

[Federal Register: March 16, 2006 (Volume 71, Number 51)]
[Notices]               
[Page 13649]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16mr06-93]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53462; File No. SR-Phlx-2005-70]

 
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Order Approving Proposed Rule Change Relating to the Deletion of Phlx 
Rule 454

March 9, 2006.
    On November 9, 2005, the Philadelphia Stock Exchange, Inc. 
(``Phlx'' or ``Exchange''), filed with the Securities and Exchange 
Commission (``Commission'') a proposed rule change pursuant to Section 
19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 
19b-4 thereunder,\2\ to delete Phlx Rule 454, ``Limitations on 
Members'' Trading Because of Options, etc.'' The proposed rule change 
was published for comment in the Federal Register on February 6, 
2006.\3\ The Commission received no comments regarding 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. 53188 (January 30, 
2006), 71 FR 6122.
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    The Phlx proposes to delete Phlx Rule 454, which prohibits a 
member, while on the floor, from initiating the purchase or sale of a 
security on the Exchange for the member's own account or a related 
account if the member or a related account holds or has granted an 
over-the counter option on the security. The Phlx notes that it adopted 
Phlx Rule 454 in 1935.\4\
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    \4\  See Securities Exchange Act Release No. 13016 (November 29, 
1976), 41 FR 53383 (December 6, 1976) (order approving File No. SR-
Phlx-76-15) (amending Phlx Rule 454 to permit a Phlx member to trade 
an underlying security on the Phlx if the member has purchased or 
sold a listed option on the underlying security).
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    After careful review, 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.\5\ 
In particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\6\ which requires, among 
other things, that the rules of a national securities exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system and, in general, to protect investors and the public 
interest. The Commission believes that the deletion of Phlx Rule 454 is 
consistent with Section 6(b)(5) of the Act because the Phlx now has in 
place comprehensive surveillance and oversight procedures designed to 
monitor trading in options and their underlying securities.
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    \5\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b)(5).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-Phlx-2005-70) is approved.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-3804 Filed 3-15-06; 8:45 am]

BILLING CODE 8010-01-P
