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Self Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Order Granting Approval to Proposed Rule Change To Make Permanent a PACE Automatic Price Improvement Pilot Program and a PACE Order Execution and Price Protection Pilot Program

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Information about this document as published in the Federal Register.

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Start Preamble March 27, 2003.

On March 11, 2002, the Philadelphia Stock Exchange, Inc. (“Phlx” 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 to make permanent two Philadelphia Stock Exchange Automated Communication and Execution System (“PACE”) pilot programs that were introduced with the advent of decimal pricing in the securities industry. The first pilot program consists of an automated price improvement feature that incorporates a percentage of the spread between the bid and the offer, and has been in effect since January 30, 2001.[3] The second pilot program incorporates immediate execution of certain market orders through the Public Order Exposure System (“POES”) and mandatory double-up/double-down price protection, and has been in effect since August 25, 2000.[4]

The proposed rule change was published for comment in the Federal Register on March 22, 2002.[5] The Commission received no comments on the proposal.

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 [6] and, in particular, the requirements of section 6 of the Act [7] and the rules and regulations thereunder. The Commission finds Start Printed Page 16113specifically that the proposed rule change is consistent with section 6(b)(5) of the Act [8] because it is designed to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest.

It is therefore ordered, pursuant to section 19(b)(2) of the Act,[9] that the proposed rule change (SR-PHLX-2002-18), be, and it 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.  See Securities Exchange Act Release No. 43901 (January 30, 2001), 66 FR 8988 (February 5, 2001) (SR-Phlx-2001-12).

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4.  See Securities Exchange Act Release No. 43206 (August 25, 2000), 65 FR 53250 (September 1, 2000) (SR-Phlx-2000-08).

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5.  See Securities Exchange Act Release No. 45580 (March 18, 2002), 67 FR 13399.

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6.  In approving this proposed rule change, 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. 03-7936 Filed 4-1-03; 8:45 am]