01-10886. Self-Regulatory Organizations; Order Approving Proposed Rule Change by the Philadelphia Stock Exchange, Inc. Relating to Primary Trading Session Hours for Equities Whose Primary Market Is Not the Exchange

April 23, 2001.

On March 16, 2001, the Philadelphia Stock Exchange, Inc. (Phlx) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) ^[1] and Rule 19b-4 ^[2] thereunder, a proposal to amend Phlx Rule 101 to establish the Primary Trading Session hours of securities whose primary market is not Phlx. On March 28, 2001, the Commission published the proposed rule change in the Federal Register.^[3] The Commission received no comments on the proposal. This order approves the proposed rule change.

The Commission finds that the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange.^[4] In particular, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act which requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade; to facilitate transactions in securities; to remove impediments to and perfect the mechanisms of a free and open market and a national market system; and, in general, to protect investors and the public interest.^[5]

Many securities are traded on Phlx pursuant to unlisted trading privileges (“UTP”). The proposed rule change would make the hours of the Phlx Primary Trading Session for these securities the same hours that they are traded on their primary markets (except if the primary market is PCX Equities, Inc.). The Commission has previously stated that, absent any regulatory concerns, the decision to change an exchange's trading hours is a matter that falls within the business discretion of the exchange.^[6] The Commission does not believe that the proposal raises any regulatory concerns and notes that no comments on the proposal were submitted. In addition, although the proposed rule change will not affect the current equity trading hours on Phlx, the hours of Phlx's Primary Trading Session will automatically change whenever the hours of a primary market change, thereby alleviating the need for additional rule changes. Accordingly, the Commission concludes that Phlx's proposal is reasonable and consistent with the Act.

It is therefore ordered, pursuant to Section 19(b)(2) of the Act,^[7] that the proposed rule change (SR-Phlx-01-21) 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. 44088 (March 20, 2001), 66 FR 16966.

4.  In approving the proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f).

5.  15 U.S.C. 78f(b)(5).

6.  See, e.g., Securities Exchange Act Release No. 38766 (June 24, 1997), 62 FR 35244, 35245 (June 30, 1997) (approving proposal by the Pacific Exchange to change the closing time of its equity floor from 1:50 to 1:30 Pacific Time).

7.  15 U.S.C. 78s(b)(2).

8.  17 CFR 200.30-3(a)(12).