Notices. SECURITIES AND EXCHANGE COMMISSION

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A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

BILLING CODE 6325-38-M SECURITIES AND EXCHANGE COMMISSION [File No. 1-32318] Issuer Delisting; Notice of Application of Devon Energy Corporation To Withdraw Its Common Stock, $.10 Par Value, From Listing and Registration on the American Stock Exchange LLC October 18, 2004. On October 8, 2004, Devon Energy Corporation, a Delaware corporation (“Issuer”) filed an application with the Securities and Exchange Commission (“Commission”), pursuant to Section 12(d) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 12d2-2(d) thereunder, 2 to withdraw its common stock, $.10 par value, (“Security”), from listing and registration on the American Stock Exchange LLC (“Amex” or “Exchange”). 1 15 U.S.C. 78 *l* (d). 2 17 CFR 240.12d2-2(d).

The Board of Directors (“Board”) of the Issuer unanimously approved a resolution on September 27, 2004 to withdraw the Issuer's Security from listing on the Amex and to list on the New York Stock Exchange, Inc. (“NYSE”). The Board states that following reasons factored into its decision to withdraw the Issuer's Security from the Exchange:

(i)To avoid the direct and indirect costs of, and the division of the market resulting from, dual listing on the Amex and the NYSE; and

(ii)it was in the best interest of the Issuer to withdraw its Security from the Amex and list on the NYSE. The Issuer states that the Security ceased trading on the Amex at the close of business on October 11, 2004 and commence trading on the NYSE on October 12, 2004. The Issuer stated in its application that it has complied with all the applicable laws in effect in Delaware, in which it is incorporated, and with the Amex's rules governing an issuer's voluntary withdrawal of a security from listing and registration. The Issuer's application relates solely to the Security's withdrawal from listing on the Amex and from registration under Section 12(b) of the Act, 3 and shall not affect its obligation to be registered under Section 12(g) of the Act. 4 3 15 U.S.C. 78 *l* (b). 4 15 U.S.C. 78 *l* (g). Any interested person may, on or before November 12, 2004, comment on the facts bearing upon whether the application has been made in accordance with the rules of the Amex, and what terms, if any, should be imposed by the Commission for the protection of investors. All comment letters may be submitted by either of the following methods: Electronic Comments: • Send an e-mail to *rule-comments@sec.gov.* Please include the File Number 1-32318 or; Paper comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. All submissions should refer to File Number 1-32318. This file number should be included on the subject line if e-mail is used. To help us 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/delist.shtml* ). Comments are also available for public inspection and copying in the Commission's Public Reference Room, 450 Fifth Street, NW., Washington, DC 20549. All comments received will be posted without change; we do not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. The Commission, based on the information submitted to it, will issue an order granting the application after the date mentioned above, unless the Commission determines to order a hearing on the matter. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 5 5 17 CFR 200.30-3(a)(1). Jonathan G. Katz, Secretary. [FR Doc. E4-2798 Filed 10-21-04; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50545; File No. SR-NASD-2004-114] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Order Approving Proposed Rule Change, as Amended, Relating to Fees for Depth of Book Data in Exchange-Listed Securities in the Nasdaq Market Center October 14, 2004. On July 26, 2004, the National Association of Securities Dealers, Inc. (“NASD”), through its subsidiary, The Nasdaq Stock Market, Inc. (“Nasdaq”), filed with the Securities and Exchange Commission (“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 establish a monthly per-controlled device fee for depth of book information for exchange-listed securities in the Nasdaq Market Center. On August 24, 2004, Nasdaq filed Amendment No. 1 to the proposed rule change. 3 The proposed rule change, as amended, was published for comment in the **Federal Register** on September 9, 2004. 4 The Commission received no comment letters on the proposal, as amended. On October 6, 2004, 5 Nasdaq submitted Amendment No. 2 to the proposed rule change. This order approves the proposed rule change, as amended. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Letter from Mary M. Dunbar, Vice President and Deputy General Counsel, Nasdaq, to Katherine A. England, Assistant Director, Division of Market Regulation (“Division”), Commission, dated August 23, 2004 (“Amendment No. 1”). Amendment No. 1 replaced the original proposed rule change in its entirety. 4 *See* Securities Exchange Act Release No. 50304 (September 1, 2004), 69 FR 54714. 5 *See* letter from Edward S. Knight, Executive Vice President, Nasdaq, to Katherine A. England, Assistant Director, Division, Commission, dated October 6, 2004 (“Amendment No. 2”). Amendment No. 2 made a minor technical change to the proposed rule text, as such, it is not subject to notice and comment. The Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities association. 6 In particular, the Commission believes that the proposal is consistent with Section 15A(b)(5) of the Act, 7 which requires, among other things, that the rules of an association provide for the equitable allocation of reasonable dues, fees, and other charges among members and issuers and other persons using any facility or system which an association operates or controls. 6 In approving this proposed rule change, the Commission has considered its impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 7 15 U.S.C. 78 *o* -3(b)(5). Specifically, the Commission believes that Nasdaq's dissemination of multiple levels of firm quotes/orders in exchange-listed securities should increase the market information available to market participants. The Commission believes the proposed fee is reasonable in that Nasdaq represents that the $6 monthly fee is based on anticipated message traffic through its new data feed, OpenView, in relation to the message traffic amounts and prices for similar data services currently in operation on Nasdaq. *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act 8 the proposed rule change (SR-NASD-2004-114), as amended, is approved. 8 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E4-2800 Filed 10-21-04; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50538; File No. SR-PCX-2004-89] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc., To Allow Market Maker Quotation Spreads in PCX Plus of up to $5 October 14, 2004. 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 September 27, 2004, the Pacific Exchange, Inc. (“PCX” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) 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. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The PCX is proposing to amend PCX Rule 6.37 to allow quotation spreads for options that trade on the Exchange's electronic trading platform, PCX Plus, to be $5 regardless of the price of the bid. The text of the proposed rule change appears below. Additions are underlined. Rule 6 Options Trading Obligations of Market Makers RULE 6.37. (a)-No Change.

