[Federal Register Volume 61, Number 58 (Monday, March 25, 1996)]
[Notices]
[Pages 12126-12127]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7067]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36984; File No. SR-PSE-96-02]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change and Amendment No. 1 to the Proposed Rule Change by the Pacific
Stock Exchange, Inc., Relating to the Composition of the Exchange's
Options Listing Committee
March 18, 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 January
16, 1996, the Pacific Stock Exchange, Inc. (``PSE'' 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.\1\ The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
\1\ On March 11, 1996, the PSE provided additional information
concerning the purpose of the proposal. Specifically, the PSE
explained that the proposal is designed to make Commentary .01 to
PSE Rule 11.10(d), ``Options Listing Committee,'' easier to follow
and to prevent legal appeals of Options Listing Committee (``OLC'')
decisions on the technical argument that the OLC was not authorized
to act because its composition did not conform to the rigid
requirements of PSE Rule 11.10(d), Commentary .01. According to the
PSE, such an appeal could be made currently if, for example, a non-
floor broker is placed in one of the floor broker slots on the OLC
because of a shortage of floor brokers willing to serve on the OLC,
or if a floor broker on the OLC becomes a market marker mid-year and
the OLC decides to retain that member on the OLC. The PSE expects
that, under the proposal, the OLC will be composed as specified in
Commentary .01 under virtually all circumstances. The Exchange
represents that it intends to comply with the spirit of the
Commentary and anticipates departures from this general rule only in
exceptionally rare circumstances. See Letter from Michael D.
Pierson, Senior Attorney, Market Regulation, PSE, to Michael
Walinskas, Branch Chief, Options Regulation, Division of Market
Regulation, Commission, dated March 11, 1996 (``Amendment No. 1'').
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Currently, Commentary .01 to PSE Rule 11.10(d) provides that the
OLC shall be comprised of (i) four floor brokers; (ii) five market
makers or lead market makers; and (iii) one member of the PSE or a
general partner or officer of a member organization, or any other
person who is considered to be qualified. The PSE proposes to amend PSE
Rule 11.10(d), Commentary .01, to provide that the Exchange will
attempt, but will not be required, to maintain the composition of the
OLC as provided currently under Commentary .01.
The text of the proposed rule change is available at the Office of
the Secretary, PSE 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
[[Page 12127]]
most significant aspects of such statements.
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
Purpose
The PSE proposes to amend PSE Rule 11.10(d), Commentary .01,
Commentary .01 currently provides that the OLC shall be comprised of
(i) four floor brokers; (ii) five market makers or lead market makers;
and (iii) one member of the PSE or a general partner or officer of a
member organization, or any other person who is considered to be
qualified.
The Exchange proposes to amend Commentary .01 by eliminating the
phrase ``shall be comprised of'' and replacing it with a provision
stating that ``attempts shall be made'' in order for the OLC to have a
composition that includes those currently specified in subsections (i)
through (iii).
The Exchange believes that Commentary .01 is overly restrictive and
that the proposal is appropriate in order to allow for greater
flexibility in the committee selection procedure and the process for
replacing committee members who resign or change their floor status.
The proposal is designed to make Commentary .01 easier to follow and to
prevent members from appealing decisions of the OLC on the grounds that
the OLC was not authorized to act because its composition did not
conform to the requirements of Commentary .01. The PSE represents that
the Exchange will make every effort to ensure that the OLC maintains
the composition specified in Commentary .01. The Exchange expects that,
under the proposal, the composition of the OLC will remain as specified
currently in Commentary .01 in virtually all circumstances.\2\
\2\ See Amendment No. 1, supra note 1.
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Statutory Basis
the PSE believes that the proposal is consistent with Section 6(b)
of the Act, in general, and with Section 6(b)(5), in particular, in
that it promotes just and equitable principles of trade, and with
Section 6(b)(4), in particular, in that it assures a fair
representation of members in the administration of the affairs of the
Exchange.
(B) Self-Regulatory Organization's Statement on Burden on Competition
The PSE does not believe that the proposed rule change will impose
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received from Members, Participants or Others
Written comments on the proposed rule change were neither solicited
nor 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 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 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 April 15, 1996.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\3\
\3\ 17 CFR 200.30-3(a)(12) (1995).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-7067 Filed 3-22-96; 8:45 am]
BILLING CODE 8010-01-M
