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Self-Regulatory Organizations; the Pacific Exchange, Inc.; Order Granting Approval of Proposed Rule Change Relating to Accepting Orders From Professional Customers

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Start Preamble September 13, 2001.

On July 26, 2001, the Pacific Exchange, Inc. (“PCX” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)[1] and Rule 19b-4 thereunder,[2] a proposed rule change that would allow PCX Floor Brokers and qualified Floor Clerks of Start Printed Page 48503Floor Brokers to accept orders from Professional Customers (as defined in the proposed rule) for execution on the Exchange's trading floor, under certain terms and circumstances. Notice of the proposed rule change was published for comment in the Federal Register on August 8, 2001.[3] The Commission received no comments on the proposal. This order approves the proposed rule change.

The Commission has reviewed carefully the proposed rule change, and finds that it is consistent with the act and the rules and regulations promulgated thereunder applicable to a national securities exchange and, in particular, with the requirements of Section 6(b).[4] Specifically, the Commission finds that approval of the proposed rule change is consistent with Section 6(b)(5)[5] in that it is designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts and practices, and to protect investors and the public interest.

Additionally, the Commission believes the proposal's provision that would allow a Floor Clerk of a qualified Floor Member to accept orders from professional customers for execution on the Exchange's trading floor provided the Floor Clerk has successfully completed either the Series 7 Examination or the Series 7A Examination is consistent with Section 6(c)(3)(A) of the Act,[6] which allows a national securities exchange to deny membership to, or condition the membership of, a registered broker or dealer if such broker or dealer, or persons associated with such broker or dealer, does not meet such standards of training, experience, and competence as are prescribed by the rules of the exchange. The Commission believes the proposed rule change will help the Exchange to ensure that Floor Clerks satisfy prescribed standards of training, experience, and competence, and will help to ensure that Floor Clerks who may accept orders from Professional Customers for execution on the Exchange's trading floor are sufficiently familiar with the rules and practices of the Exchange's trading floor.

For these reasons, the Commission finds that the proposed rule change is consistent with the provisions of the Act, in general, and with Sections 6(b)(5)[7] and 6(c)(3)(A)[8] in particular.

It Is Therefore Ordered, pursuant to Section 19(b)(2) of the Act,[9] that the proposed rule change (SR-PCX-2001-26) be and hereby is approved.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[10]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble


3.  Securities Exchange Act Release No. 44637 (August 1, 2001), 66 FR 41645.

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4.  15 U.S.C. 78f(b). In approving this proposal, the Commission 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. 01-23436 Filed 9-19-01; 8:45 am]