(b)No Change.

(1)Bidding and/or offering so as to create differences of no more than:

(A).25 between the bid and the offer for each option contract for which the bid is less than $2,

(B)no more than .40 where the bid is $2 or more but does not exceed $5,

(C)no more than .50 where the bid is more than $5 but does not exceed $10,

(D)no more than .80 where the bid is more than $10 but does not exceed $20, and

(E)no more than $1 when the last bid is $20.10 or more, provided that the Exchange may establish differences other than the above for one or more series or classes of options.

(F)The two Trading Officials or the Exchange may, with respect to options trading with a bid price less than $2, establish bid-ask differentials that are no more than $0.50 wide (“double-width”) when the primary market for the underlying security:

(a)Reports a trade outside of its disseminated quote (including any Liquidity Quote); or

(b)disseminates an inverted quote. The imposition of double-width relief must automatically terminate when the condition that necessitated the double-width relief ( *i.e.,* condition

(a)or (b)) is no longer present. Market makers that have not automated this process may not avail themselves of the relief provided herein ( *i.e.* , they may not manually adjust prices). *(G) Options, designated by the Exchange, that trade on PCX Plus may be quoted electronically with a difference not to exceed $5 between the bid and offer regardless of the price of the bid. The $5 quote width shall only apply to classes trading on PCX Plus and only following the opening rotation in each security (i.e., the widths specified in paragraph (b)(1)(A)-(F) above shall apply during opening rotation). Quotes given in open outcry in PCX Plus issues may not be quoted with $5 widths and instead must comply with the legal width requirements specified in paragraph (b)(1)(A)-(F) above.* (2)-(5)—No Change. (c)-(h)—No Change. Commentary .01-.09—No Change. 3 3 In a telephone call, the PCX agreed to a minor change clarifying that the Exchange is not proposing to amend Commentaries .01 through .09 of PCX Rule 6.37. Telephone conversation between Steven B. Matlin, Senior Attorney, Regulatory Policy, PCX, and Yvonne Fraticelli, Special Counsel, Office of Market Supervision, Division of Market Regulation, Commission, on October 13, 2004. 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 1. Purpose The purpose of the proposed rule change is to substantially relax the quotation spread requirements on options designated by the Exchange that trade on the Exchange's electronic trading platform, PCX Plus. Currently, the PCX's rules contain maximum quotation spread requirements that vary from $.25 to $1, depending on the price of the option. Each PCX market maker independently is subject to these requirements. According to the PCX, while the primary purpose of the spread requirements is to help maintain narrow spreads, the spread requirements also result in individual market makers sometimes quoting at prices that they believe are unnecessarily narrow, potentially exposing them to greater risk if markets move quickly. The PCX believes that, due to the market making system in PCX Plus, the quotation spread requirements may not be necessary to ensure tight and competitive quotations on the PCX. In this regard, the PCX states that the market structure in PCX Plus creates strong incentives for competing market makers and other market participants to disseminate competitive prices. In PCX Plus, each market maker quotes independently and customers and professional traders can enter limit orders on the PCX's book. The PCX automatically collects this trading interest, calculates the PCX best bid and offer (“BBO”), and disseminates the BBO to the investing public. Furthermore, the PCX allocates trading interest on PCX Plus based upon the price and size of the interest. Under the PCX's trading algorithm, the PCX allocates volume to trading interest at the best price. The larger the size of a person's quote or order at the best price, the more trading interest that person receives. The PCX believes that this provides strong incentives for market makers and other market participants to enter quotes and orders that improve the price and depth of the market. The PCX believes that in this model, market forces provide sufficient discipline to maintain narrow and competitive quotation spreads. Accordingly, the PCX proposes to expand the allowable spreads for options designated by the Exchange that trade on the Exchange's electronic trading platform, PCX Plus. The $5 quote width shall only apply to options trading on PCX Plus and only following the opening rotation in each security. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 4 in general, and furthers the objectives of Section 6(b)(5) of the Act, 5 in particular, because it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. 4 15 U.S.C. 78f(b). 5 15 U.S.C. 78f(b)(5). 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 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 proposed rule change has been designated by the PCX as a “non-controversial” rule change pursuant to Section 19(b)(3)(A) of the Act 6 and subparagraph (f)(6) of Rule 19b-4 thereunder. 7 Consequently, because the foregoing rule change:

