April 6, 2001
Mr. Jonathan G. Katz
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0609
Re: Proposed Rule Changes of Self-Regulatory Organizations
Release No. 34-43860; File No. S7-03-01
Dear Mr. Katz:
The Philadelphia Stock Exchange ("Phlx" or "Exchange") appreciates the opportunity to comment on the proposed changes to the self-regulatory organization ("SRO") rule filing process as reflected in proposed Rule 19b-6 and Form 19b-6 under the Securities Exchange Act of 1934 ("Exchange Act").1
Proposed Rule 19b-6 would replace existing Rule 19b-4 under the Exchange Act, which currently governs the filing and approval of SRO proposed rule changes. The Rule would make a number of changes in the rule filing process, including: (1) requiring the Securities and Exchange Commission ("SEC" or "Commission") to issue a release relating to a proposed SRO rule change within ten business days of filing with the Commission or within such longer time period as to which the SRO consents in writing; (2) eliminating the pre-filing requirement and the 30-day delayed operational period before a non-controversial rule change can be filed or become effective; (3) expanding the categories of proposed rule changes that qualify for immediate effectiveness to include trading rules (other than trading rules that would make fundamental structural changes to the market, and that would significantly affect the protection of investors or the public interest or impose a significant burden on competition); (4) clarifying that where a proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Exchange Act, no inference may be made regarding whether the proposed rule change is in the public interest, including any impact on competition; and (5) permitting SROs to file proposed rule changes electronically.
Generally, the Exchange supports the efforts of the SEC to expedite the review of SRO rules, and to allow SROs to introduce changes to their markets more quickly. The Exchange has supported prior efforts by the Commission to improve and simplify the rule filing process, including the changes made in 1994 and 1998 to expedite the filing review process for non-controversial filings and to permit the speedy introduction of new derivative securities products.
The Phlx agrees with the SEC that investors are best served by a regulatory structure that facilitates fair and vigorous competition among market participants and fosters investor protection. At the same time, the Exchange notes that the structure and operations of the securities markets are vastly different than they were in 1975, when the Securities Act Amendments of 1975 established the requirements that SRO rule changes be reviewed and approved by the Commission. Among other things, volume has grown exponentially, and market conditions have changed dramatically. New types of trading mechanisms, in the form of alternative trading systems ("ATSs") and electronic communications networks ("ECNs"), as well as foreign markets and commodities markets,2 have offered additional competition to traditional exchange markets. However, because, for example, ATSs and ECNs are not SROs, they can offer innovative products and services without compliance with the SEC's rule filing processes, which often delay the introduction of new products and services by exchanges such as the Phlx.
The Exchange believes that the time has come to level the playing field between alternative markets, foreign exchanges and commodities exchanges, on the one hand, and traditional securities exchanges on the other, by affording greater flexibility to exchanges and other SROs in the rule filing process -- particularly with respect to the introduction of new products, new technology and new trading systems and protocols. In the Phlx's view, providing SROs that operate securities markets with greater flexibility to compete with alternative trading systems, foreign markets and commodities markets, can only benefit the investing public.
II. Aspects of the Proposal Supported by the Phlx
The Phlx is supportive of the concept of reforming the rule filing process and supports certain of the provisions of proposed Rule 19b-6. Although the Exchange has a number of concerns that are addressed below, the Exchange strongly favors a more streamlined rule filing process and expansion of the ability to have rule changes become effective upon filing.
A. Elimination of Pre-Filing and Delayed Operation for Non-Controversial Filings.
The Exchange supports the Commission proposal to eliminate the five-day pre-filing requirement and the 30-day delayed operational period for non-controversial filings. Eliminating the waiting periods in this provision should enable the Phlx and other SROs to implement more rapidly, rule changes that are truly non-controversial, including, for example, listing standards which are substantially the same as those of another SRO that have been filed and approved. Moreover, the Phlx notes that, to the extent that the Commission believes that a proposed rule change filed as non-controversial does not properly fit within that category, the Commission retains the statutory authority to abrogate within 60 days of the date of filing. 3
B. Electronic Filing of Rule Changes.
The Phlx strongly supports proposed Rule 19b-6(l), which would permit an SRO to file proposed rule changes electronically. Electronic mail is widely used in all aspects of our financial markets and has proven to be a reliable and secure means of transmitting information. Given the speed and reliability of electronic communication, the Exchange believes there is no reason to continue to require SROs to initiate the filing of a proposed rule change with a "hard copy" or paper version of the filing. In addition, the Exchange believes the Commission should go further and delete the proposed Rule's requirement that the SRO promptly thereafter file nine paper copies of the proposed rule change, one of which is manually signed. It is unclear to the Exchange what additional purpose is served by the requirement to file nine paper copies of the proposal. In light of the recent passage of the Electronic Signatures in Global and National Commerce Act,4 the Commission should give serious consideration to elimination of paper in connection with SRO rule filings and authorization of filings by means of digital signatures. The Exchange believes that these additional changes are necessary to truly streamline the process.
