Skip to Content


Self-Regulatory Organizations; Order Approving Proposed Rule Change by the Philadelphia Stock Exchange, Inc. Relating to the Limitation of Liability of the Options Clearing Corporation to Exchange Members

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble September 24, 2003.

On June 2, 2003, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) submitted to 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 Exchange By-Law 12-11 to provide that the Options Clearing Corporation (“OCC”) will have no liability to Phlx members, with respect to the use, non-use, or inability to use the Options Intermarket Linkage (“Linkage”). The proposed rule change was published for comment in the Federal Register on August 19, 2003.[3] The Commission received no comments on the proposal. This order approves the proposed rule change.

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] and, in particular, the requirements of Section 6(b) of the Act [5] and the rules and regulations thereunder. The Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,[6] which requires, among other things, that the rules of the Exchange be designed to foster cooperation and coordination with persons engaged in regulation, clearing, settling, processing information with respect to, and facilitating transactions in securities, 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.

The Commission notes that the Phlx, along with the other exchanges that are Participants in the Linkage Plan, entered Start Printed Page 56371into an agreement with the OCC, which operates the central core or “hub” to and from which all Linkage orders are routed.[7] In the Agreement, the Phlx committed to file a proposed rule change with the Commission that would limit the liability of the OCC to Phlx members. The Commission believes that this proposed rule change should foster cooperation and promote a relationship between the Phlx and the OCC that is conducive to the effective operation of the Linkage.

It Is Therefore Ordered, pursuant to Section 19(b)(2) of the Act,[8] that the proposed rule change (File No. SR-Phlx-2003-43) be, and it hereby is, approved.

Start Signature

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

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble


3.  Securities Exchange Act Release No. 48323 (August 12, 2003), 68 FR 49835.

Back to Citation

4.  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).

Back to Citation

7.  Linkage Project and Facilities Management Agreement (“the Agreement”) (January 30, 2003).

Back to Citation

[FR Doc. 03-24758 Filed 9-29-03; 8:45 am]