(1)Does not significantly affect the protection of investors or the public interest;

(2)does not impose any significant burden on competition; and

(3)does not become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, and the Exchange provided the Commission with written notice of its intent to file the proposed rule change at least five days prior to the filing date, it has become effective pursuant to Section 19(b)(3)(A) of the Act 8 and Rule 19b-4(f)(6) thereunder. 9 A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative prior to 30 days after the date of filing. However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The PCX has requested that the Commission waive the 30-day operative delay specified in Rule 19b-4(f)(6) because the PCX's proposal provides quote width relief similar to that provided under the rules of other exchanges. 10 Accordingly, the PCX believes that its proposal does not raise new regulatory issues, significantly affect the protection of investors or the public interest, or impose any significant burden on competition. In addition, the PCX believes that its request is consistent with the protection of investors and the public interest and that good cause exists, including the PCX's need to maintain competition and efficiency. 6 15 U.S.C. 78s(b)(3)(A). 7 17 CFR 240.19b-4(f)(6). 8 15 U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b-4(f)(6). 10 The proposed rule change is based on International Securities Exchange, Inc. (“ISE”) Rule 803(b)(4) and Chicago Board Options Exchange, Inc. (“CBOE”) Rule 8.7(b)(iv)(A). *See* Securities Exchange Act Release Nos. 50015 (July 14, 2004), 69 FR 43872 (July 22, 2004) (order approving File No. SR-ISE-2003-22); and 50079 (July 26, 2004), 29 FR 45858 (July 30, 2004) (order approving File No. SR-CBOE-2004-44). The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. 11 Specifically, the Commission believes that allowing the PCX to implement $5 quotation spread parameters like those adopted by the ISE and the CBOE will help the PCX to compete with those exchanges. 12 The Commission believes that the PCX's proposal raises no new issues or regulatory concerns that the Commission did not consider in approving the ISE and CBOE proposals. For these reasons, the Commission designates that the proposal become operative immediately. 11 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 12 *See* note 9, *supra.* At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate the rule change if it appears to the Commission that the action is necessary or appropriate in the public interest, for the protection of investors, or would otherwise further the purposes of the Act. 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 *rule-comments@sec.gov.* Please include File Number SR-PCX-2004-89 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. All submissions should refer to File Number SR-PCX-2004-89. 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 Section, 450 Fifth Street, NW., Washington, DC 20549. Copies of this filing also will be available for inspection and copying at the principal office of the PCX. 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-PCX-2004-89 and should be submitted on or before November 12, 2004. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 13 13 17 CFR 200.30-3(a)(12). Margaret H. McFarland, Deputy Secretary. [FR Doc. E4-2793 Filed 10-21-04; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-50549; File No. SR-PCX-2004- 87] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Pacific Exchange, Inc., Relating to Trades Resulting From Obvious Error October 15, 2004. 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 September 21, 2004, the Pacific Exchange, Inc. (“PCX” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The proposed rule change has been filed by the PCX as a “non-controversial” rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder. 4 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change PCX proposes to amend its rules pertaining to trade nullification and price adjustment procedures. Additions are italicized. Deletions are bracketed. Rule 6.87