C. Faster Publication of Rule Changes.
The Phlx also generally supports the requirement of proposed Rule 19b-6 that requires the Commission to issue a release relating to an SRO's proposed rule change within 10 business days of filing with the Commission or within such longer time period as to which the SRO consents in writing. Under the current rule filing scheme, the Phlx has often experienced delays between the filing of the proposed rule change with the Commission and publication of the proposal in the Federal Register. The proposed 10-day requirement has the potential to substantially shorten the rule filing process. In addition, the Phlx believes that the Commission staff should notify SROs within a specified period (such as 5 days) whether it will accept a proposed rule change as effective upon filing under Section 19(B)(3)(A) of the Exchange Act. If the Commission staff determines not to accept a proposed rule change as effective upon filing, the staff should be required to specify its reasons.
The Phlx notes that requiring a relatively short 10-day mandatory period as the publication period for notice of proposed rule changes does not, in and of itself accomplish the objective of expediting the SRO proposed rule change process overall unless it is coupled with a procedure to ensure that proposed rule changes are actually approved (or disapproval proceedings are actually commenced) following publication within the period specified in the Exchange Act.
III. Phlx Concerns with Proposed Rule 19b-6
The Phlx generally supports the concept of expanding the categories of proposed rule changes that are effective upon filing. Indeed, in order for SROs to remain competitive with ATSs, ECNs, foreign markets and commodities markets, we need the flexibility to make changes quickly to our rules. In this regard, the Exchange believes that the Commission should consider expanding the "effectiveness upon filing" category even beyond the trading rules category addressed in the Proposing Release. For example, the Exchange believes that other categories of rules should be permitted to be effective upon filing, such as membership changes that are non-discriminatory and are consistent with the state law under which the SRO is organized, and changes to SRO minor rule violation plans.
The Exchange believes, however, that some aspects of the current proposal are problematic and should be reconsidered or changed. The Phlx believes that there are a number of issues raised by proposed Rule 19b-6 which, if adopted in their present form, will frustrate the overall objectives that the Commission has stated it wishes to achieve by restructuring the rule filing process. In particular, while the Exchange believes that the Commission should expand the categories of filings that can become effective upon filing, the Exchange believes that the approach of the instant proposal is flawed, causes uncertainty and will result in SROs being unwilling to use the "effective upon filing" category beyond the types of rule filings that currently qualify for such treatment under Section 19(b)(3)(A) and existing Rule 19b-4. The Exchange also believes that various aspects of Rule 19b-6 could actually render the proposed rule change process more burdensome, as discussed below. Finally, the Proposing Release does not focus on the current statutory standards that proposed rule changes need only be consistent with the Act, and that they be approved with 35 days of publication.
A. Inferences Regarding Public Interest and Competition.
For the reasons stated below, the Exchange opposes the concept articulated by proposed Rule 19b-6(h), which states that when a rule becomes effective upon filing pursuant to Section 19(b)(3)(A) of the Exchange Act, no inference can be made with respect to its impact on competition. If, however, this provision is adopted as proposed, it should not be read to imply that there is no implied repeal of the antitrust laws with respect to rules that are adopted under Section 19(b)(3)(A). Whether there is an implied repeal of the antitrust laws with respect to a particular aspect of the securities laws is dependent upon the specific statutory and regulatory context and is not dependent upon a Commission finding with respect to competitive effects. See, Gordon v. New York Stock Exch., 422 U.S. 659 (1975), United States v. National Ass'n of Sec. Dealers, 422 U.S. 694 (1975), In re Stock Exch. Options Trading Antitrust Litig., 2001-1 Trade Cas. (CCH) ¶73,186. 5 The relevant language of the Exchange Act and the extent and nature of the Commission's regulatory role determines whether there is an implied repeal.
