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Notice

Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the Philadelphia Stock Exchange, Inc. To Institute an Antitrust Compliance Policy

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Information about this document as published in the Federal Register.

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Start Preamble May 31, 2001.

Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) [1] and Rule 19b-4 [2] thereunder, notice is hereby given that on March 5, 2001, 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 prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

Phlx has proposed to adopt an Antitrust Compliance Policy (“Compliance Policy”). The Compliance Policy, which applies to Exchange governors, committee members, employees, members, and member organizations (“Covered Persons”), is designed to highlight certain activities known to raise antitrust and competition-related concerns, provide general guidance in these areas, and suggest when Covered Persons may want to consult with the Phlx Antitrust Compliance Officer or his designated staff.

The Compliance Policy states that it is the policy of the Exchange to comply with the antitrust laws and the settlements that Phlx and the other options exchanges entered into on September 11, 2000, with the Department of Justice (“DOJ”) and the Commission.[3] The Compliance Policy also discusses the consequences of non-compliance with the antitrust laws, the settlements, and certain Exchange rules.

The Compliance Policy discusses certain types of conduct that may raise behavioral issues. For example, the Compliance Policy state that certain agreements with other exchanges are prohibited by the settlements, various exchange rules, and/or codes of conduct: those indicating that any option class will be traded on only one exchange; those indicating that trading of option classes will be allocated among exchanges; and those requiring, preventing, or limiting the listing, delisting, or trading of any options class. The Compliance Policy states that engaging in harassment or other improper behavior connected with listing decisions or competitive-related practices is prohibited. It states also that listing and delisting decisions must be made in accordance with Exchange rules, policies, and procedures.

In addition, the Compliance Policy states that harassment, retaliation, or intimidation relating to listing decisions, prices, spreads, or trade allocation should be reported to the Antitrust Compliance Officer or his designated staff.

The text of the proposed rule change is available at the principal office of the Exchange and at the Commission's Public Reference Room.

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 Exchange has long insisted that Covered Persons observe the highest standards of business ethics and fair dealing and has therefore filed with the Commission its Employee Code of Conduct and Code of Conduct of Board Members and Committed Members.[4] In an effort to reinforce such standards, in particular with regard to antitrust and competition-related behavior, the Exchange is now proposing to file the Compliance Policy with the Commission.

The purpose of the Compliance Policy is to provide general guidance regarding antitrust and compliance-related issues, highlights activities known to raise concerns, and provide suggestions when to consult the Antitrust Compliance Officers or his designated staff. In addition, the compliance policy specifically deals with issues raised in the DOJ and Commission settlement orders.

The Exchange believes that, by filing the Compliance Policy with the Commission, it would be uniformly applicable to, and violations enforceable against, all Covered Persons: Exchange governors, committee members, employees, members, and member organizations.

2. Statutory Basis

Phlx believes the proposed rule change is consistent with section 6 of the Act [5] in general, and furthers the objectives of section 6(b)(5) [6] in particular, in that it is designed to prevent unsuitable actions by Exchange governors, committee members, employees, members, and member organizations regarding antitrust law and competition-related behavior.

B. Self-Regulatory Organization's Statement on Burden on Competition

Phlx does not believe that the proposed rule change would impose any burden on competition.

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 Start Printed Page 30784(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. 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 filings will also be available for inspection and copying at the principal office of the Phlx. All submissions should refer to File No. SR-Phlx-2001-19 and should be submitted by June 28, 2001.

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[7]

Start Signature

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  See United States v. American Stock Exchange LLC, Civil Action No. 00-CV-02174 (EGS) (D.C. Cir., December 6, 2000); In re Certain Activities of Options Exchanges, Securities Exchange Act Release No. 43268 (September 11, 2000).

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4.  See Securities Exchange Act Release No. 44057 (March 9, 2001), 66 FR 15312 (March 16, 2001) (notice and accelerated partial approval of SR-Phlx-01-03).

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[FR Doc. 01-14313 Filed 6-6-01; 8:45 am]

BILLING CODE 8010-01-M