(g)Trade Nullification and Price Adjustment Procedures *The Exchange shall either bust a transaction or adjust the execution price of a transaction that results from an Obvious Error as provided in this Rule.* *(1) Definition of Obvious Error. For purposes of this Rule only, an Obvious Error will be deemed to have occurred when the execution price of a transaction is higher or lower than the Theoretical Price for the series by an amount equal to at least the amount shown below:* Theoretical Price Minimum Amount *Below $2: .25* *$2 to $5: .40* *Above $5 to $10: .50* *Above $10 to $20: .80* *Above $20: 1.00* *(2) Definition of Theoretical Price. For purposes of this Rule only, the Theoretical Price of an option is:* *(A) if the series is traded on at least one other options exchange, the last bid price with respect to an erroneous sell transaction and the last offer price with respect to an erroneous buy transaction, just prior to the trade, disseminated by the competing options exchange that has the most liquidity in that option; or* *(B) if there are not quotes for comparison purposes, as determined by designated personnel of the Exchange.* *(3) Obvious Error Procedure. The Exchange shall administer the application of this Rule as follows.* *(A) Notification. If a Market Maker on the Exchange believes that it participated in a transaction that was the result of an Obvious Error, it must notify the Exchange within five

(5)minutes of the execution. If an OTP Holder or OTP Firm not serving as a Market Maker on the Exchange believes that an order it executed on the Exchange was the result of an Obvious Error, it must notify the Exchange within twenty

(20)minutes of the execution. Absent unusual circumstances, the Exchange will not grant relief under this Rule unless notification is made within the prescribed time periods.* *(B) Adjust or Bust. The Exchange will determine whether there was an Obvious Error as defined above. If it is determined that an Obvious Error has occurred, the Exchange shall take one of the following actions listed below. Upon taking final action, the Exchange shall promptly notify both parties to the trade.* *(i) Where each party to the transaction is a Market Maker on the Exchange, the execution price of the transaction will be adjusted by the Exchange to the prices provided in paragraphs

(aa)and

(bb)below unless both parties agree to adjust the transaction to a different price or agree to bust the trade within ten

(10)minutes of being notified by the Exchange of the Obvious Error.* *(aa) Erroneous buy transactions will be adjusted to their Theoretical Price: plus $.15 if the Theoretical Price is under $3 and plus $.30 if the Theoretical Price is at or above $3.* *(bb) Erroneous sell transactions will be adjusted to their Theoretical Price: minus $.15 if the Theoretical Price is under $3 and minus $.30 if the Theoretical Price is at or above $3.* *(ii) Where at least one party to the Obvious Error is not a Market Maker on the Exchange, the trade will be busted by the Exchange unless both parties agree to an adjustment price for the transaction within thirty

(30)minutes of being notified by the Exchange of the Obvious Error.* 5 5 With the Exchange's consent, the Commission has made technical corrections to the text of the proposed rule change. Telephone conversation between Mai Shiver, Director and Senior Counsel, PCX, and Susie Cho, Special Counsel, and Frank Genco, Special Counsel, Division of Market Regulation (“Division”), Commission, on October 14, 2004. [(1) Mutual Agreement: The determination as to whether an Auto-Ex trade was executed at an erroneous price may be made by mutual agreement of the affected parties to a particular transaction. A trade may be nullified or adjusted on the terms that all parties to a particular transaction agree. In the absence of mutual agreement by the parties, a particular trade may only be nullified or adjusted when the transaction results from an Obvious Error as provided in this Rule.

