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Self-Regulatory Organizations; Order Granting Approval of Proposed Rule Change by the Pacific Exchange, Inc., To Amend Its Clearly Erroneous Policy

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Start Preamble November 25, 2002.

On September 23, 2002, the Pacific Exchange, Inc. (“PCX”), 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 Start Printed Page 72263thereunder, [2] a proposed rule change relating to its “Clearly Erroneous Policy.” Notice of the proposed rule change was published for comment in the Federal Register on October 22, 2002.[3] No comments were received on the proposed rule change.

The PCX, through its wholly owned subsidiary PCX Equities, Inc. (“PCXE”), proposes to amend PCXE Rule 7.11(d) to confer authority on a PCXE officer designated by PCXE who, in addition to the Chief Executive Officer and President, may nullify transactions or modify their terms arising out of any disruption or malfunction in the Archipelago Exchange trading system, the equities trading facility of PCXE. The rule change also adds conforming language to PCXE Rule 10.13 regarding appeals from such decisions.

The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.[4] Specifically, the Commission believes that the proposal is consistent with section 6(b)(5) of the Act,[5] which requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market, and to protect investors and the public interest.

It is therefore ordered, pursuant to section 19(b)(2) of the Act,[6] that the proposed rule change (File No. SR-PCX-2002-63) be, and it hereby is, approved.

Start Signature

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

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble


3.  See Securities Exchange Act Release No. 46661 (October 15, 2002), 67 FR 64950.

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

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[FR Doc. 02-30669 Filed 12-3-02; 8:45 am]