[Federal Register Volume 61, Number 206 (Wednesday, October 23, 1996)]
[Notices]
[Pages 55062-55063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27144]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37838; File No. SR-PHLX-96-42]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Philadelphia Stock Exchange, Inc., Relating to Limiting
Time for Submission of Settlement Offers
October 17, 1996.
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 27, 1996, 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
Currently, PHLX Rule 960.7, ``Offers of Settlement,'' allows a
respondent in any proceeding under the PHLX's disciplinary rules to
submit a written settlement offer to the Exchange's Business Conduct
Committee (``BCC'') at any time during the course of the proceeding.
The PHLX proposes to amend PHLX Rule 960.7 to limit the time when a
respondent may submit a written settlement offer to the BCC to within
120 calendar days immediately following the date of service of the
statement of charges upon the respondent. Under the proposal, the
Exchange may schedule a hearing during the 120-day period immediately
following the date of service of the statement of charges or as soon as
practicable thereafter. The BCC may consider a settlement offer
submitted after the 120-day period as long as consideration of the
offer does not delay the hearing in the matter.
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.
[[Page 55063]]
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 purpose of this proposal is to adopt a time limit during which
respondents involved in a disciplinary matter before the PHLX's BCC may
submit offers of settlement. Presently, under PHLX Rule 960.7, a
respondent may submit an offer of settlement at any time during the
course of the proceedings. Because the language allows for offers of
settlement to be submitted at any time, the BCC was concerned that
respondents could intentionally submit inadequate offers of settlement
for the sole purpose of delaying a scheduled hearing until the offer is
reviewed by the full BCC.
Thus, the Exchange proposes to amend PHLX Rule 960.7 in order to
allow offers of settlement to be submitted only during the 120-day
period immediately following the date of service of the statement of
charges upon a respondent. The BCC could then schedule hearings after
the 120 days knowing that there will not be last minute requests for
continuances based upon late offers of settlement. Under proposed
Interpretation and Policy .01, the BCC may also schedule a hearing
during the 120-day period immediately following the date of service of
the statement of charges on the respondent.\1\ The BCC will continue to
have the ability to entertain offers of settlement after the 120 days
if its review does not delay the scheduled hearing in the matter.
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\1\ Under PHLX Rule 960.5, ``Hearing,'' a respondent must be
given at least 15 business days notice of the time of a hearing.
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The PHLX believes that the proposed rule change is consistent with
Section 6 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, to foster cooperation and coordination with persons engaged
in regulating, clearing, settling, processing information with respect
to, and facilitating transactions in securities, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, as well as to protect investors and the public interest
by allowing for more expeditious completion of disciplinary matters.
(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 either received or requested.
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 reason for so finding or (ii) as to
which the self-regulatory organization 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. 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 the 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 file number SR-PHLX-96-42 and should be submitted by November
13, 1996.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\2\
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\2\ 17 CFR 200.30-3(a)(12) (1995).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-27144 Filed 10-22-96; 8:45 am]
BILLING CODE 8010-01-M
