[Federal Register Volume 59, Number 68 (Friday, April 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8401]
[[Page Unknown]]
[Federal Register: April 8, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33854; File No. SR-PSE-94-09]
Self-Regulatory Organizations; Filing and Order Granting
Accelerated Approval of Proposed Rule Change by the Pacific Stock
Exchange Relating to Extension of the Exchange's Lead Market Maker
System Pilot Program
April 1, 1994.
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 March
31, 1994, 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 Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The PSE requests an extension to its Lead Market Maker System
(``LMM'') Pilot program until September 30, 1994. 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. 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
Introduction
On January 17, 1990, the Commission approved, on a pilot basis, a
PSE proposal to establish a Lead Market Maker system in order to
enhance the ability of the Exchange to compete in a multiple trading
environment.
The Commission initially approved the LMM pilot program to continue
for eighteen months to July 31, 1991.\1\ The Commission has granted two
extensions to the pilot program in order for both the Commission and
PSE to more closely examine the functioning of the pilot program.\2\
The PSE has submitted pilot program reports to the Commission on
September 18, 1992 and July 26, 1993. On July 26, 1993, the Exchange
requested permanent approval of the pilot program.\3\ The PSE is
requesting this time extension in order to provide additional time for
evaluation of the program.
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\1\See Securities Exchange Act Release No. 27631 (January 17,
1990), 55 FR 2462 (January 24, 1990) (approving SR-PSE-89-27 and
Amendment No. 1 thereto) (``Pilot Approval Order'').
\2\See Securities Exchange Act Release No. 31063 (August 21,
1992), 57 FR 39255 (August 28, 1992); and Securities Exchange Act
Release No. 31635 (December 22, 1992), 57 FR 31635 (December 30,
1992).
\3\See File No. SR-PSE-93-16.
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The Exchange believes that the proposed rule change is consistent
with section 6(b) of the Act, in general, and furthers the objectives
of section 6(b)(5), in particular, in that it will promote just and
equitable principles of trade and will contribute to the protection of
investors and the public interest.
(B) Self-Regulatory Organization's Statement on 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. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
The PSE has requested that the proposed rule change be given
accelerated effectiveness pursuant to section 19(b)(2) of the Act.
The Commission finds that the proposed rule change to extend the
pilot program until September 30, 1994 is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange, and, in particular, the
requirements of Section 6 and the rules and requirements thereunder.\4\
The Commission concludes, as it did when approving the commencement of
the pilot program, that the PSE proposal may enhance the market-making
mechanism on the PSE, thereby improving the markets for listed options
on the Exchange. Specifically, the Commission believes the LMM pilot
may improve the PSE's market making capabilities by creating long-term
commitments to options classes. Moreover, the pilot program will
continue with adequate due process safeguards in the LMM selection and
termination procedures and retain procedures that prevent the misuse of
material non-public LMM information by either an LMM or a broker-dealer
affiliated with an LMM.
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\4\15 U.S.C. 78f(b) (1982).
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The Commission finds good cause for approving the proposed rule
change prior to the thirtieth day after the date of publication of
notice thereof in the Federal Register because the PSE has not
indicated that there have been any problems associated with the
operation of the LMM system. In addition, because the Commission has
not received any adverse comments concerning the Exchange's pilot
program, the Commission believes good cause exists to approve the
extension of the pilot program on an accelerated basis to allow it to
continue uninterrupted.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
argument concerning the foregoing. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 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 Commission's Public Reference Section, 450 Fifth
Street, NW., Washington, DC 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-94-09 and should
be submitted by April 29, 1994.
It is therefore ordered, Pursuant to section 19(b)(2) of the
Act,\5\ that the proposed rule change (File No. SR-PSE-94-09) is
approved through September 30, 1994.
\5\15 U.S.C. 78s(b)(2) (1982).
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\17 CFR 200.30-3(a)(12) (1993).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-8401 Filed 4-7-94; 8:45 am]
BILLING CODE 8010-01-M
