[Federal Register Volume 59, Number 199 (Monday, October 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-25556]
[[Page Unknown]]
[Federal Register: October 17, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34813; File No. SR-PHLX-94-45]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Philadelphia Stock
Exchange, Inc., Regarding Amendments to PHLX Rule 1015 and Floor
Procedure Advice A-11
October 7, 1994.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on
September 19, 1994, the Philadelphia Stock Exchange, Inc. (``PHLX'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II and III 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.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Paragraph (b), ``Trade or Fade'' of PHLX Rule 1015, ``Quotation
Guarantees,'' provides that, for non-public customer orders to buy
(sell) at the displayed offer (bid), or portions of customer orders
grater than the minimum size guarantee in that option, the trading
crowd must either: (1) Sell (buy) the number of contracts specified in
the order; or (2) change the displayed offer (bid) to reflect that the
previous displayed offer (bid) is no longer available. PHLX Rule
1015(b) also states that when the disseminated market quote is revised,
it shall be considered inconsistent with just and equitable principles
of trade for the trading crowd to immediately re-display the previously
disseminated market quote, unless such action is warranted by a change
in market conditions. The PHLX proposes to amend Floor Procedure Advice
(``Advice'') A-11, ``Responsibility to Make Ten-Up Markets,'' to add
the ``trade or fade'' language of PHLX Rule 1015(b) to Advice A-11. In
addition, the PHLX proposes to add the phrase ``in any options series
on the Exchange'' to PHLX Rule 1015(a) in order to clarify the rule.
The text of the proposed rule change is available at the Office of
the Secretary, PHLX, and at the Commission.
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 IV 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
The PHLX states that the purpose of the proposal is to amend Advice
A-11 to correspond to PHLX Rule 1015. PHLX Rule 1015, which was amended
recently,\1\ mirrors the text of Advice A-11 and also adds a trade or
fade provision. Because Advice A-11 was also amended recently,\2\ the
text of Advice A-11 was in flux when new PHLX Rule 1015 was adopted,
and, accordingly, did not contain the trade or fade language approved
therein. Otherwise, PHLX Rule 1015 tracks the text of Advice A-11 and
was intended to incorporate the procedures of Advice A-11 into a
specific PHLX rule.
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\1\See Securities Exchange Act Release No. 34434 (July 22,
1994), 59 FR 39007 (August 1, 1994) (order approving File No. SR-
PHLX-94-30).
\2\See Securities Exchange Act Release No. 34400 (July 19,
1994), 59 FR 38011 (July 26, 1994) (order approving File No. SR-
PHLX-91-45).
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At this time, the text of Advice A-11 no longer mirrors PHLX Rule
1015. In order to rectify this, the PHLX proposes to add two paragraphs
to Advice A-11, which appears for advisory purposes in the PHLX's Floor
Procedure Advice Handbook. In addition, the PHLX proposes a minor
amendment to PHLX Rule 1015 to add the phrase ``in any option series on
the Exchange,'' which appears in the first paragraph of Advice A-11.
The PHLX also proposes to amend Advice A-11 by labeling paragraph (a)
as ``Quotation Guarantees.'' The PHLX states that PHLX Rule 1015(a) was
adopted without this particular phrase.
The PHLX believes that the proposal is consistent with Section 6(b)
of the Act, in general, and, in particular, with Section 6(b)(5), in
that it is designed to promote just and equitable principles of trade,
to prevent fraudulent and manipulative acts and practices, and to
protect investors and the public interest by copying the text of the
trade or fade provisions in PHLX Rule 1015(b) to Advice A-11.
(B) Self-Regulatory Organization's Statement on Burden on Competition
The PHLX does not believe that the proposed rule change will impose
any inappropriate burden on competition.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others
No written comments were solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change constitutes a stated policy, practice or
interpretation with respect to the administration of an existing PHLX
rule. Specifically, the proposal modifies Advice A-11 by adding
paragraph (b), ``Trade or Fade,'' to make Advice A-11 consistent with
PHLX Rule 1015. In addition, the proposal clarifies PHLX Rule 1015(a)
by adding the phrase ``in any options series on the Exchange'' to the
rule; the proposal also clarifies Advice A-11 by adding the heading
``Quotation Guarantees'' to paragraph (a) of Advice A-11. Accordingly,
the proposal has become effective pursuant to Section 19(b)(3)(A) of
the Act and subparagraph (e) of Rule 19b-4 thereunder. At any time
within 60 days of the filing of such proposed rule change, the
Commission may summarily abrogate such rule change if it appears to the
Commission that such action is necessary or appropriate in the public
interest, for the protection of investors, or otherwise in furtherance
of the purposes of the Act.
IV. 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. 552, will be available for inspection and copying at the
Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. Copies of such filing will also be available for
inspection and copying at the principal office of the above-mentioned
self-regulatory organization. All submissions should refer to the file
number in the caption above and should be submitted by November 7,
1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\3\
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\3\17 CFR 200.30-3(a)(12) (1993).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-25556 Filed 10-14-94; 8:45 am]
BILLING CODE 8010-01-M
