[Federal Register Volume 64, Number 39 (Monday, March 1, 1999)]
[Notices]
[Pages 10053-10054]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-4956]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41081, File No. SR-Phlx-98-46]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.,
Order Approving Proposed Rule Change Amending Rule 229, Philadelphia
Stock Exchange Automatic Communication and Execution System, Raising
the Minimum Order Delivery Requirement for Specialists from 1099 Shares
to 2099 Shares
February 22, 1999.
I. Introduction
On November 12, 1998, the Philadelphia Stock Exchange, Inc.
(``Phlx'' or ``Exchange'') submitted to the Securities and Exchange
Commission (``Commission'' or ``SEC''), 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 Phlx Rule 229 raising
the minimum order delivery requirement for specialists from 1099 shares
to 2099 shares on the Exchange Automatic Communication and Execution
System (``PACE'').\3\ Notice of the proposed rule change appeared in
the Federal Register on January 7, 1999.\4\ The Commission received no
comments on the proposal. This order approves the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ PACE is the Exchange's automatic order routing and execution
system for securities on the equity trading floor. See Phlx. Rule
229.
\4\ See Securities Exchange Act Release No. 40842 (December 28,
1998), 64 FR 1061.
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II. Description of the Proposal
Specialists are required to accept orders sent by members for
automatic execution on the PACE system up to the minimum order delivery
requirement set forth in Phlx Rule 229. The Exchange proposed to amend
Phlx Rule 229 to raise the minimum order delivery requirement for
specialists from 1099 shares to 2099 on the PACE system. Thus,
specialists will be required to accept PACE orders of up to 2099
shares.
[[Page 10054]]
Phlx Rule 229, Supplementary Material .06 through .10 previously
required specialists to accept orders of 1099 shares in the following
situations: (i) Section 229.06--market orders entered before the New
York market opening; (ii) Section 229.07(b)--market orders entered
after the New York market opens; and (iii) Sections 229.10(b)-(c)--the
method of execution given to PACE orders. The Exchange proposed to
increase the minimums contained in these sections to 2099 shares. Under
the proposal, specialists will continue to be able to raise their own
minimum delivery requirements for individual stocks to level higher
than the proposed minimum of 2099 shares.
III. Discussion
After careful review, 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.\5\
In particular, the Commission believes the proposal is consistent with
Section 6(b)(5), which requires that the rules of an exchange be
designed to promote just and equitable principles of trade, to remove
impediments and to perfect the mechanism of a free and open market and
a national market system, and, in general, to protect investors and the
public interest.\6\ The Commission believes that the proposed 2099
share minimum guaranteed order delivery size is reasonable and may
benefit investors by providing them with the flexibility to deliver
large sized orders to the specialist for automatic execution through
PACE. The Commission further notes that specialists may voluntarily
increase the minimum guaranteed order delivery size on an issue by
issue basis.
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\5\ In approving this rule, the Commission has considered the
proposed rule's impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
\6\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion
For the foregoing reasons, the Commission believes that the
proposed rule change is consistent with the Act and the rules and
regulations thereunder applicable to a national securities exchange,
and, in particular, with section 6(b)(5).\7\
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\7\ 15 U.S.C. 78f(b)(5).
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It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (SR-Phlx-98-46) is approved.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-4956 Filed 2-26-99; 8:45 am]
BILLING CODE 8010-01-M