The Commission's stated intention is to enable the exchanges to compete more effectively. Proposed Rule 19b-6 can clearly serve that objective by speeding the approval process. The Rule's effectiveness in that regard, however, could be undercut if the Commission argues that no presumption with respect to competition can be drawn from its failure to abrogate a rule or that its oversight is insufficient to support a finding of implied repeal of the antitrust laws. Such an argument would almost certainly increase the possibility of time-consuming, expensive, competitively threatening and, we believe, ultimately futile antitrust litigation and would, therefore, reduce the incentive to file a rule under Rule 19b-6(b)(6).
Although the Commission describes Rule 19b-6(h) as a clarification, the Exchange is unaware that the Commission has ever stated that it believes that there is arguably a difference between a rule filing that becomes effective pursuant to a Commission order and one that becomes effective on filing with respect to the public interest and competition standards of the Exchange Act. The Exchange recognizes that, where a rule change has become effective on filing, the Commission has not issued an order, and, therefore, has not made a formal written determination on whether the specific proposed rule change is consistent with the Exchange Act, including whether the proposed rule change is in the public interest and does not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Exchange Act. Nonetheless, the Exchange Act and the rules governing the rule filing process contemplate Commission oversight of all rule filings including those that become effective on filing. The mere fact that the SEC has determined by regulation, both in its prior revisions to Rule 19b-4 and in proposed Rule 19b-6, that certain categories of SRO rule filings not specifically enumerated in the Exchange Act should become effective without prior Commission review or the entry of a Commission order, means that the Commission is exercising oversight over the entire rule filing process.
The Exchange Act requires publication of "effective on filing" rule changes for public comment and Section 19(b)(3)(C) of the Act authorizes the SEC to summarily abrogate such rule changes and require that they be refiled for Commission consideration under Section 19(b)(2) 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 [Exchange Act]." Thus, it appears to the Phlx that the Congress has implicitly required the Commission to consider whether "effective upon filing" rule changes are in the public interest and whether they further the purposes of the Exchange Act, and that the failure of the Commission to abrogate an "effective upon filing" rule change should carry an inference that the proposal is not inconsistent with the public interest.
Beyond authorizing the Commission to abrogate those rules inconsistent with the public interest, Congress has mandated that the Commission consider competition in its decision-making.6 As noted In re Stock Exch. Options Trading Antitrust Litig., 2001-1 Trade Cas. (CCH) ¶73,186, Congress made clear that "the Commission's responsibility would be to balance the perceived anti-competitive effects of the regulatory policy or decision at issue against the purposes of the Exchange Act that would be advanced thereby and the costs of doing so. Competition would not thereby become paramount to the great purposes of the Exchange Act, but the need for and effectiveness of regulatory actions in achieving those purposes would have to be weighed against any detrimental impact on competition." Senate Banking, Housing, & Urban Affairs Comm., Securities Acts Amendments of 1975, S.Rep. No. 94-75, at 13-14 (1975), reprinted in 1975 U.S.C.C.A.N. 179, 192. Congress also recognized that the SEC's exercise of its expanded authority would be subject to any ultimate judicial reconciliation of the policies of the Exchange Act with those of the antitrust laws. Nevertheless, in this instance, in light of the Commission's extensive oversight obligations it would be proper for the courts to infer an implied repeal with respect to all exchange rules including those filed under Section 19(B)(3)(A).
Finally, proposed Rule 19b-6(b)(6) provides that a trading rule is not eligible for immediate effectiveness if the rule "significantly affects the protection of investors or the public interest or imposes a significant burden on competition."7 If the Commission in its oversight role permits a proposed trading rule to become effective upon filing pursuant to Rule 19b-6(b)(6) and does not abrogate the rule, the Exchange believes that the rule changes should carry an inference that the rule does not impose a significant burden on competition. Thus, the Exchange respectfully disagrees with the Commission's statement that no competitive inference is warranted with respect to "effective upon filing" rule changes filed by SRO.
