[Federal Register Volume 71, Number 149 (Thursday, August 3, 2006)]
[Notices]
[Pages 44067-44070]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-12520]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54237; File No. SR-Phlx-2006-39]
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to Conforming Changes to Its By-Laws
July 28, 2006.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 21, 2006, the Philadelphia Stock Exchange, Inc. (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the Phlx. The Phlx has
designated this proposal as one concerned solely with the
administration of the Exchange under Section 19(b)(3)(A)(iii) of the
Act \3\ and Rule 19b-4(f)(3) thereunder,\4\ which renders the proposal
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(3).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend various provisions of its By-Laws
(``By-
[[Page 44068]]
Laws'') to conform the usage of terms contained in, and to make
technical corrections to, the By-Laws. The text of the proposed rule
change is set forth below, with italics indicating new text and
[brackets] indicating deletions.
* * * * *
ARTICLE IV Board of Governors
Number and Composition
SEC. 4-1. The management of the business and affairs of the
Exchange shall be vested in the Board of Governors. The Board of
Governors shall be composed of the Chairman of the Board of Governors,
who shall be the individual then holding the office of the Chief
Executive Officer of the Exchange and twenty-two (22) other Governors
consisting of: two (2) Governors who are Member Governors who meet the
qualifications set forth in By-Law Article [1] I, Section 1-1 with
respect to Member Governors; one (1) Governor who is a PBOT Governor
who meets the qualifications set forth in By-Law Article [1] I, Section
1-1 with respect to the PBOT Governor; six (6) Governors who are
Stockholder Governors who meet the qualifications set forth in By-Law
Article [1] I, Section 1-1 with respect to Stockholder Governors;
twelve (12) Governors who are Independent Governors who meet the
qualifications set forth in By-Law Article [1] I, Section 1-1 with
respect to Independent Governors and one (1) Governor who is the Vice-
Chairman of the Board of Governors who meets the qualifications set
forth in By-Law Article V, Section 5-2 with respect to the Vice-
Chairman.
* * * * *
Duties and Powers
SEC. 4-4. (a)--The Board of Governors shall be vested with all the
powers necessary for the management of the business and affairs of the
Exchange, the regulation of the business conduct of Members,
participants, Member Organizations, and participant organizations, and
persons associated with such organizations and for the promotion of the
welfare, objects and purposes of the Exchange, and in addition to the
power and authority conferred by these By-Laws, may exercise all powers
of the Exchange and do all such lawful acts and things as are not by
statute, these By-Laws or the Certificate of Incorporation directed or
required to be exercised or done by the Stockholders.
[Amendment.
August 22, 1997 (97-31).]
[(a)] In the exercise of its powers it may adopt such rules, issue
such orders and directions and make such decisions as it may deem
appropriate.
SEC. 4.4 (b) No Change
* * * * *
Vacancies
SEC. 4-7. Vacancies in the Board of Governors, including vacancies
resulting from [from] the resignation of any Governors or an increase
in the number of Governors, shall be filled by the Nominating, [and]
Elections and Governance Committee, subject to approval by a majority
of the Governors then in office, although less than a quorum, or by a
sole remaining Governor, and each person so elected shall be a Governor
until his successor is elected and qualified or until his earlier
resignation or removal.
Disqualification of Governors
SEC. 4-8. (a)-(b)--No change.
(c) The last sentence of subsection (a) of this Section shall not
apply when the interest of the relevant person is derived solely from
being part of the general membership or of a class of [m]Members,
unless their impartiality might reasonably be questioned.
* * * * *
ARTICLE X Standing Committees
Standing Committees
SEC. 10-1 (a) The Standing Committees of the Exchange shall consist
of: an Executive Committee, an Admissions Committee, an Allocation,
Evaluation and Securities Committee, an Audit Committee, an Automation
Committee, a Business Conduct Committee, a Compensation Committee, a
Finance Committee, a Floor Procedure Committee, a Foreign Currency
Options Committee, a Marketing Committee, a Nominating, [and] Elections
and Governance Committee, a Quality of Markets Committee, and an
Options Committee. Each of such Committees shall be composed of not
more than nine (9) members, including ex-officio members, except for
the Floor Procedure Committee, the Options Committee, and the Foreign
Currency Options Committee, which shall each consist of not more than
twelve (12) members, including ex-officio members. The Chairman of each
Standing Committee shall be a member of the Board of Governors and at
least one other person on each Committee shall be a Governor.
* * * * *
Vacancies in Standing Committees--Ad Interim Appointments
SEC. 10-4. The Executive Committee shall appoint, subject to the
approval of the Board of Governors, a person to fill any vacancy other
than Chairman occurring in any Standing Committee except the
Nominating, [and] Elections and Governance Committee and the Executive
Committee. Should special exigencies require, the Chairman of the Board
of Governors may fill any such vacancy ad interim until the next
regular meeting of the Board of Governors.
* * * * *
Nominating, Elections and Governance Committee
SEC. 10-19. (a)-(h)--No change.
(i) The names of the persons nominated by the Nominating, [and]
Elections and Governance Committee shall be identified on the ballot by
an appropriate legend or symbol. In the event that there are more
nominations of persons [in the categories of On-Floor and Off-Floor
Governor] than there are vacancies on the Board of Governors which may
be filled by such persons, the number of such persons who may be
elected to serve on the Board of Governors in each category shall also
be indicated on the ballot.
* * * * *
ARTICLE XI Appeals
When Allowed
SEC. 11-1. (a)--No change.
(b) Notwithstanding the foregoing, any appeal from a decision of
the Nominating, [and] Elections and Governance Committee regarding the
eligibility of any candidate for election to the Board of Governors
shall be heard by a special committee of the Board of Governors
composed of not less than a majority of all Governors who are not then
candidates for office on the Board of Governors. An affected candidate
or interested party may appeal by filing a written notice thereof with
the Secretary of the Exchange within seven (7) days after a decision.
