[Federal Register Volume 59, Number 135 (Friday, July 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17254]
[[Page Unknown]]
[Federal Register: July 15, 1994]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34342; File No SR-Phlx-91-20]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change and Amendment No. 1 to Proposed Rule Change by Philadelphia
Stock Exchange, Inc. Relating to Equity Floor Procedure Advice E-A-1--
Responsibility for Displaying Best Bid and Offer Prices
July 11, 1994.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. Sec. 78s(b)(1), notice is hereby given that on
July 15, 1991, the Philadelphia Stock Exchange, Inc. (``Phlyx'' of
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change and on June 23, 1994 filed
Amendment No. 1 to the proposed rule change as described in Items I, II
and III 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.
Self-Regulatory Organization's Statement of the Terms of Substance of
the Proposed Rule Change
The Phlx proposes to adopt Phlx Equity Floor Procedure Advice
(``EFPA'') E-A-1: Responsibility for Displaying Best Bid and Offer
Prices Established on the Equity Floor. The Text of the proposed new
advice is presented below:
E-A-1 Responsibility for Displaying Best Bid and Offer Prices
Established on the Equity Floor
(i) A Specialist shall use due diligence to ensure that the best
available bid price and offer price on the floor in each ``primary
stock issue'' assigned to him is properly and timely displayed for
dissemination purposes throughout the trading day.
(ii) A Specialist shall also use due diligence to ensure proper and
timely display of any bid or offer price of any order on the book in a
``secondary issue'' assigned to him for so long as such bid or offer is
equal or superior to the consolidated best bid or offer of those
disseminated by the national exchanges.
(iii) For the purposes of the above paragraphs, the fine schedule
below will apply in any instance of any exchange review which
identifies that five percent or more of such orders have not been
properly displayed in a timely fashion for the review period.
Fine Schedule
[Implemented on a three year running calendar basis]
------------------------------------------------------------------------
E-A-1
------------------------------------------------------------------------
1st Occurrence..................... $100.00
2nd Occurrence..................... 250.00
3rd Occurrence..................... 500.00
4th and Thereafter................. Sanction is discretionary with
Business Conduct Committee.
------------------------------------------------------------------------
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 land basis for the
proposed rule change and discussed any comments it received on the
proposed rule change. The test 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
1. Purpose
This new equity floor procedure advice codifies the due diligence
requirement of equity specialists imposed pursuant to SEC Rule 11Ac1-1
to display the best bid and offer available on the floor in their
assigned issues. The specialists' responsibility will be different for
primary stock issues and secondary market issues.
For stocks that are primary to this Exchange, a specialist's
responsibility will be to ensure that the best bid and offer voiced on
the floor of the Exchange in one of his assigned specialist issues is
properly and timely displayed for dissemination purposes throughout the
trading day. A primary stock issue is any issue dually listed with
another exchange for which the Phlx has traded the majority of exchange
volume over the previous six months or any issue listed on the Phlx
which is not listed on any other national exchange.
For those stocks in which the Phlx specialist makes a secondary
market, his responsibility is to ensure proper and timely display of
the best bid (or offer) so long as such bid (or offer) is equal or
superior to all other bids (or offers) reflected and disseminated at
the time by the national exchanges.
The Exchange has provided a fine schedule to be applied when an
Exchange review identifies five percent or more of such orders reviewed
over a designated time period to have not been properly displayed in a
timely manner. If at any time, however, an Exchange review reveals that
the amount of orders not timely displayed exceeds five percent by an
amount whereby it would be unreasonable to still consider the
infraction as minor, the staff may bring the matter to the Business
Conduct Committee to authorize a Statement of Charges and impose more
severe sanctions pursuant to Exchange Rule 970.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b)(5) of the
Act in that it is designed to prevent fraudulent and manipulative acts
and practices and to perfect the mechanism of a free and open market.
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 publication of this notice in the Federal
Register or within such other 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 self-regulatory organization consents, the Commission will:
(A) by order approve the 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, 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 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, NW.,
Washington, DC 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-91-20 and should be
submitted by August 5, 1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 94-17254 Filed 7-14-94; 8:45 am]
BILLING CODE 8010-01-M
