Self-Regulatory Organizations; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change by the Pacific Stock Exchange, Incorporated, Relating to a One Year Extension of Municipal Bond Trading Pilot Program

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-34911; File No. SR-PSE-94-32]

Self-Regulatory Organizations; Notice of Filing and Order

Granting Accelerated Approval of Proposed Rule Change by the Pacific

Stock Exchange, Incorporated, Relating to a One Year Extension of

Municipal Bond Trading Pilot Program

October 28, 1994.

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

(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on October

26, 1994, the Pacific Stock Exchange Incorporated (``PSE'' or

``Exchange'') filed with the Securities and Exchange Commission

(``Commission'' or ``SEC'') the proposed rule change as described in

Items I and II below, which Items have been prepared by the Exchange.

The Commission is publishing this notice to solicit comments on the

proposed rule change from interested persons, and is simultaneously

granting accelerated approval of the proposed rule change.

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

of the Proposed Rule Change

The PSE proposes to extend the municipal bond trading pilot program

for an additional year until November 2, 1995.

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 and basis for the

proposed rule change and discussed any comments it received on the

proposed rule change. The text of these statements 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

On March 7, 1994, the Commission approved an Exchange proposal to

establish new rules for the listing and trading of municipal securities

on the Exchange.\1\ The Commission approved the pilot for an interim

period of 120 days through July 5, 1994.\2\ On July 5, 1994, the

Commission granted an additional 120 day extension of the pilot through

November 2, 1994.\3\ The Exchange has not yet begun to trade any

municipal securities. The Exchange is now requesting a one year

extension of the pilot in order to allow for proper evaluation of the

program in the event that it lists any municipal securities during that

period.

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\1\See Exchange Act Release No. 33721 (March 7, 1994), 59 FR

11636 (March 11, 1994) (granting temporary accelerated approval to

File No. SR-PSE-94-05).

\2\Id. at 59 FR 11638.

\3\Exchange Act Release No. 34317, 59 FR 35546 (July 12, 1994).

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The Exchange believes that the proposed rule change is consistent

with Section 6(b) of the Act, in general, and furthers the objectives

of Section 6(b)(5), in particular, in that it will promote just and

equitable principles of trade, foster cooperation and coordination with

persons engaged in regulating, clearing, settling and processing

information with respect to, and facilitating transactions in

securities, and, in general will contribute to the protection of

investors and the public interest.

B. Self-Regulatory Organizations 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

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

approving the proposed rule change prior to the thirtieth day after

publication of the notice in the Federal Register. PSE believes it

appropriate to approve the proposed rule change so that its authority

to list municipal securities does not lapse. The Commission finds that

the proposed rule change extending the PSE pilot program is consistent

with the requirements of the Act and the rules and regulations

thereunder applicable to the PSE and, in particular, the requirements

of Section 6, and the rules and regulations thereunder.

The Commission finds good cause for approving the proposed rule

change on an accelerated basis prior to the thirtieth day after the

date of publication of the notice of filing thereof in that the pilot

program will expire on November 2, 1994, without reauthorization. The

Commission believes that extension of the pilot is desirable in that it

will permit the exchange to evaluate its program prior to filing a

request for permanent approval.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views and

arguments concerning the foregoing. Persons making written submissions

should file six copies thereof with the Secretary, Securities and

Exchange Commission, 450 Fifth Street NW., Washington, DC 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 Room, 450 Fifth Street NW., Washington,

DC 20549. Copies of such filing will also be available for inspection

and copying at the principal office of the PSE. All submissions should

refer to File No. SR-PSE-94-32 and should be submitted by November 25.

It is therefore ordered, pursuant to Section 19(b)(2) of the Act,

that the proposed rule change be, and hereby is, approved through

November 2, 1995.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority. 17 CFR 200.30-3(a)(12) (1993).

Margaret H. McFarland,

Secretary.

[FR Doc. 94-27357 Filed 11-3-94; 8:45 am]

BILLING CODE 8010-01-M