(2)Obvious Error Subject to Trade Nullification or Price Adjustment: Absent mutual agreement as provided in Rule 6.87(g)(1), parties to a trade may have a trade nullified or its price adjusted if:

(i)any such party makes a documented request within the time specified in Rule 6.87(g)(3); and

(ii)one of the conditions below is met: A. The trade resulted from a verifiable disruption or malfunction of an Exchange execution, dissemination, or communication system that caused a quote/order to trade in excess of its disseminated size ( *e.g.,* a quote/order that is frozen, because of an Exchange system error, and repeatedly traded) in which case trades in excess of the disseminated size may be nullified; or B. The trade resulted from a verifiable disruption or malfunction of an Exchange dissemination or communication system that prevented a member from updating or canceling a quote/order for which the OTP Holder is responsible where there is Exchange documentation providing that the OTP Holder sought to update or cancel the quote/order; or C. The trade resulted from an erroneous print disseminated by the underlying market which is later cancelled or corrected by the underlying market where such erroneous print resulted in a trade higher or lower than the average trade in the underlying security during the time period encompassing two minutes before and after the erroneous print, by an amount at least five times greater than the average quote width for such underlying security during the time period encompassing two minutes before and after the erroneous print. For purposes of this Rule, the average trade in the underlying security shall be determined by adding the prices of each trade during the four minute time period referenced above (excluding the trade in question) and dividing by the number of trades during such time period (excluding the trade in question); or D. The trade resulted from an erroneous quote in the Primary Market (as defined in Rule 6.1(b)(27)) for the underlying security that has a width of at least $1.00 and that width is at least five times greater than the average quote width for such underlying security during the time period encompassing two minutes before and after the dissemination of such quote. For the purposes of this rule, the average quote width shall be determined by adding the quote widths of each separate quote during the four minute time period referenced above (excluding the quote in question) and dividing by the number of quotes during such time period (excluding the quote in question); or E. The execution price of the trade is higher or lower than the mid-point of the Best Bid and Offer (among all of the exchanges other than the PCX) by an amount equal to at least the bid/ask spread provided in Rule 6.37(b)(1). The bid/ask spread set forth in Rule 6.37(b)(1) will also apply to LEAPS and options subject to unusual market conditions. In the event the bid/ask spread in the underlying is greater than the bid/ask spread set forth in Rule 6.37(b)(1), the Exchange will apply the bid/ask spread differential set forth in Rule 6.37(b)(3). F. The trade resulted in an execution price in a series quoted no bid and at least one strike price below (for calls) or above (for puts) in the same class were quoted no bid at the time of the erroneous execution. G. The trade is automatically executed at a price where the OTP Holder sells $0.10 or more below parity. Parity describes an option contract's total premium when that premium is equal to its intrinsic value. Parity for calls is measured by reference to the offer price of the underlying security in the Primary Market at the time of the transaction minus the strike price for the call. Parity for puts is measured by reference to the strike price for the put minus the bid price of the underlying security in the Primary Market at the time of the transaction.

(3)Obvious Error Procedure. Two Trading Officials will administer the application of this Rule as follows: A. Notification. If an OTP Holder believes that it participated in a transaction that was the result of an Obvious Error, it must notify two Trading Officials within five

(5)minutes of the execution. If an Order Entry Firm representing a public customer believes an order it executed on the Exchange was the result of an Obvious Error, it must notify the Exchange within twenty

(20)minutes of the execution. Absent unusual circumstances, two Trading Officials will not grant relief under this Rule unless notification is made within the prescribed time periods. B. Adjust or Nullify. Two Trading Officials will determine whether the execution is subject to a trade nullification or price adjustment. If two Trading Officials determine that one of the conditions of Rule 6.87(g)(2) has been met and that the complaining party has timely documented a request for relief, then a trade will be adjusted or nullified as follows:

(1)Where each party to the transaction is a Market Maker on the Exchange, or the trade involves a limit order that may be adjusted to its limit, the Exchange will adjust the execution price of the transaction within ten

(10)minutes of two Trading Officials making such determination. In such case, the adjusted price will be the last bid (offer) price, just prior to the trade, from the exchange providing the highest total contract volume in the option for the previous sixty

(60)days with respect to an erroneous bid (offer) entered on the Exchange. If there is no quote for comparison purposes, then the adjusted price of an option will be determined by two Trading Officials; or

(2)Where at least one party to the transaction is not a Market Maker on the Exchange or where the trade does not involve a limit order that may be adjusted to its limit, the Exchange will nullify the transaction within ten

(10)minutes of two Trading Officials making such determination.

