# Self-Regulatory Organizations; Order Granting Approval to Proposed Rule Change by the Philadelphia Stock Exchange, Inc. Relating to Regulation 2 (Foods, Liquids and Beverages) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A94-15754 ## Record - **Collection:** Federal Register - **Document type:** Uncategorized Document - **Published:** June 29, 1994 ## Text SECURITIES AND EXCHANGE COMMISSION [Release No. 34-34249; File No. SR-Phlx-94-13] Self-Regulatory Organizations; Order Granting Approval to Proposed Rule Change by the Philadelphia Stock Exchange, Inc. Relating to Regulation 2 (Foods, Liquids and Beverages) June 23, 1994. I. Introduction On March 10, 1994, the Philadelphia Stock Exchange, Inc. (``Phlx'' or ``Exchange'') submitted to the Securities and Exchange Commission (``SEC'' or ``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 amend Phlx Regulation 2 (Foods, Liquids and Beverages) to permit the respective floor standing committees to waive the Regulation's prohibition against foods, liquids and beverages on the trading floor.\3\ --------------------------------------------------------------------------- \1\15 U.S.C. 78s(b)(1) (1988). \2\17 CFR 240.19b-4 (1993). \3\Regulation 2 is a regulation of order and decorum adopted pursuant to Phlx Rule 60. Rule 60 permits Exchange officials and Floor officials to assess fines not exceeding $1,000 for violations of regulations pertaining to the administration of, and order, decorum, health, safety and welfare on the Exchange, or to refer such violations to the Exchange's Business Conduct Committee where higher fines or other sanctions may be imposed, in accordance with Phlx Rule 960. --------------------------------------------------------------------------- The proposed rule change was published for comment in Securities Exchange Act Release No. 33815 (March 25, 1994), 59 FR 15474 (April 1, 1994). No comments were received on the proposal. This order approves the proposed rule change. II. Description of the Proposal Currently, Regulation 2, which was adopted pursuant to Rule 60, prohibits foods, liquids and beverages on the trading floor and the lower level areas adjacent to the trading floor, except for the lunchrooms. The first violation of Regulation 2 is punishable by an official warning, with the second and third violations punishable by a fine of $100 and $200, respectively. The fourth violation and any violation thereafter is punishable by a sanction that is discretionary with the Business Conduct Committee. The Phlx proposes to add a provision to Regulation 2 (Foods, Liquids and Beverages) stating that any provision of Regulation 2 may be waived by the chairperson of the appropriate floor standing committee or a designee thereof. Any waiver of the prohibition must be for a specified period of time and would require prior notice to the trading floor. In addition, reinstituting the prohibition would require prior notice to the floor. The Exchange states that the proposed rule change is consistent with Section 6(b)(5) of the Act, in that it is designed to promote just and equitable principles of trade and protect investors and the public interest by fostering an orderly environment on the trading floor. The Exchange also believes that the proposal is consistent with Section 6(b)(6) of the Act because it would continue to provide that members of the Exchange be appropriately disciplined for violations of the rules of the Exchange. III. Discussion 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 and, in particular, with the requirements of Section 6(b)(5) of the Act.\4\ --------------------------------------------------------------------------- \4\15 U.S.C. 78f (1988). --------------------------------------------------------------------------- The Commission believes that the ability to waive the prohibition against foods, liquids and beverages on the trading floor and the lower level areas adjacent to the trading floor\5\ is consistent with Section 6(b)(5) of the Act, which requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade and protect investors and the public interest. The ability to waive the prohibition against bringing foods, liquids and beverages on the trading floor for a specific period of time would provide the Exchange with the flexibility to permit floor personnel to bring foods and beverages to the floor work area when necessary or prudent, such as during periods of market volatility or high volume trading. As a result, the ability to waive the restrictions in Regulation 2 should enhance the members' ability to engage in transactions in securities and, thereby, protect investors and the public interest. --------------------------------------------------------------------------- \5\The prohibitions in Regulation 2 do not apply to the Exchange lunchrooms. See Regulation 2. --------------------------------------------------------------------------- It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\6\ that the proposed rule change (SR-Phlx-94-13) is approved. --------------------------------------------------------------------------- \6\15 U.S.C. 78s(b)(2) (1988). For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\7\ --------------------------------------------------------------------------- \7\17 CFR 200.30-3(a)(12) (1991). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 94-15754 Filed 6-28-94; 8:45 am] BILLING CODE 8010-01-M --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A94-15754. Public record. Not legal advice.