[Federal Register Volume 59, Number 205 (Tuesday, October 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26436]
[[Page Unknown]]
[Federal Register: October 25, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34849; File No. SR-PSE-94-22]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by Pacific Stock Exchange, Inc., Relating to the Execution of
Cross Transactions on the PSE Equities Floors
October 18, 1994.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on August
18, 1994, the Pacific Stock Exchange, Inc. (``PSE'' 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 prepared by the self-regulatory organization. On
October 13, 1994, the Exchange submitted Amendment No. 1.\1\ The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\See letter from Michael Pierson, Senior Attorney, PSE, to
Sandra Sciole, Commission, dated October 10, 1994. In Amendment No.
1 the PSE (1) Divided the original proposed rule change into two
filings by removing proposed commentary .06 from this filing and
making it a separate filing; and (2) changed the minimum number of
shares for eligibility under the commentary from 10,000 to 25,000 to
mirror the comparable Amex and NYSE Rules (NYSE Rule 72(b) and Amex
Rule 126(g)).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to add a new commentary to its Rule
5.14(b), relating to the execution of cross transactions on the
Equities Floors. The text of the proposed rule change is as follows:
italicizing indicates new language:
Rule 5.14(a)--No change.
Rule 5.14(b)--No change.
Commentary .01--.04--No change.
.05 Agency orders to cross 25,000 shares or more at or within the
prevailing quotation will be permitted to establish precedence without
regard to priority of existing bids or offers at that price. Members
will be allowed to better the proposed cross price, but in doing so
shall be required to satisfy all other existing bids or offers at that
price. For purposes of this Commentary .05, proprietary orders of
members, member organizations, and non-member broker dealers shall not
be considered ``agency.''
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 self-regulatory organization
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 self-regulatory organization
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 PSE is proposing to amend its rules regarding the execution of
stock cross transactions (i.e., Rules 5.14(a) and 5.14(b)) by adding a
new commentary to Rule 5.14(b). Proposed Commentary .05 will govern
large agency crosses.
Proposed Commentary .05. Proposed Commentary .05 is designed to
permit the execution of ``clean'' agency crosses of 25,000 shares or
more at or within the prevailing quotation without regard to the
priority of existing bids or offers.
As with the Rule 72(b) of the New York Stock Exchange (``NYSE'')
and the Rule 126(g), Commentary .02, of the American Stock Exchange
(``Amex''), this proposal to allow ``clean'' crosses is designed to
facilitate the execution of agency cross transaction at the PSE.
Although the proposal would allow such cross transactions to be
executed without regard to priority of existing bids or offers, it will
still specifically allow members an opportunity to better the price of
the cross transaction.
The PSE has also written this new rule with a specific limitation
that it be allowed only for ``agency'' order, i.e. non-proprietary
orders of members, member organizations and non-member broker/dealers.
This approach to agency orders is consistent with that taken by the
Amex and NYSE. It is designed to provide an environment for the
facilitation of true agency crosses without giving an unfair advantage
to the proprietary orders of members, member organizations or non-
member broker/dealers over other orders being held in the specialist
books.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act, in general, and Section 6(b)(5), in
particular, in that it is designed to facilitate transactions in
securities, to promote just and equitable principles of trade, and to
protect investors and the public interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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
Within 35 days of the 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 self-regulatory organization consents, the Commission will:
(A) By order approve the 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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street NW., Washington, D.C. 20549.
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 at the
Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such filing will also be available
for inspection and copying at the principal office of the PSE. All
submissions should refer to File No. SR-PSE-94-22 and should be
submitted by November 15, 1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-26436 Filed 10-24-94; 8:45 am]
BILLING COCE 8010-01-M