Self-Regulatory Organizations; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change by the Pacific Exchange, Inc. Relating to the Definition of Local Securities

[Federal Register Volume 64, Number 194 (Thursday, October 7, 1999)]
[Notices]
[Pages 54716-54717]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-26161]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41921; File No. SR-PCX-99-21]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change by the Pacific 
Exchange, Inc. Relating to the Definition of Local Securities

September 27, 1999.
    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 June 16, 1999, the Pacific Exchange, Inc. (``PCX'' 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 and to grant accelerated approval to the 
proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The PCX proposes to revise its current definition of ``Local 
Security'' as defined in PCX Rule 4.1(m). The text of the proposed rule 
follows. New text is in italics; deletions are in brackets.
para. 3697  Definitions and Trading Hours
    Rule 4.1 (a)-(1)  No Change.
    (m) ``Local Security'' [shall] means a security admitted to 
dealings on the Exchange which is not also admitted to dealings on 
[either the New York or American Stock Exchanges] any other national 
securities exchange or national association as those entities are 
defined or recognized under the terms of the Securities Exchange Act of 
1934.
    (n) No Change.

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 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
    The exchange proposes to revise its current definition of ``Local 
Security'' as defined in PCX Rule 4.1(m). Currently, PCX Rule 4.1(m) 
defines ``Local Security'' as ``security admitted to dealings on the 
Exchange which is not also admitted to dealings on either the New York 
Stock Exchange (``NYSE'') or the American Stock Exchange (``AMEX'').''
    The Exchange proposes to revise Rule 4.1(m) to narrow the 
definition of local security to include only securities admitted to 
dealings on the Exchange that are not also admitted to dealings on any 
other national securities exchange or national securities association. 
Specifically, under the proposed rule change, ``local security'' is 
defined as ``a security admitted to dealings on the Exchange which is 
not also admitted to dealings on any other national securities exchange 
or national securities association as those entities are defined or 
recognized under the terms of the Securities Exchange Act of 1934.'' 
The Exchange believes this rule change more accurately reflects the 
intended definition of local security as a security traded exclusively 
on the PCX. Thus, the new definition excludes securities currently 
within the local securities definition that are actually traded in 
marketplaces other than the PCX, NYSE or AMEX.
2. Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) \3\ of the Act, in general, and furthers the objectives of 
Section 6(b)(5) \4\ in particular, because it is designed to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, and to remove impediments and perfect the mechanisms of a 
free and open market and a national market system and to protect 
investors and the public interest.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
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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

[[Page 54717]]

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

    The exchange did not solicit or receive written comments on the 
proposed rule change.

III. Discussion

    The Commission finds that the proposed rule change 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(b)(5) of the Act \5\ which 
states that, among other things, the rules of an exchange must be 
designed to facilitate securities transactions and to remove 
impediments to and perfect the mechanism of a free and open market.\6\
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    \5\ 15 U.S.C. 78f(b)(5).
    \6\ In approving this rule, the Commission notes that it has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
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    Pursuant to Section 19(b)(2) of the Act,\7\ the Commission finds 
good cause for approving the proposed rule change prior to the 30th day 
after the date of publication of notice of filing thereof in the 
Federal Register in that accelerated approval will enable the Exchange 
to clarify its intended definition of a local security as a security 
traded exclusively on the PCX, and will ensure that members and 
customers rely on an accurate definition of the term. The Commission 
believes that the proposed rule change more accurately reflects today's 
markets and the intended definition of the term.
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    \7\ 15 U.S.C. 78s(b)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. 
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. 552, will be available for inspection and copying in the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
PCX. All submissions should refer to File No. SR-PCX-99-21 and should 
be submitted by October 28, 1999.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) \8\ of the 
Act, that the proposed rule change (SR-PCX-99-21) be, and hereby is, 
approved.

    \8\ 15 U.S.C. 78s(b)(2).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 99-26161 Filed 10-6-99; 8:45 am]
BILLING CODE 8010-01-M