B. Standard for Determining Fundamental or Structural Changes.
The Exchange also has several concerns with proposed Rule 19b-6(b)(6). Proposed Rule 19b-6(b) provides that an SRO's proposed rule change may take effect upon filing if properly designated by the SRO as "[e]stablishing or changing a trading rule, other than a trading rule that would make fundamental structural changes to the market, . . ." The Exchange believes that this standard is too vague and creates the potential for disagreements between an SRO and the SEC regarding whether a proposed trading rule involves a "fundamental change in the markets." For example, if Rule 19b-6(b)(6) had been in effect in January 2000 when the Phlx filed a proposal to amend its enhanced specialist participation program,8 the Exchange likely would have considered this to fit within the "trading rule" category. In publishing the proposal for comment, however, the Commission found that the proposal "could result in alteration to the current structure of the options markets. . ." Presumably, a filing such as this would not be appropriately filed under proposed Rule 19b-6(b)(6), but the Exchange would not have been in a position to recognize this until after the fact. The only example given by the Commission of a trading rule that would not be eligible for immediate effectiveness is a proposal to change to decimal pricing. The Phlx believes that this single example does not constitute sufficient guidance as to where the Commission intends to draw the line between trading rules that can become effective upon filing and those which must undergo the full notice and comment process pursuant to Section 19(b)(2). The Exchange therefore recommends that the Rule provide a clearer, more objective standard for determining what types of trading rules are appropriately filed under this provision.
C. Use of Commission Abrogation Authority.
In addition, with respect to trading rules, the Exchange is concerned about the Commission's statement in the Proposing Release that it is "prepared to use its abrogation authority more often than in the past." Frequent use by the SEC of its abrogation power with respect to trading rules would be very disruptive to the markets, since it would force an SRO to abandon a trading rule that it had implemented pending refiling under Section 19(b)(2). This is of particular concern in light of the fact that the development and implementation of changes to SRO trading rules often involve significant and costly technology changes (both for SROs and for their members and member organizaions) and therefore it may not be practical (and may impose risk) to abruptly stop trading and revert to prior trading protocols in the event of the issuance of a Commission abrogation order. In turn, this impracticality and risk impacts our many member organizations who often make corollary systems changes of their own.
If trading rules that the Commission believes should be subject to the full Section 19(b)(2) process cannot continue in effect pursuant to Section 19(b)(3)(A) pending Commission review, the SROs may choose to avoid the "effective upon filing" category for changes to their trading rules to avoid the risk of market disruption in the event of a Commission abrogation order. The Exchange therefore believes the Commission should explore procedural avenues to permit exchange trading rules to remain in effect pending Commission review in those situations where the Commission determines that the full Section 19(b)(2) filing process is necessary. For example, instead of abrogating a trading rule, if the SEC determined "upon subsequent review or public comment" that a proposed trading rule was improperly filed pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-6(b)(6) thereunder, the Commission could request that the SRO re-file the proposed rule change under Section 19(b)(1), while at the same time permitting the rule to remain in effect pending consideration of the filing. Alternatively, if the Commission insisted on abrogating the trading rule, it could simultaneously invoke its authority under Section 19(b)(3)(B) of the Act and summarily put into effect the trading rule, on a temporary basis, in order to permit the SRO to continue to rely on the trading rule while the Commission is evaluating the proposal on its merits pursuant to Section 19(b)(2).
D. Commission Rejection of Filings.
While, as noted above, the Phlx also generally supports the requirement of proposed Rule 19b-6 that requires the Commission to issue a release relating to an SRO's proposed rule change within 10 business days of filing with the Commission or within such longer time period as to which the SRO consents in writing, the Phlx notes that proposed Rule 19b-6(f)(1) gives the SEC staff unfettered discretion to determine when a proposed rule change has been properly "filed." For example, Commission staff unilaterally would determine whether a proposed rule change is accompanied by a "clear and accurate statement" of the basis and purpose of a proposed rule. Although the Phlx recognizes that Commission staff must have some discretion in this regard, the Phlx believes that Rule 19b-6 should require the SEC staff to notify an SRO within a specified time frame that it has deemed the proposed rule change to have been improperly filed and provide the SRO with the staff's reasons for such determination. Moreover, the Rule should provide the Commission staff with specific discretion to permit an SRO to correct any immaterial defects, rather than requiring the filing to be rejected and returned to the SRO. Finally, when the Commission rejects a filing, it should be required to provide the reasons for the rejection.