(3)Upon taking final action, the two Trading Officials will promptly notify both parties to the trade.] Commentary: [.01 In no case will the two Trading Officials involved in an obvious error determination include a person related to a party to the trade in question.] .01 [02] All determinations made by the [two Trading Officials] Exchange under subsection [(g)(2)] (g)(3) will be rendered without prejudice as to the rights of the parties to the transaction to submit a dispute to arbitration. *.02* [.03] Nothing in this rule prevents a potentially aggrieved party from appealing the decision of [two Trading Officials] *the Exchange* pursuant to Rule [11] *10.14* of the Exchange rules. *.03 When the Exchange determines that an Obvious Error has occurred and action is warranted under Rule 6.87(g)(3)(B) above, the identity of the parties to the trade will be disclosed to each other in order to encourage conflict resolution.* 6 6 With the Exchange's consent, the Commission has made technical corrections to the text of the proposed rule change. Telephone conversation between Mai Sharif Shiver, Director/Senior Counsel, PCX, and Susie Cho, Special Counsel, Division, Commission, on October 12, 2004. *.04 Buyers of options with a zero bid and $.05 offer (i.e., a Theoretical Price of $.05) may request that their execution be busted if at least the two strikes below (for calls) or above (for puts) in the same options class were quoted with a zero bid and $.05 offer at the time of the execution. Such buyers must follow the procedures of Rule 6.87(g)(3) above.* *.05 For purposes of Rule 6.87 (g)(2)(A), the competing options exchange with the most liquidity will be the options exchange that had the highest total contract volume in the options class for the previous two months (e.g., if an obvious error occurs on March 9, the total contract volume from January 8 to March 9 will be used).* *.06 For purposes of Rule 6.87(g)(3)(B), an “erroneous sell transaction” is one in which the price received by the person selling the option is erroneously low, and an “erroneous buy transaction” is one in which the price paid by the person purchasing the option is erroneously high.* Rule 10.14(a). General Provisions. This Rule provides the procedure for persons aggrieved by any of the following actions taken by the Exchange to apply for an opportunity to be heard and to have the action reviewed. These actions are: (1)-(4)—No change.

(5)actions taken pursuant to Rules 6.37, 6.82(f), [and] 6.82(g), *and 6.87;* or (6)—No change. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange 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 Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose In 2003, the Commission approved a proposal by the Exchange to adopt PCX Rule 6.87(g), which delineated

(1)the circumstances under which an error would be subject to a trade adjustment or nullification, and

(2)the procedures that the Exchange would follow in order to effect such adjustments and nullifications. 7 Because OTP Holders and OTP Firms operating on the Exchange also serve as members of other national options exchanges, and because other options exchanges have moved towards rule simplification in order to eliminate uncertainty in the event of an error, the Exchange believes it would be advantageous to adopt a simplified procedure whereby OTP Holders and OTP Firms would have the ability to rely on a uniform standard for evaluating their response to a transaction that qualifies as an obvious error. The Exchange has consulted with its OTP Holders and OTP Firms and determined that the structure adopted by the International Stock Exchange, Inc. (“ISE”) pursuant to ISE Rule 720 for obvious error resolution provides a sound, simplified procedure. As a result, the Exchange seeks to amend its Rule 6.87(g) to make it substantially identical to ISE's provisions. 7 *See* Securities Exchange Act Release No. 48538 (September 25, 2003), 68 FR 56858 (October 2, 2003) (approving File No. PCX-2002-01). Currently, Exchange Rule 6.87(g) provides that, absent mutual agreement, parties to a trade may have a trade nullified or its price adjusted if:

(1)The trade resulted from a verifiable disruption or malfunction of an Exchange system that caused trades in excess of the disseminated size;

(2)the trade resulted from a verifiable disruption or malfunction of an Exchange system that prevented an OTP Holder or OTP Firm from updating or canceling a quote/order for which the OTP Holder or OTP Firm is responsible;

(3)the trade resulted from an erroneous print disseminated by the underlying market which is later cancelled or corrected by the underlying market;

(4)the trade resulted from an erroneous quote in the Primary Market for the underlying security (under specified conditions);

(5)the execution price of the trade is higher or lower than the mid-point of the best bid and offer by an amount equal to at least the bid/ask spread;

