

[Federal Register: February 9, 2006 (Volume 71, Number 27)]
[Notices]               
[Page 6811]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09fe06-96]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53221; File No. SR-PCX-2005-102]

 
Self-Regulatory Organizations; Pacific Exchange, Inc.; Order 
Granting Approval of Proposed Rule Change and Amendment No. 1 Thereto 
Relating to the Elimination of Obsolete Rules Related to the Pacific 
Options Exchange Trading System and Order Book Officials

February 3, 2006.
    On November 10, 2005, the Pacific Exchange, Inc. (``PCX'' 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\ a 
proposed rule change to eliminate obsolete rules related to the Pacific 
Options Exchange Trading System (``POETS'') and Order Book Officials 
(``OBOs''). On November 22, 2005, PCX filed Amendment No. 1 to the 
proposed rule change.\3\ The proposed rule change was published for 
comment in the Federal Register on December 21, 2005.\4\ The Commission 
received no comments on the proposal. This order approves the proposed 
rule change, as amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Partial Amendment, submitted by Glenn H. Gsell, Director 
of Regulation, PCX (``Amendment No. 1''). In Amendment No. 1, PCX 
corrected a typographical error in the rule text.
    \4\ See Securities Exchange Act Release No. 52955 (December 14, 
2005), 70 FR 75851 (December 21, 2005) (``Notice'').
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    The proposed rule change, as amended, would modify the PCX Rules to 
eliminate obsolete rules with respect to POETS and OBOs and make 
corresponding changes to related rules. As of March 2005, the Exchange 
completed its rollout of the PCX Plus System.\5\ As such, options 
issues no longer trade on the POETS platform at the Exchange. 
Therefore, the Exchange proposes to eliminate rules related to POETS, 
including rules regarding OBOs, and to generally modify the rules as 
applicable in the current PCX Plus market structure.\6\ In connection 
with the proposed elimination of OBOs, the Exchange proposes to revise 
the definition of ``Trading Official'' to no longer permit OTP Holders 
to serve in this capacity and to clarify the responsibilities of 
Trading Officials.
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    \5\ See Securities Exchange Act Release No. 47838 (May 13, 
2003), 68 FR 27129 (May 19, 2003) (Order Approving Proposal for PCX 
Plus).
    \6\ A full description of the rules that are being deleted or 
modified pursuant to this proposal can be found in the Notice, supra 
note 4.
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act \7\ and the rules and regulations 
thereunder applicable to a national securities exchange,\8\ 
particularly Section 6(b)(5) of the Act,\9\ which requires, among other 
things, that the Exchange's rules be 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 to and perfect the mechanism of a free and open 
market and a national market system and to protect investors and the 
public interest. The Commission believes that the proposed rule change 
clarifies the Exchange's rules by eliminating provisions that no longer 
are necessary in light of the obsolescence of POETS and the elimination 
of the position of OBO. In addition, by requiring a Trading Official to 
be an Exchange employee or officer, the proposed rule change is 
designed to minimize potential conflicts of interest that otherwise may 
arise when an OTP Holder is called upon to act in the capacity of a 
Trading Official and to make a decision on a regulatory matter.
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    \7\ 15 U.S.C. 78f(b).
    \8\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b)(5).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-PCX-2005-102), as amended, 
is approved.
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    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-1778 Filed 2-8-06; 8:45 am]

BILLING CODE 8010-01-P
