[Federal Register Volume 67, Number 116 (Monday, June 17, 2002)]
[Notices]
[Pages 41289-41290]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-15139]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-46054; File No. SR-PCX-2002-12]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by
the Pacific Exchange, Inc. Relating to the Obligation of ETP Holders To
Maintain Books and Records
June 10, 2002.
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 April 22, 2002, the Pacific Exchange, Inc. (``PCX'' or
``Exchange''), through its wholly-owned subsidiary PCX Equities, Inc.
(``PCXE'' or ``Corporation''), submitted to 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. PCX filed Amendment No. 1 to the proposed rule change
on May 17, 2002.\3\ The Exchange filed the proposed rule change
pursuant to section 19(b)(3)(A) of the Act,\4\ and Rule 10b-4(f)(6)
thereunder,\5\ which renders the proposal effective upon filing with
the Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change, as amended, from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In Amendment No. 1, the Exchange requests that the proposed
rule change be considered pursuant to section 19(b)(3)(A)(i) of the
Act and Rule 19b-4(f)(6) thereunder, and proposes to add a
parenthetical phrase ``including any interpretation relating
thereto'' to the first sentence of proposed PCX Rule 2.23. See
letter from Mai S. Shiver, Senior Attorney, Regulatory Policy, PCX,
to Nancy J. Sanow, Assistant Director, Division of Market
Regulation, Commission, dated May 16, 2002 (``Amendment No. 1'').
Because the Form 19b-4 submitted on April 22, 2002 was not complete,
the proposed rule change was not considered filed. The proposed rule
change became effective on May 17, 2002, the date on which Amendment
No. 1 was filed with the Commission.
\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The PCX proposes a new rule, PCX Rule 2.23, in order to codify the
existing obligations of an equity trading permit holder (``ETP
Holder'') to keep and preserve books and records. The text of the
proposed rule change is below; new language is italicized.
Rule 2.23 Each ETP Holder must make, keep current and preserve such
books and records as the Exchange may prescribe and as may be
prescribed by the Securities Exchange Act of 1934 and the rules and
regulations thereunder (including any interpretation relating thereto)
as though such ETP Holders were brokers or dealers registered with the
SEC pursuant to Section 15 of the Exchange Act. No ETP Holder may
refuse to make available to the Exchange such books, records or other
information as may be called for under the Rules or as may be requested
in connection with an Exchange investigation.
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 PCX 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 PCX 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
Currently, Exchange rules obligate ETP Holders to make, keep
current, and preserve certain books and records.\6\ In addition, the
Exchange relies on the Commission's comprehensive books and records
rules, Rule 17a-3 \7\ and Rule
[[Page 41290]]
17a-4 \8\ of the Act, as the basis of its authority to require ETP
Holders to maintain and retain books and records not covered under the
Exchange's express rules.
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\6\ See, e.g., PCX Rule 4.1, Commentary .02(g) (requirement that
an ETP Firm maintain records on spot commodities); PCX Rule 4.14(a)
(requirement that ETP Holders maintain daily margin records).
\7\ 17 CFR 240.17a-3.
\8\ 17 CFR 240.17a-4.
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The Exchange now proposes to adopt a new rule to codify the books
and records requirement and to make clear to ETP Holders that the
Commission's comprehensive books and records rule applies to each ETP
Holder. As proposed, the new rule would require each ETP Holder to
make, keep current, and preserve such books and records as the Exchange
may prescribe and as those that may be prescribed by the Act and the
rules and regulations thereunder (including any interpretation
thereunder). The proposed rule further provides that no ETP Holder may
refuse to make available to the Exchange such books, records or other
information as may be called for under the PCX rules or as may be
requested in connection with an Exchange investigation. Otherwise, the
proposed rule does not impose any additional requirements on the ETP
Holders.
2. Statutory Basis
The Exchange believes that the proposal is consistent with section
6(b) of the Act,\9\ in general, and furthers the objectives of Section
6(b)(5),\10\ in particular, because it is designed to promote just and
equitable principles of trade, prevent fraudulent and manipulative acts
and practices, and protect investors and the public interest.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The PCX 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
Because the foregoing proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) does not become operative for 30 days from the date of filing,
or such shorter time as the Commission may designate if consistent with
the protection of investors and the public interest, and the Exchange
has provided the Commission with written notice of its intent to file
the proposed rule change at least five business days prior to the
filing date,\11\ the proposed rule change has become effective pursuant
to section 19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(6)
thereunder.\13\
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\11\ The Commission notes that PCX's original Form 19b-4, dated
April 22, 2002, satisfied the pre-filing notice requirement.
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6).
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At any time within 60 days of the filing of such proposed rule
change, the Commission may summarily abrogate such rule change if it
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.\14\
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\14\ The proposed rule change became effective on May 17, 2002,
the date on which Amendment No. 1 was filed and, therefore, the 60
day abrogation period began on May 17, 2002.
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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, as amended, 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
Number SR-PCX-2002-12 and should be submitted by July 8, 2002.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 02-15139 Filed 6-14-02; 8:45 am]
BILLING CODE 8010-01-P