03-5571. Self Regulatory Organizations; Order Approving a Proposed Rule Change by the Pacific Exchange, Inc. To Confer or Delegate Jurisdiction for Certain Auto-Ex Determinations From the Options Floor Trading Committee to Two Floor Officials

March 3, 2003.

On February 11, 2002, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) ^[1] and Rule 19b-4 thereunder,^[2] the Pacific Exchange, Inc. (“PCX”) filed a proposed rule change with the Securities and Exchange Commission to amend PCX Rule 6.87 to confer or delegate jurisdiction for making certain day-to-day decisions with respect to the PCX's Automatic Execution System (“Auto-Ex”) from the PCX's Options Floor Trading Committee (“OFTC”) to two floor officials. On December 31, 2002, the PCX filed Amendment No. 1 to the proposed rule change, which replaced the original filing in its entirety. The proposed rule change, as amended, was published for comment in the Federal Register on January 17, 2003.^[3] The Commission received no comments on the proposal.

The Commission believes that the proposed rule change will enhance efficiency because it will allow the PCX the flexibility to grant exemptive relief and to make ad hoc decisions with respect to certain Auto-Ex matters without convening the full OFTC. 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, particularly Section 6 of the Act ^[4] and the rules and regulations thereunder.^[5] The Commission also finds that the proposed rule change will promote just and equitable principles of trade consistent with Section 6(b)(5) of the Act.^[6]

It is therefore ordered, pursuant to Section 19(b)(2) of the Act,^[7] that the proposed rule change (File No. SR-PCX-2002-09) be, and it hereby is, approved.

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.^[8]

Margaret H. McFarland,

Deputy Secretary.

Footnotes

1.  15 U.S.C. 78s(b)(1).

2.  17 CFR 240.19b-4.

3.  See Securities Exchange Act Release No. 47165 (January 10, 2003), 68 FR 2612 (January 17, 2003).

4.  15 U.S.C. 78f.

5.  In approving this proposed rule change, the Commission notes that it 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).

7.  15 U.S.C. 78s(b)(2).

8.  17 CFR 200.30-3(a)(12).