E. Retroactive Effective Date.
The Phlx also takes issue with the statement in footnote 22 of the Proposing Release regarding fee filings, that a proposed rule change that is filed pursuant to Section 19(b)(3)(A) of the Act may not become effective retroactively. The Commission notes by way of example that if a proposed rule change regarding fees was properly filed under Section 19(b)(3)(A) on December 3rd, the fee would be effective as of December 3rd and that the SRO could not apply the fee as of December 1st. The Phlx does not believe that this outcome is required by the Exchange Act, or that there is any impediment to retroactive implementation if permitted under state law and agreed to by the membership. The Phlx notes that, particularly in the area of fees, this interpretation limits the ability of the SROs to make changes to their rules quickly as a competitive response to another markets' changes. This is particularly true in light of the fact that Exchange fees are generally billed on a monthly cycle without prorating such fees in the event of implementation in the middle of a month. Accordingly, the Phlx requests that the Commission reconsider its position on the retroactive effectiveness of proposed rules filed under Section 19(b)(3)(A) of the Act and permit at least certain types of filings (such as fees) to be applied retroactively if permitted under state law and the SRO's charter and by-laws.
F. Officer Certification.
The Exchange believes that the senior officer certification requirement of proposed Rule 19b-6(f)(1)(iv) is both unnecessary and burdensome. The proposed rule would require the chief executive officer, general counsel, or "other officer or director of the SRO that exercises similar authority" to certify the accuracy and completeness of the statements made on Form 19b-6. The Exchange takes seriously its obligations to prepare rule filings carefully and accurately prior to submitting them to the Commission, and already devotes substantial resources to the rule filing process. Moreover, it is already a violation of the Exchange Act to make a false filing with the Commission. Other than the FOCUS financial report for broker-dealers,9 the Exchange is unaware of a similar signature requirement at the chief executive officer or general counsel level in other areas of broker-dealer or exchange regulation.10
If the SEC believes a certification is necessary, the SROs should have greater flexibility in selecting an authorizing official. In most companies, any officer of the company (if authorized by the Board of Directors) and any attorney can bind the company, sign contracts to borrow money, lease real estate or property, purchase equipment, or obtain services. Therefore, if an officer of the Exchange is authorized by the Board to sign rule filings, such officer should also be able to sign the certification, even if that person does not occupy a chief executive officer, general counsel or similar position.
In addition to our concerns with respect to the certification process itself, the Phlx also finds certain of the Form 19b-6 certification items to be inappropriate or overly burdensome. In particular, one of the certification items states that "if applicable, the issuer has agreed to issue the proposed new derivative products, and that issuer has agreed to file under Section 19(b) any required rule changes and submit any necessary documents to comply with the federal securities laws." The Phlx believes that it should be able to file proposed rules relating to new products in advance of an actual issuer agreement. In addition, the Exchange finds that the requirement that the Notice describe "thoroughly" the impact of the proposed rule change on various segments of the self-regulatory organization, including members, member constituencies, and non-members to be excessive and overly burdensome. Finally, in the area of surveillance, it is not clear that the certification requirement can be met in all circumstances. First, not all proposed rule changes require changes to surveillance procedures. More importantly, however, the Exchange objects to certifying that new surveillance procedures are in place at the time of filing, since the Exchange may choose to develop procedures after filing but prior to implementation. Thus, the required certification should be amended to state that appropriate procedures (if any are required) will be in place at the time the new rule is implemented.
G. Other Comments.
The Phlx also would like to comment on certain technical matters addressed in the Proposing Release that we believe will not streamline the rule filing process.
1. Footnote 74 of the Proposing Release states that an SRO must choose whether it wishes to submit a proposed rule change under Section 19(b)(3)(A) for immediate effectiveness or under Section 19(b)(2) for notice and comment and Commission approval. The footnote goes on to state that, unless an "effective upon filing" rule change has been abrogated by the Commission, an SRO may not submit a proposed rule change for immediate effectiveness and then submit the same language under Section 19(b)(2). The Exchange disagrees with the Commission's statement in this regard and cannot find any statutory reason why such a filing should not be permitted. The Exchange may have valid reasons for later seeking a Commission order. The Exchange therefore requests the Commission to withdraw this statement and permit SROs the greatest flexibility with respect to the rule filing process.
