[Federal Register Volume 64, Number 10 (Friday, January 15, 1999)]
[Notices]
[Pages 2694-2695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-923]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40888; File No. SR-PCX-98-57]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Pacific Exchange, Inc. To Amend Equity Floor Procedure
Advice 2-C To Remove an Exception Regarding Trade Reporting
Responsibilities
January 6, 1999.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'' or ``Act''),\1\ notice is hereby given that on
November 6, 1998, 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 PCX. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
PCX is proposing to change Equity Floor Procedure Advice 2-C.
Specifically, the Exchange proposes to delete the second exception to
Rule 5.12 in Equity Floor Procedure Advice 2-C. Below is the text of
the proposed rule change. Proposed new language is in italics and
deletions are in [brackets].
* * * * *
EQUITY FLOOR PROCEDURE ADVICES
* * * * *
2-C
para. 7630 Subject: Reporting of Transactions Executed at the Exchange
Rule 5.12(a) [I, Section 16(a), of the Rules of the Board of
Governors of the Pacific Exchange, Inc.] provides that the seller is
responsible for ensuring that a transaction executed at the Exchange
is properly recorded. This requirement is subject to the following
[two] exception[s]: [1. ]Pursuant to Rule 5.12(b), [I, Section
16(b),] inter-floor ``limit sell orders'' are to be reported from
the floor on which the order was placed and executed.
[2. Transactions in local issues in which the specialist acts as
the buyer and the seller is located on the opposite trading floor
are to be promptly reported to the tape by the specialist. The
seller is required to submit a ``goldenrod'' ticket to report the
transaction for clearing purposes only.]
The Exchange has found that this [these] exception[s] to the
general reporting procedures occasionally results in transactions
not being reported to the tape. Because it is essential that all
trades executed at the Exchange be promptly reported for
dissemination to the Exchange community and the public, violations
of the trade reporting requirements will be investigated and may
result in the imposition of fines or other disciplinary action.
The following schedule will serve as a guideline for penalties
to be imposed for violations of this floor procedure advice:
1st Violation: Official Warning
2nd Violation: $250.00
3rd Violation: $500.00
This schedule is based on the number of violations for a
particular security, calculated on a monthly basis. This schedule is
intended to apply to inadvertent violations of this [the] floor
procedure advice that [which] are not attributable to clerical
errors by Exchange staff or other mitigating circumstances. In cases
of deliberate violations or other aggravated circumstances, other
disciplinary action may be deemed to be appropriate.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, PCX 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. PCX has prepared summaries, set forth in Sections A, B,
and C below, of the most significant aspects of such statements.
[[Page 2695]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Currently, PCX Rule 5.12 states that ``The seller shall be
responsible for transactions being promptly recorded by the floor
reporters.'' This requirement is subject to two exceptions in Equity
Floor Procedure Advice 2-C, the second of which holds that,
``transactions in local issues in which the specialist acts as the
buyer and the seller is on the opposite trading floor are to be
promptly reported to the tape by the specialist. The seller is required
to submit a `goldenrod' ticket to report the transaction for clearing
purposes only.''
The PCX proposes to delete the second exception to Rule 5.12 in
Equity Floor Procedure Advice 2-C so that the general requirement in
Rule 5.12 of seller responsibility shall apply. The Exchange believes
that the conditions underlying the original exception have changed and
that there is no longer any reason to exempt these types of
transactions from the basic requirement. The PCX believes that the
deletion of this exception will make the obligation to report
transactions consistent with the general requirement that sellers
report the trades.
2. Statutory Basis
PCX believes the proposed rule change is consistent with Section
6(b) \2\ of the Act, in general, and furthers the objectives of Section
6(b)(5),\3\ in particular, because it is designed to perfect the
mechanism of a free and open market, to promote just and equitable
principles of trade, and to protect investors and the public interest.
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\2\ 15 U.S.C. 78f(b).
\3\ 15 U.S.C. 78f(b)(5).
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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 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. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
Within 35 days of the 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 the 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. 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. 552, will be available for inspection and copying at the
Commission's Public Reference Room. Copies of such filing also will be
available for inspection and copying at the principal office of PCX.
All submissions should refer to File No. SR-PCX-98-57 and should be
submitted by February 5, 1999.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\4\
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\4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-923 Filed 11-14-99; 8:45 am]
BILLING CODE 8010-01-M
