[Federal Register Volume 60, Number 68 (Monday, April 10, 1995)]
[Notices]
[Pages 18160-18161]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8666]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35551; File No. SR-PSE-95-08]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change by the Pacific
Stock Exchange, Inc., Relating to Its Rules on Short Interest Reporting
March 30, 1995.
Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on February 22, 1995, the Pacific Stock Exchange, Inc. (``PSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II 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.
\1\15 U.S.C. 78s (b)(1)(1988).
\2\17 CFR 240.19b-4 (1994).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to make a technical amendment to its
rules on short interest reporting to allow members and member
organizations for which the Exchange is the designated examining
authority (``DEA'') to report their ``short'' positions to self-
regulatory organizations other than the Exchange. The text of the
proposed rule change is as follows, wherein additions are italicized:
Rule 2.6(f)--No change.
Commentary
.01 No Change.
.02 Members and member organizations for which the Exchange is the
DEA need not report ``short'' positions to the Exchange as provided in
Commentary .01 if such member or member organization has made
arrangements, satisfactory to the Exchange, to report such positions to
another self-regulatory organization.
The Exchange requests the Commission to find good cause, pursuant
to Section 19(b)(2) of the Act, for approving the proposed rule change
prior to the thirtieth day after publication in the Federal Register.
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 III 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
1. Purpose
On January 27, 1995, the Commission approved a rule change proposal
of the Exchange that requires members and member organizations for
which the Exchange is the DEA to report certain ``short'' positions to
the Exchange.\3\ The Exchange is proposing an amendment to
[[Page 18161]] that rule change to allow such members and member
organizations to report their ``short'' positions to self-regulatory
organizations other than the Exchange.
\3\See Exchange Act Release No. 35287 (January 27, 1995), 60 FR
6743 (February 3, 1995).
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Specifically, the Exchange is proposing to add a new Commentary .02
to Rule 2.6(f) to provide that members and member organizations for
which the Exchange is the DEA need not report short positions to the
Exchange as provided in Rule 2.6(f), Commentary .01, if such member or
member organization has made arrangements, satisfactory to the
Exchange, to report such positions to another self-regulatory
organization.
2. Statutory Basis
The Exchange believes the proposal is consistent with Section 6(b)
of the Act, in general, and Section 6(b)(5), in particular, in that it
is designed to protect investors and the public interest, to prevent
fraudulent and manipulative acts and practices, and to promote just and
equitable principles of trade.
B. Self-Regulatory Organization's Statement of Burden on Competition
The Exchange 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. 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. Sec. 552, will be available for inspection and copying at
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 PSE. All
submissions should refer to File No. SR-PSE-95-08 and should be
submitted by May 1, 1995.
IV. Commission's Findings and Order Granting Accelerated Approval
of Proposed Rule Change
The Commission finds that the PSE's proposal to adopt an
interpretation to its short interest position reporting rules
permitting a member to report such positions to another self-regulatory
organization, pursuant to an arrangement satisfactory to the Exchange,
is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange.
Specifically, the Commission finds that the proposed rule change is
consistent with Section 6(b)(5) of the Act.\4\ Section 6(b)(5)
requires, among other things, that the rules of an exchange be designed
to promote just and equitable principles of trade, to prevent
fraudulent and manipulative acts, and, in general, to protect investors
and the public. Further, the Commission notes that the Exchange has
represented that, as the Designated Examining Authority (``DEA''), the
Exchange will review compliance with its short interest rules during
each oversight examination. Such examinations are conducted on a
regular basis pursuant to the Exchange's status as DEA. Finally, the
Exchange's financial compliance office will modify its examination
module to ensure that the examiner checks for compliance with the short
interest reporting rules.\5\
\4\15 U.S.C. 78f(b)(5) (1988).
\5\Conversation between David Semak & Michael Pierson, PSE, and
Amy Bilbija, Commission, on March 24, 1995. The Exchange also
indicated that, currently, there is only one member firm that will
fall under the purview of the proposed amendment. The Exchange
anticipates that only in rare occasions other members will need to
make the arrangements provided for in the proposed rule change.
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The Commission believes that the PSE proposal to adopt Commentary
.02 as outlined above furthers the objectives of Section 6(b)(5) of the
Act in that it should facilitate the efficient reporting of short
interest positions without imposing an undue burden upon broker-
dealers.
The Commission finds good cause for approving the proposed rule
change prior the thirtieth day after the date of publication of notice
of filing thereof in the Federal Register. The Commission believes that
accelerated approval of the proposal is appropriate in order to allow
the PSE to ensure compliance with the short position reporting rules
implemented as of March 1, 1995. Further, the new short position
reporting procedure was noticed previously in the Federal Register for
the full statutory period and the Commission did not receive any
comments on it.\6\
\6\See Securities Exchange Act Release No. 35146 (December 23,
1994), 60 FR 518 (January 4, 1995).
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It is therefore ordered, pursuant to Section 19(b)(2)\7\ that the
proposed rule change is hereby approved.
\7\15 U.S.C. 78s(b)(2) (1988).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
\8\17 CFR 200.30-3(a)(12) (1994).
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[FR Doc. 95-8666 Filed 4-7-95; 8:45 am]
BILLING CODE 8010-01-M