2. Certain of the exhibits required under Proposed Rule 19b-6 appear to be different from (and more burdensome than) existing requirements under Rule 19b-4. For example, the Phlx does not believe proposed Exhibit 3 (systems changes notifications) has a counterpart in the existing Form 19b-4. Systems change notifications are already the subject of a separate process of filing and audit review pursuant to the Commission's Automation Review Policy. Similarly, Exhibit 1 appears to be a broad expansion of the filing requirements. For instance, items iv and v request all written communications prepared by the SRO, which could conceivably extend to board and committee materials, minutes, press releases, etc; every staff member's files are "written communications prepared by the SRO." Not only would submitting all of this with each proposed rule change be voluminous, but it renders electronic submission useless. Noting the Paperwork Reduction Act impact, the Exchange believes the process should be more streamlined, not more bureaucratic, and objects to expanding the list of exhibits; the Exchange thus believes that Form 19b-6 could increase the time required to complete a rule filing. Thus, the Exchange disagrees with the Commission's estimate of the burden hours associated with Form 19b-6, particularly the estimate that "a simplified form will reduce by two hours the amount of SRO clerical time required to prepare the average filing."
3. The Commission should make clear that, with respect to minor rule changes under proposed Rule 19b-6(b)(5), if another SRO files a proposed rule as a Section 19(b)(3)(A) filing because it fits within paragraph (b)(1) of proposed Rule 19b-6 (stated policy, practice or interpretation), the Exchange can use paragraph (b)(5) for a similar policy, practice or interpretation even though the other SRO's rule filing was not approved by order under Section 19(b)(2).
4. Paragraph (j) of Proposed Rule 19b-6 should provide for notice to an SRO with respect to releases pertaining to immediate effectiveness as well as orders issued by the Commission under Section 19(b)(2).
5. Paragraph (f)(2) of Proposed Rule 19b-6 provides that filing a "material amendment" to a proposed rule filing shall be deemed a refiling of the rule change for purposes of the timing requirements of Rule 19b-6 and Section 19(b) of the Exchange Act. It is unclear what constitutes a "material amendment" for this purpose, and the Exchange requests that the Commission provide specific guidance with respect to what types of amendments trigger this refiling provision.
6. Proposed Form 19b-6 also fails in many respects to streamline the process. For example, with respect to what should be included in Section 1.A. Purpose, the Exchange believes that requiring a citation to any prior Commission releases impacting the proposal is overbroad, as is the requirement to state the impact on each applicable provisions of federal securities laws and SRO rules. Many proposed rule changes can be viewed as "impacting" certain general rules, such as supervisions requirements and the obligation to make fair and orderly markets; referring to each of these rules in every filing is not particularly instructive, but very burdensome.
* * * *
If the Commission staff have any questions or comments regarding the points made in this comment letter, or need clarification of any of the positions discussed herein, please contact Lanny A. Schwartz, Executive Vice President and General Counsel, at (215) 496-5406.
Meyer S. Frucher
cc: The Honorable Laura S. Unger, Acting Chairperson
The Honorable Issac C. Hunt, Commissioner
The Honorable Paul R. Carey, Commissioner
Annette L. Nazareth, Director, Division of Market Regulation
Robert L.D. Colby, Deputy Director, Division of Market Regulation
Jack Drogin, Assistant Director, Division of Market Regulation
Elizabeth Badawy, Accountant, Division of Market Regulation
Terri Evans, Special Counsel, Division of Market Regulation
Joseph Morra, Special Counsel, Division of Market Regulation
Sonia Patton, Attorney, Division of Market Regulation
|1||See Securities Exchange Act Release No. 43860 (January 19, 2001) (Release Proposing Rule 19b-6 and Form 19b-6) ("Proposing Release").|
|2||In this regard, the recently enacted Commodity Futures Modernization Act authorizes the trading of single stock futures and futures on narrow-based indices.|
|3||As discussed below, however, the Exchange does not support the Commission's more frequent use of its abrogation power with respect to trading rules.|
|4||Pub. L. No. 106-229.|
|5||In Gordon, for example, although the Commission had already decided to end fixed rate commissions (in part because they are anticompetitive), the Supreme Court nonetheless found an implied repeal.|
|6||In particular, Section 3(f) of the Exchange Act requires the Commission, whenever reviewing an SRO's proposed rule change, to "consider, in addition to the protection of investors, whether the [proposed rule change] will promote efficiency, competition, and capital formation." In addition, Section 6(b)(8) of the Exchange Act requires the Commission to determine that an exchange's rules not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act.|
|7||In addition, current Rule 19b-4 provides a similar standard for non-controversial filings and systems changes that are permitted to become effective upon filing.|
|8||See Securities Exchange Act Release No. 43100 (July 31, 2000).|
|9||See Form X-17A-5.|
|10||For example, in Form BD (the registration for broker-dealers ) there is no specific requirement as to who may sign the form on behalf of a registrant.|