[Federal Register: March 27, 2007 (Volume 72, Number 58)]
[Notices]
[Page 14321-14322]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27mr07-85]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55492; File No. SR-Phlx-2006-61]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing of a Proposed Rule Change and Amendment No. 2 Thereto
Relating to Order and Decorum Regulations
March 20, 2007.
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 September 26, 2006, the Philadelphia Stock Exchange, Inc. (``Phlx''
or ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been substantially prepared by Phlx. On
November 14, 2006, the Exchange filed Amendment No. 1 to the proposed
rule change which was subsequently withdrawn.\3\ On January 19, 2007,
the Exchange filed Amendment No. 2 to the proposed rule change. 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\ On January 12, 2007, Phlx withdrew Amendment No. 1.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Phlx, pursuant to Section 19(b)(1) of the Act \4\ and Rule 19b-
4 thereunder,\5\ proposes to amend Option Order and Decorum Regulation
2, Food, Liquids and Beverages; Regulation 4, Order; Regulation 5,
Visitors and Applicants; and Regulation 6, Dress, pursuant to Exchange
Rule 60. The amendments intend to: (i) Add clarifying language to
Regulations 4 and 5; (ii) amend Regulation 2 language concerning food,
liquids and beverages and propose fines for violations of these new
sections; (iii) add new language to address trash, litter and vandalism
to Regulation 2; (iv) increase fine amounts as specified in proposed
Regulations 2 and 6; (v) delete the language of Regulation 6 and adopt
a revised dress code; and (vi) add clarifying language to Regulations
2, 4, 5 and 6 regarding supervisory responsibility for violations of
the various order and decorum regulations.
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\4\ 15 U.S.C. 78s(b)(1).
\5\ 17 CFR 240.19b-4.
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The text of the proposed rule change is available at Phlx, the
Commission's Public Reference Room, and http://www.Phlx.com.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Phlx 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. Phlx 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 purpose of the proposed rule change is to amend various Option
Order and Decorum Regulations, adopted pursuant to Exchange Rule 60, to
ensure the efficient, undisrupted conduct of business on the Exchange
and provide a trading floor environment free from conduct that could
distract or interfere with market activity. Further, the Exchange seeks
to delineate specific guidelines concerning the conduct and personal
appearance of persons on the trading floor to prohibit any act or
omission, which could interfere with the personal safety of other
persons on the trading floor.
Regulation 2
The Exchange no longer has a cafeteria for members on the premises
and therefore, for purposes of convenience, the Exchange proposes to
amend Regulation 2 to allow members, member organizations,
participants, participant organizations and their associated persons to
consume foods, liquids and beverages while on the trading floor,
provided this does not unreasonably interfere with the business of the
trading floor. The Exchange proposes to increase the fines associated
with a violation of this Regulation to create a deterrent for members
who are not compliant with the new policy.
Additionally, new language is proposed to address trash, litter and
vandalism on the trading floor. The Exchange desires to promote a
professional environment and to create a physical workplace that is
free of trash and litter. The Exchange proposes to add certain fines
for violating the trash, litter and vandalism Regulations. Also, the
Exchange proposes language to address vandalism. In an effort to
maintain a businesslike atmosphere, the abuse, destruction and theft of
property will not be tolerated. Due to the addition of these sections,
the Exchange proposes changing the title of Regulation 2 from ``Food,
Liquids and Beverages'' to ``Food, Liquids and Beverages, Trash, Litter
and Vandalism'' to reflect the additions to this Regulation.
Regulation 4
The Exchange proposes adding language to section (a) of this
Regulation to clarify that the use of profanity is a violation of this
Regulation. While the use of profanity is currently a violation of
Regulation 4, the Exchange seeks to further define the scope of
prohibited conduct by specifically indicating that members, member
organizations, participants, participant organizations and their
associated persons will be disciplined for the use of profanity.
Regulation 5
The Exchange proposes amending this Regulation to authorize an
Exchange or Floor Official to permit visitors on the trading floor. It
is more practicable for Exchange and Floor Officials to determine
whether to permit visitors to the trading floor instead of requiring a
floor committee to meet and make such determinations. The decision to
permit visitors on the trading floor is a day-to-day business function,
which is better served by allowing Exchange and Floor Officials the
authority to make these decisions.
Regulation 6
The Exchange proposes amending its current dress code to adopt a
business casual dress code and clarify what business attire is deemed
acceptable on the trading floor. By issuing guidelines on acceptable
apparel while on the trading floor, the Exchange intends to encourage
all members, member organizations, participants, participant
organizations and their associated persons to comply with the dress
code requirements of Regulation 6.\6\ The
[[Page 14322]]
Exchange also proposed to increase sanctions.
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\6\ The Commission made minor clarifications to this sentence
pursuant to a telephone call with the Exchange. See telephone call
by and between Rahman Harrison, Special Counsel, Division of Market
Regulation, Commission, and Angela Dunn, Director and Counsel, Phlx,
on March 19, 2007.
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Other Changes
In addition, the Exchange proposes to further amend Regulations 2,
4, 5 and 6 to add language to indicate, pursuant to Exchange Rule 60,
that Exchange Staff may impose fines for breaches of order, decorum,
health, safety and welfare on the members, member organizations,
participants, participant organizations and their associated persons.
This language is intended to clarify the responsibility of members and
their associated persons for compliance with Regulations.
2. Statutory Basis
The proposal is consistent with Section 6(b) of the Act \7\ in
general, and furthers the objectives of Section 6(b)(5) of the Act \8\
in particular, in that it is designed 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, because the proposal
should facilitate prompt, appropriate, and effective discipline for
violations of Exchange Rule 60 and the regulations thereunder designed
to maintain order on the Exchange. In addition, the proposed rule is
consistent with Section 6(b)(6) of the Act \9\ which requires the rules
of an exchange provide that its members be appropriately disciplined
for violations of the Act as well as the rules and regulations
thereunder, by imposing increased fine amounts for breaches of order
and decorum to better reflect the severity of the violation and provide
an appropriate form of deterrence for violation of Exchange Rule 60 and
the regulations thereunder.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ 15 U.S.C. 78f(b)(6).
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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
result in 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 were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) As the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
(A) By order approve such proposed rule change; or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
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. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-Phlx-2006-61 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2006-61. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). 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 also will be available for inspection and copying at the
principal office of the Phlx. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-Phlx-2006-61 and should be submitted on or before April
17, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-5552 Filed 3-26-07; 8:45 am]
BILLING CODE 8010-01-P