[Federal Register Volume 62, Number 158 (Friday, August 15, 1997)]
[Notices]
[Pages 43764-43766]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21593]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38912; File No. SR-PCX-97-23]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc.
(``PCX'' Relating to Revision of Membership Definitions in the PCX
Constitution and Clarifying Constitutional Transfer Language
August 8, 1997.
Pursuant to 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 July 23, 1997, the Pacific Exchange Inc. (``PCX'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'' or
``SEC'') the proposed rule change as described in Items I, II and III
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.
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\1\ 15 U.S.C. Sec. 78s(b)(1) (1988).
\2\ 17 CFR 240.19b-4 (1991).
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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 amend Articles V and VII of the
Constitution to reflect a Board and member vote to revise certain
membership definitions in the Constitution and to clarify the Transfer
of Membership Article in the Constitution. The text of the proposed
rule change is below. Additions are italicized; deletions are
bracketed.
[[Page 43765]]
Article V--Membership in the Exchange
para. 1351 Number of Memberships
Sec. 1. No change.
para. 1356 Privileges
Sec. 2. No change.
para. 1361 Definition of ``Member''
Sec. 3. The term ``member'' as used throughout the Constitution and
Rules of the Exchange shall refer to [mean] the natural person in whose
name the membership is held and who is in good standing. [An
``inactive'' member shall refer to a natural person who owns or
inherits a membership which they intend to keep for the sole purpose of
acting as a lessor.]
para. 1366 Definition of ``Member Firm''
Sec. 4. The term ``member firm'' as used throughout the
Constitution and Rules of the Exchange shall refer to [mean] a
partnership, corporation, limited liability company or other
organization in good standing who owns or leases a membership or upon
whom [which] a member has conferred privileges of [his] membership
pursuant to and in compliance with Article VIII of this Constitution.
para. 1369 Definition of ``Member Organization''
Sec. 5. The term ``member organization'' as used throughout the
Constitution and Rules of the Exchange shall refer to [mean] a sole
proprietor, partnership, corporation, limited liability company or
other organization in good standing who owns or leases a membership or
upon whom [which] a member has conferred privileges of membership
pursuant to and in compliance with Article VIII of this Constitution.
para. 1371 Definition of ``Allied Member''
Sec. 6. The term ``allied member'' as used throughout the
Constitution and Rules of the Exchange shall refer to a non-member, who
is:
[(I) A general partner in a member firm; or]
(1) [(ii)] An employee of a member firm who controls such member
firm, or [who is either:
(a) A director of such corporation; or
(b) A principal executive officer of such corporation.]
(2) An employee of a member firm corporation who is a director or a
principal executive officer of such corporation, or
(3) An employee of a member firm limited liability company who is a
manager or a principal executive officer of such limited liability
company, or
(4) A general partner in a member firm partnership;
and who has been approved by the Exchange as an allied member.
para. 1376 Definition of ``Associated Person''
Sec. 7. The term ``associated person'' as used throughout the
Constitution and Rules of the Exchange shall refer to a [means any]
person who is a partner, officer, director, member of a Limited
Liability Company, trustee of a Business Trust, [or] employee of a
member organization or any person directly or indirectly controlling,
controlled by or under common control with a member organization.
para. 1381 Definition of ``Floor Member'' [``Control'']
Sec. 8. The term ``floor member'' [``control''] as used throughout
the [in this] Constitution and Rules of the Exchange shall refer to an
individual, approved as a member of the Exchange, who meets the
qualification requirements for the purpose of exercising full trading
privileges on a floor of the Exchange on behalf of a member
organization [be defined in the Rules of the Board of Governors of the
Exchange].
para. 1382 Definition of ``Inactive Lessor''
Sec. 9. The term ``inactive lessor'' as used throughout the
Constitution and Rules of the Exchange shall refer to a natural person,
firm or other such entity as the Board may approve, who owns or
inherits a membership for the sole purpose of acting as a lessor.
para. 1383 Definition of ``Non-Resident Member Organization''
Sec. 10. The term ``non-resident member organization'' as used
throughout the Constitution and Rules of the Exchange shall refer to:
(1) In the case of an individual, one who resides in or has their
principal place of business in any place not subject to the
jurisdiction of the United States;
(2) In the case of a corporation, one incorporated in or having its
principal place of business in any place not subject to the
jurisdiction of the United States;
(3) In the case of a partnership or other unincorporated
organization or association, one having its principal place of business
in any place not subject to the jurisdiction of the United States.
* * * * *
Article VII--Transfer of Membership
para. 1451 Transfer
Sec. 1. Transfer of Membership in the Exchange must comply with the
provisions of Article VII [may be transferred by a member only in
accordance with the provisions of this Article VII and only to a person
whose application and election becomes effective under Article VI].
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 Exchange 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 Exchange 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
Purpose
The purpose of the proposed rule change to Article V is to revise
certain membership-related definitions in the Constitution. These
proposed revisions are the result of several PCX Board approvals and
member votes. Last year, the membership approved a comprehensive
revision to Rule 1 of the Board of Governors, placing all of the
relevant provisions relating to membership at the Exchange in a central
location in the PCX rules. This included moving any membership-related
definitions from various sections of the Constitution and placing them,
complete with revisions, all into Rule 1 with the other provisions
relating to membership. Prior to the actual proposed rule filing to
remove and revise these Constitutional definitions, some members
expressed concerns that these definitions should remain in the
Constitution so that any changes would have to be effected by a member
vote. Therefore, the Board approved the reinstatement of the revised
definitions back into the Constitution and the members agreed. This
proposed rule change revises the various sections of Article V of the
Constitution to reflect the revised definitions agreed upon pursuant to
the member votes and the Board approvals.
The purpose of the proposed change to Article VII, Section 1, is to
clarify the
[[Page 43766]]
language of the Article to clearly state that transfers of memberships
needed to be made pursuant to this Constitutional Article. When the new
Rule 1 was being revised, the Board and membership agreed to change the
language of Section 1, Article VII. The proposed change was viewed as
somewhat confusing by the membership. Consequently, after Board
approval and member vote, the Exchange is now proposing to change
Article VII so that it clearly states that transfers of membership must
comply with the provisions of Article VII in the Constitution.
Basis
Pursuant to Rule 19b-4(e)(3), the proposed rule change is concerned
solely with the administration of the Exchange. The proposed rule
change is consistent with Section 6(b) of the Act, in general, and
Section 6(b)(5), in particular, in that it is designed to promote just
and equitable principles of trade because the definitions, reflecting
the changes desired by the membership, will be consistent throughout
the PCX Constitution and Rules and a membership vote will be necessary
to approve any changes to these definitions.
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 Exchange has designated this proposal as concerned solely with
the administration of the Exchange under Section 19(b)(3)(A)(iii) of
the Act \3\ and subparagraph (e)(3) of Rule 19b-4,\4\ which renders the
proposed rule change effective on July 23, 1997, the date of receipt of
this filing by the Commission.
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\3\ 15 U.S.C. Sec. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(e)(3).
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At any time within sixty days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change it if
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. People 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 in
the Commission's Public Reference Room. Copies of the filing will also
be available for inspection and copying at the PCX's principal offices.
All submissions should refer to File No. SR-PCX-97-23 and should be
submitted by September 5, 1997.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\5\
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\5\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-21593 Filed 8-14-97; 8:45 am]
BILLING CODE 8010-01-M
