[Federal Register Volume 63, Number 49 (Friday, March 13, 1998)]
[Notices]
[Pages 12569-12571]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-6529]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39722; File No. SR-PHLX-97-46]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Philadelphia Stock Exchange, Inc. Relating to Proposed
By-Law Amendments to Article IV, Section 4-8, Article V, Section 5-5,
and Article XXII, Section 22-1
March 4, 1998.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 12570]]
(``Act''),\1\ notice is hereby given that on February 11, 1998, 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.\2\ 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).
\2\ The Phlx had originally submitted the filing on December 10,
1997; however, the portion of the filing containing proposed changes
to the By-Law language (currently Exhibit A) was not included in the
filing. At the Commission's request, the Phlx provided the proposed
By-Law language. The Phlx made a complete filing on February 11,
1998. On February 13, 1998, the Phlx submitted Amendment No. 1 to
the filing, in which it made technical corrections to the language
contained in Exhibit A and provided support for the proposed changes
to the By-Laws. See Letter from Murray L. Ross, Vice President and
Secretary, Phlx, to Marie Ito, Special Counsel, Division of Market
Regulation, Commission, dated February 13, 1998.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Phlx, pursuant to Rule 19b-4 of the Act, seeks to amend By-Law
Article IV, Section 4-8, the Disqualification of Governors; Article V,
Section 5-5, Acting Chairman and Vacancies in the Office of Chairman or
Vice Chairman; and Article XXII, Section 22-1, Amendment the By-Laws.
The text of the proposed rule change is attached as Exhibit A.
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. 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 is proposing an amendment to Article IV, Section 4-8 of
the Phlx By-Laws in order to apply the Phlx Code of Conduct to members
of the Board of Governors and to members of Standing Committees,
Special Committees, and Subcommittees thereof. In addition, the
Exchange proposes to amend Article V, Section 5-5, to provide a
mechanism to designate the Chief Operating Officer or another Senior
Officer to assume the duties of Chairman on an interim basis in
circumstances of an extended absence or inability of the Chairman to
serve. The Exchange also proposes to amend Article XXII, Section 22-1
to clarify the procedures with respect to the submission of amendments
to the By-Laws. This proposed amendment to Section 22-1 would raise
from fifty to seventy-five the number of Phlx members required to offer
an amendment to the By-Laws; would lengthen from two weeks to four
weeks the time period in which a vote on a proposed amendment must be
held; and would establish the date of the submission of the proposed
amendment as the record date for determining the eligibility of members
to vote on the proposed amendment. The proposal also changes the
requirement that the proposed amendment be submitted to the Board.
Under the proposal, the proposed amendment will be submitted to the
Secretary.
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, 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. The proposed
change to Article IV, Section 4-8 is intended to prevent potential
conflicts of interest and to apply the Code of Conduct not only to
members of the Board of the Exchange, but also to Standing Committees
and Subcommittees thereof. In addition, the proposed amendments to
Article V, Section 5-5 of the By-Laws are designed to provide a
mechanism for designating the Chief Operating Office or another senior
officer as the persons responsible for assuming the duties of the
Chairman on an interim basis, and would define an ``extended absence''
and an ``inability to act'' of the Chairman of the Board. The proposed
amendments to Section 22-1 of Article XXII of the By-Laws would clarify
the procedures for offering amendments to the By-Laws, thereby
fostering cooperation and coordination with respect to Exchange
administration and governance.\3\
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\3\ See Amendment No. 1, cited in note 2, above.
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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 solicited or received.
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 reasons for so finding or (ii) as to
which the Phlx 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, including whether the proposal 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 in the Commission's
Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549. Copies of such filing will also be available for inspection and
copying at the principal office of the Phlx. All submissions should
refer to File No. SR-Phlx-97-46 and should be submitted by April 3,
1998.
[[Page 12571]]
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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Johathan G. Katz,
Secretary.
Exhibit A
New text is in italics; deleted text is bracketed.
Article IV--Board of Governors; Disqualification of Governors
Sec. 4-8. No Governor shall be disqualified from participating
in any meeting, action or proceeding of the Board of Governors by
reason of being or having been a member of a Standing or Special
Committee which has made prior inquiry, examination or investigation
of the subject under consideration. Nor shall any member of any such
Committee be disqualified by reason of such membership from acting
as a Governor upon an appeal from a decision of any such Committee.
[But no person shall] Pursuant to the Exchange's Code of Conduct, no
member of the Board of Governors or of any committee or subcommittee
shall in any manner, directly or indirectly, participate in the
[determination of any matter in which he is personally interested.]
determination of any matter substantially affecting his or her
interest or the interests of any person in whom he or she is
directly or indirectly interested. In any such case, the particular
member shall disqualify himself or herself, or shall be disqualified
by the Chair of the Board or chair of the relevant committee or
subcommittee.
Article V--Chairman, Vice Chairman, and Officers of the Exchange;
Acting Chairman and Vacancies in Office of Chairman or Vice
Chairman
Sec. 5-5. During the extended absence or inability to act of the
Chairman of the Board, the Board shall designate [either of the Vice
Chairmen to assume the presiding officer of the Board functions and]
the Chief Operating Officer or another senior officer to assume the
duties of the Chairman on an ad interim basis. An extended absence
or inability to act of the Chairman of the Board will occur if the
Chairman is unable to fulfill his or her duties for a period longer
than four weeks. The Board of Governors shall select a successor to
the Chairman of the Board if that office becomes permanently vacant.
In case a vacancy shall occur in the office of either of the Vice
Chairmen, the Nominating Committee shall select a successor to serve
the remainder of the unexpired term, subject to approval by the
Board.
Article XXII--Amending the By-Laws; Amendments to By-Laws
Sec. 22-1. Whenever [fifty] Seventy-five members of the Exchange
shall offer, in writing, any amendment to the By-Laws, it shall be
submitted to the [Board of Governors, who shall, within two weeks
after the proposed amendment is filed with the Secretary of the
Exchange,] Secretary of the Exchange, who shall submit it to the
membership for vote thereon by ballot[, under such regulations as
the Chairman of the Board, with the approval of the Board of
Governors, may direct]. The vote shall be conducted within four
weeks of the date of such submission. The record date for
determining members entitled to vote on such amendment shall be set
as the date of the submission. Each member of the Exchange in good
standing may vote in person or by proxy. If the number of members
participating in the balloting exceeds one-half of the number of
memberships then outstanding and the proposed amendment is approved
by the affirmative vote of a majority of the votes cast, it shall
thereupon become a part of the By-Laws.
[FR Doc. 98-6529 Filed 3-12-98; 8:45 am]
BILLING CODE 8010-01-M