Said notice shall also state the reasons for his appeal and the relief
requested. He may appear before the special committee and present
arguments concerning the decision. An appropriate record shall be kept.
The decision of the special committee shall be final.
(c)--No change.
* * * * *
[[Page 44069]]
ARTICLE XV Transfer of Foreign Currency Options Participations
Transfer of Foreign Currency Options Participations
Transfer of Equitable Title
A transfer of equitable title only to a foreign currency options
participation shall be made upon submission of the name of the
transferor and the transferee thereof to the Admissions Committee. A
transfer may not be effected pursuant to a lease agreement. Notice of
this transfer shall be posted upon the website of the Exchange and
shall also appear in the Weekly Bulletin mailed to the [m]Members and/
or foreign currency options participants at least seven (7) days in
advance of the transfer's effective date. Notice of the proposed
transfer shall specify the date on which the proposed transfer will
become effective.
* * * * *
Contracts of Transferor
SEC. 15-2.
* * * * *
Effect of Involuntary Transfers
Notice of a transfer to be made pursuant to a sale of a foreign
currency options participation by the Admissions Committee shall be
sent to the [m]Members and the foreign currency options participants as
in the case of a voluntary transfer, and shall have the same effect in
respect to open contracts and unmatured debts and obligations of the
foreign currency options participant or former foreign currency options
participant as in the case of a voluntary transfer.
Disposition of Proceeds of Sale of Foreign Currency Options
Participation
SEC. 15-3.
* * * * *
Determination of Claims
An Advisory Committee of (3) Governors, of whom at least two (2)
shall be Independent Governors, shall be appointed by the Chairman of
the Board of Governors to examine the validity of claims asserted
against the [m]Members or the foreign currency options participants and
give an advisory opinion to the Board of Governors thereon. The
examination of the validity of the claims shall be made upon written
submission of claimants and respondents with provision for these
parties to request oral argument before the Advisory Committee. The
Board of Governors, based upon the written record before the Advisory
Committee, shall determine the payment of such sums that are or may
become due to the claimants pursuant to these By-Laws and the rules of
the Exchange. The decision of the Board of Governors shall be in
writing and sent to the parties to the proceeding respecting the
determination of claims.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Phlx included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposal. The text of these
statements may be examined at the places specified in Item IV below.
The Exchange has prepared summaries, set forth in Sections A, B, and C
below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange represents that the purpose of the proposed rule
change is to make minor, technical adjustments to certain By-Laws, in
order to conform them to the current By-Laws as amended recently by SR-
Phlx-2005-93.\5\ The Exchange represents that the proposed amendments
are administrative in nature and are only intended to add consistency
to the rules in terms of form.
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\5\ See Securities Exchange Act Release No. 53734 (April 27,
2006), 71 FR 26589 (May 5, 2006).
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The term ``member'' is being capitalized in certain places to
clarify the intended meaning of the term. The Exchange represents that
the purpose of this amendment is not to change the intent of its
meaning within the By-Laws, but rather to clarify the intended meaning
by capitalizing the term in relevant places. The capitalization should
differentiate between intended references to the term ``Member'' as
defined in Phlx Rule 2 \6\ from the term ``member'' as used in other
contexts.\7\ The Exchange represents that this amendment does not
intend to substantively amend the By-Laws, but only to correct
inadvertent omissions in the previously referenced filing.
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\6\ Phlx Rule 2 states, ``The term ``Member'' means a permit
holder which has not been terminated in accordance with the by-laws
and these rules of the Exchange.''
\7\ For example, the By-Laws use the term ``member'' to refer to
members of a committee. The Exchange represents that the proposed
rule change would not amend references to the term ``member'' in the
Exchange's Certificate of Incorporation.
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The term ``Governance'' was previously added to the title of the
Nominating and Elections Committee in the previously referenced
filing.\8\ The failure to include the term ``Governance'', when
referencing this Committee in certain places, was an inadvertent
omission in the previously referenced filing. The proposed amendments
will provide consistency throughout the By-Laws when referring to this
Committee.
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\8\ See Securities Exchange Act Release No. 53734, supra note 5.
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The Exchange proposes to remove the references to ``Off-Floor
Governor'' and ``On-Floor Governor'' as these terms no longer have a
defined meaning in the By-Laws. The terms ``Off-Floor Governor'' and
``On-Floor Governor'' were removed from the By-Laws by a previous rule
filing.\9\ The Exchange represents that the remaining references to
these terms in the specified By-Laws was an inadvertent oversight. The
removal of these terms should provide clarity to the existing language
in these By-Laws.
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\9\ See id.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \10\ in general, and furthers the objectives of Section
6(b)(5) of the Act \11\ in particular, in that it is designed to
promote just and equitable principles of trade, 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, by maintaining consistency in the terms referenced throughout
the By-Laws and the intended usage of defined terms.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
[[Page 44070]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change has become effective pursuant to
Section 19(b)(3)(A)(iii) of the Act,\12\ and paragraph (f)(3) of Rule
19b-4 thereunder \13\ because the Phlx has designated it as being
concerned solely with the administration of the Exchange. At any time
within 60 days of the filing of the proposed rule change, the
Commission may summarily abrogate such rule change if it appears to the
Commission that such action is necessary or appropriate in the public
interest, for the protection of investors, or otherwise in furtherance
of the purposes of the Act.\14\
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\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(3).
\14\ See 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-Phlx-2006-39 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2006-39. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 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 also will be available for inspection and copying at the Phlx.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-Phlx-2006-39
and should be submitted on or before August 24, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6-12520 Filed 8-2-06; 8:45 am]
BILLING CODE 8010-01-P