Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto by the Philadelphia Stock Exchange, Inc. Relating to Extending the Circuit Breaker Pilot Program

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-34800; File No. SR-Phlx-94-44]

Self-Regulatory Organizations; Notice of Filing of Proposed Rule

Change and Amendment No. 1 Thereto by the Philadelphia Stock Exchange,

Inc. Relating to Extending the Circuit Breaker Pilot Program

October 6, 1994.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

(``Act''),\1\ notice is hereby given that on September 12, 1994, 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 self-regulatory organization. On September

30, 1994, the Exchange Filed Amendment No. 1 to the proposed rule

change.\2\ 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\In Amendment No. 1, the Phlx requests accelerated treatment

for its proposal pursuant to Section 19(b)(2) of the Act to allow

the circuit breaker pilot program to continue without interruption.

See. letter from Gerald D. O'Connell, First Vice President,

Regulation and Trading Operations, Phlx, to Michael Walinskas,

Branch Chief, Division of Market Regulation, Commission, dated

September 30, 1994 (``Amendment No. 1'').

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Self-Regulatory Organization's Statement of the Terms of Substance of

the Proposed Rule Change

The Phlx proposes to extend the effectiveness of its circuit

breaker pilot program, which appears in Phlx Rule 133, until October

31, 1995, Generally, Rule 133 provides for a one hour trading halt if

the Dow Jones Industrial Average (``DJIA'') declines 250 or more points

from its previous day's closing level, and, thereafter, a two hour

trading halt if the DJIA declines 400 points from the previous day's

closing level.

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 self-regulatory organization

included statements concerning the purpose of an basis for the proposed

rule change and discussed any comments it received on the proposed rule

change. The text of these statement may be examined at the places

specified in Item IV below. The self-regulatory organization 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

The purpose of this proposal is to extend the Exchange's circuit

breaker pilot program for a one-year period, in order to afford the

Exchange and the Commission additional time to evaluate the

effectiveness of the pilot program. The Exchange's circuit breaker rule

provides an important safety mechanism, in conjunction with the circuit

breakers of other self-regulatory organizations (``SROs''). The

Commission approved the Exchange's circuit breaker proposal on a

temporary basis in 1988.\3\ Thereafter, the Exchange's circuit breaker

pilot program was extended five times, most recently until October 31,

1994.\4\

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\3\Securities Exchange Act Release No. 26386 (December 22,

1988), 53 FR 52904.

\4\Securities Exchange Act Release Nos. 27370 (October 23,

1989), 54 FR 43881; 28580 (October 25, 1990), 55 FR 45895; 29868

(October 28, 1991), 56 FR 56535; 26942 (November 6, 1992), 57 FR

53157; and 33120 (October 29, 1993), 58 FR 59503.

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The Exchange believes that its proposed rule change is consistent

with Section 6 of the Act in general, and in particular, with Section

6(b)(5), in that it is designed to promote just and equitable

principles of trade, prevent fraudulent and manipulative acts and

practices, remove impediments to and perfect the mechanism of a free

and open market and national market system, as well as to protect

investors and the public interest, by providing a reasonable means to

retard a rapid, one-day market decline that can have a destabilizing

effect on the nation's financial markets and the participants in these

markets.

(B) Self-Regulatory Organization's Statement on Burden on Competition

The Phlx does not believe that the proposed rule change will impose

any inappropriate burden on competition.

(C) Self-Regulatory Organization's Statement on Comments on the

Proposed Rule Change Received From Members, Participants, or Others

Written comments on the proposed rule change were neither solicited

nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing

for Commission Action

The Exchange requests that the Commission find good cause for

accelerating approval of its proposed rule change pursuant to Section

19(b)(2) of the Act. The Exchange notes that Rule 133 expires on

October 31, 1994, which will be prior to the thirtieth day after

publication of notice in the Federal Register of the Exchange's

proposal.

Within 35 days of the date of publication of this notice in the

Federal Register or within such longer period (i) As the Commission may

designate up to 90 days of such date if it finds such longer period to

be appropriate and publishes its reasons for so finding or (ii) as to

which the self-regulatory organization consents, the Commission will:

(a) By order approve such proposed rule change, or

(b) Institute proceedings to determine whether the proposed rule

change should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views and

arguments concerning the foregoing. Persons making written submission

should file six copies thereof with the Secretary, Securities and

Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.

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 Section, 450 Fifth Street, N.W.,

Washington, D.C. Copies of such filing will also be available for

inspection and copying at the principal office of the above-mentioned

self-regulatory organization. All submissions should refer to File No.

SR-Phlx-94-44 and should be submitted by November 4, 1994.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.\5\

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\5\17 CFR 200.30-3(a)(12) (1993).

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Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-25481 Filed 10-13-94; 8:45 am]

BILLING CODE 8010-01-M