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Notice

Self-Regulatory Organizations; Order Approving and Notice of Filing and Other Granting Accelerated Approval of Amendment No. 1 to the Proposed Rule Change of the Philadelphia Stock Exchange, Inc. Concerning the Maintenance, Retention, and Furnishing of Records and Other Information Related to Payment for Order Flow Arrangements

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Information about this document as published in the Federal Register.

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Start Preamble June 11, 2001.

On January 19, 2001, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (Act) [1] and Rule 19b-4 thereunder,[2] the Philadelphia Stock Exchange, Inc. (Phlx) filed with the Securities and Exchange Commission a proposed rule change to amend Phlx Rule 760 to require Phlx members and member organizations to make, keep current, and preserve records relating to payment for order flow arrangements and, upon request, to make those records available to the Phlx for inspection and review. The proposed change was published for comment in the Federal Register on April 2, 2001.[3] The Commission received no comments on the proposal.

On May 22, 2001, the Phlx filed Amendment No. 1 to the proposed rule change, which replaced the original filing in its entirety. Amendment No. 1 added supplemental language to Phlx Rule 760 to clarify that the recordkeeping requirement apply only to Phlx specialists and specialist units that participate in the Phlx's payment for order flow program, and not to all Phlx members generally. The text of the proposed rule change is available at the principal offices of the Phlx and at the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended by Amendment No. 1, and is issuing this Order approving the proposed amended rule change.

Pursuant to Section 19(b)(2) of the Act,[4] the Commission has determined to accelerate approval of the proposed rule change. The Commission notes that, prior to the filing of Amendment No. 1, the proposed rule change was noticed for public comment and did not attract any comments. Because Amendment No. 1 to the proposed rule change simply clarifies that the proposed recordkeeping requirements apply only to Phlx specialists and Phlx specialist units and not to Phlx members generally, the Commission finds good cause to approve the proposed rule change prior to the thirtieth day after the date of publication of notice of this filing in the Federal Register. The Commission believes that the proposed rule change, as amended, will assist the Phlx to review and verify that its payment for order flow program is being administered pursuant to the terms that the Phlx has established.

The Commission finds that the proposed rule change, as amended by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange, particularly Section 6 of the Start Printed Page 32860Act [5] and the rules and regulations thereunder.[6] The Commission also finds that the proposed rule change, as amended, will promote just and equitable principles of trade consistent with Section 6(b)(5) of the Act.[7]

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 submission 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 Phlx. All submissions should refer to File No. SR-Phlx-2001-08 and should be submitted by July 9, 2001.

It is therefore ordered, pursuant to Section 19(b)(2) of the Act,[8] that the proposed rule change (File No. SR-Phlx-2001-08), as amended, be, and it hereby is, approved.

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[9]

Start Signature

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  Securities Exchange Act Release No. 44102 (March 26, 2001), 66 FR 17591 (April 2, 2001).

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6.  In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).

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[FR Doc. 01-15223 Filed 6-15-01; 8:45 am]

BILLING CODE 8010-01-M