the Exchange may sign a citation for a floor 
procedure advice violation.
    The text of the proposed rule change is available on Phlx's Web 
site at http://www.phlx.com, at the Phlx'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 Phlx 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 Phlx 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
    Currently, Rule 625 and EFPA F-30 and OFPA F-30 set forth the 
provisions relating to mandatory training. The Exchange currently 
requires and conducts mandatory training sessions at various times 
throughout the year.\3\ The purpose of this proposal is to expand the 
category of individuals who are required to attend the mandatory 
training sessions and the training topics that will be covered and to 
specifically set forth the mandatory training requirements, which will 
take place on at least a semi-annual basis, for floor members. 
Mandatory training should provide a means for keeping members and 
persons employed by or associated with such members or member 
organizations, and Participant Authorized Users (``PAUs''), up-to-date 
with, among other things, current rules and regulations and trading-
related Exchange systems.
---------------------------------------------------------------------------

    \3\ Each time a member (including a floor member), person 
employed by or associated with such member or a member organization, 
or a PAU, fails to attend a mandatory training session, that missed 
training session will be deemed an ``occurrence'' as set forth on 
the EFPA F-30 and OFPA F-30 fine schedules.
---------------------------------------------------------------------------

    The Exchange also proposes to add the words ``and thereafter'' to 
EFPA F-30 to make the language in that fine schedule consistent with 
the language in the fine schedule in OFPA F-30 and, more specifically, 
to address how violations will be handled after the fourth violation on 
a three-year running calendar basis.
    Finally, the Exchange proposes to update the language in Exchange 
Rule 970 to provide that any authorized official of the Exchange may 
sign a citation for a floor procedure advice violation. The Exchange 
restructured its surveillance department and no longer has a department 
titled ``Market Surveillance Department.'' Therefore, amending Rule 970 
will delete the reference to the now-obsolete Market Surveillance 
Department and will allow any authorized Exchange officials to issue 
citations for violations of floor procedure advices.\4\ This should, in 
turn, promote efficiency in connection with the issuance of citations. 
Administration of the citation process will continue to be centralized 
so that citation issuance, payments, and appeals are tracked and 
managed consistently.
---------------------------------------------------------------------------

    \4\ Since the restructuring of the Exchange's surveillance 
department, which rendered the Market Surveillance Department 
obsolete, almost all of the citations for violations of floor 
procedure advices have been issued by authorized officials from the 
Exchange's Regulatory Group. The Exchange's Regulatory Group is 
comprised in part of individuals formerly in the Exchange's Market 
Surveillance Department. Telephone call between Cynthia Hoekstra, 
Vice President and Counsel, Exchange, and Kristie Diemer, Special 
Counsel, Division of Market Regulation, Commission, on June 11, 
2007.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \5\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \6\ in particular, in that it is designed to prevent 
fraudulent and manipulative practices, 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.
---------------------------------------------------------------------------

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

    Expanding the Exchange's current mandatory training program should 
provide a means for keeping members and persons employed by or 
associated with such members or member organizations, and PAUs, up-to-
date with, among other things, current rules and regulations and 
trading-related Exchange systems. Additionally, updating the language 
in Exchange Rule 970 should promote efficiency in connection with the 
issuance of citations.

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 not necessary or appropriate in 
furtherance of the purposes of the Act.

[[Page 33798]]

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or 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 Phlx 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 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 rule-comments@sec.gov. Please include 

File Number SR-Phlx-2007-16 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-Phlx-2007-16. 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 also will be available for inspection and copying at the 
principal office 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-Phlx-2007-16 and should be submitted on or before July 
10, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-11720 Filed 6-18-07; 8:45 am]

BILLING CODE 8010-01-P