

[Federal Register: January 13, 2006 (Volume 71, Number 9)]
[Notices]               
[Page 2286]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13ja06-145]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53070; File No. SR-Phlx-2005-63

 
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Order Granting Approval to Proposed Rule Change Relating to the 
Prohibition of Trade Shredding

January 6, 2006.

I. Introduction

    On October 25, 2005, the Philadelphia Stock Exchange, Inc. 
(``Phlx'' or ``Exchange'') 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 
thereunder,\2\ the proposed rule change relating to the prohibition of 
trade shredding. The proposed rule change was published for comment in 
the Federal Register on December 5, 2005.\3\ The Commission received no 
comments on the proposal. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 52834 (November 25, 
2005), 70 FR 72492.
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II. Description of the Proposal

    The Exchange proposed to amend Rule 707, Conduct Inconsistent with 
Just and Equitable Principles of Trade, to prohibit members, member 
organizations and persons associated with or employed by a member or 
member organization from unbundling orders for execution for the 
primary purpose of maximizing a monetary or like payment to the member, 
member organization, or person associated with or employed by a member 
or member organization.

III. Discussion and Commission Findings

    The Commission has reviewed carefully the proposed rule change and 
finds that it is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange,\4\ particularly Section 6(b)(5) of the Act which, among other 
things, requires that the rules of a national securities exchange be 
designed to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating 
securities transactions, to remove impediments to perfect the mechanism 
of a free and open market and a national market system and, in general, 
to protect investors and the public interest.\5\ The Commission 
believes that the proposed rule change should help eliminate the 
distortive practice of trade shredding, and, therefore, promote just 
and equitable principles of trade.
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    \4\ In approving this 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).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\6\ that the proposed rule change (File No. SR-Phlx-2005-63), be 
and hereby is, approved.
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    \6\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-256 Filed 1-12-06; 8:45 am]

BILLING CODE 8010-01-P