(6)the trade resulted in an execution price in a series quoted no bid and at least one strike price below (for calls) or above (for puts) in the same class were quoted no bid at the time of the erroneous execution; or

(7)the trade is automatically executed at a price where the market maker sells $0.10 or more below parity. As proposed, the amended PCX Rule 6.87(g) would provide that the Exchange 8 shall either bust a transaction or adjust the execution price of a transaction only when the execution price of a transaction is higher or lower than a theoretical price for the series by an amount equal to at least the amount shown below: 8 The Exchange represents that, for purposes of PCX Rule 6.87(g) and its associated Commentaries, references to the Exchange and Exchange personnel shall mean senior operations personnel in the Exchange's Department of Options Operations. Telephone conversation between Mai Sharif Shiver, Director/Senior Counsel, PCX, and Susie Cho, Special Counsel, and Frank Genco, Special Counsel, Division, Commission, on October 12, 2004. Theoretical price Minimum amount Below $2 .25 $2 to $5 .40 Above $5 to $10 .50 Above $10 to $20 .80 Above $20 1.00 For purposes of PCX Rule 6.87(g), the theoretical price of an option would be the last bid price with respect to an erroneous sell transaction and the last offer price with respect to an erroneous buy transaction, just prior to the trade, disseminated by the competing options exchange that has the most liquidity in that option (“Theoretical Price”). If there are no quotes for comparison purposes, the Theoretical Price would be determined by designated personnel of the Exchange. The Exchange also proposes to modify the procedure it uses to adjust or nullify an execution that occurred as a result of an obvious error. The Exchange proposes that the administration and application of the obvious error procedure be handled by the Exchange itself, rather than by two trading officials. The Exchange also seeks to modify its adjust or nullify rules to eliminate most of the nuances between PCX Rule 6.87(g) and ISE Rule 720. Specifically, the Exchange's current rules provide that the execution price of a trade would be adjusted if the transaction is between market makers or if it involves a limit order that may be adjusted to its limit. In such case, the trade would be adjusted to the last bid or offer from the exchange providing the highest total contract volume in the option for the previous 60 days with respect to the erroneous bid or offer entered on the Exchange. The Exchange's current rules also provide that where a party to a transaction is not a market maker on the Exchange or where the trade involves a limit order that may be adjusted to its limit, the Exchange would nullify the transaction. The Exchange proposes to adopt the following procedure instead: *Notification:* If a market maker on the Exchange believes that it participated in a transaction that was the result of an obvious error, it must notify the Exchange within five

(5)minutes of the execution. If an OTP Holder or OTP Firm not serving as a market maker on the Exchange believes that an order it executed on the Exchange was the result of an obvious error, it must notify the Exchange within twenty

(20)minutes of the execution. Absent unusual circumstances, the Exchange would not grant relief under this rule unless notification is made within the prescribed time periods. *Adjust or Bust:* If it is determined that an obvious error has occurred, the Exchange would take one of the following actions listed below. Upon taking final action, the Exchange would promptly notify both parties to the trade. Where each party to the transaction is a market maker on the Exchange, the execution price of the transaction would be adjusted by the Exchange unless both parties agree to bust the trade within ten

(10)minutes of being notified by the Exchange of the obvious error. Erroneous buy transactions would be adjusted to their Theoretical Price plus $.15 if the Theoretical price is under $3, or plus $.30 if the Theoretical Price is at or above $3. Erroneous sell transactions would be adjusted to their Theoretical Price minus $.15 if the Theoretical Price is under $3, or minus $.30 if the Theoretical Price is at or above $3. Where at least one party to the obvious error is not a market maker on the Exchange, the trade would be busted by the Exchange unless both parties agree to an adjustment price for the transaction within thirty

(30)minutes of being notified by the Exchange of the obvious error. The Exchange further seeks to renumber its Commentary provisions to PCX Rule 6.87 and add new ones that relate to:

(1)Disclosing the identity of parties to an obvious error transaction (Commentary .03 to PCX Rule 6.87);

(2)inclusion of options with zero bid and offered at a nickel (Commentary .03 to PCX Rule 6.87—modified from the Exchange's existing Rule 6.87(g)(2)(F)—relating to no bid erroneous executions);

(3)defining the options exchange providing the most liquidity (Commentary .05 to PCX Rule 6.87); and

(4)defining erroneous sell transactions and erroneous buy transactions (Commentary .06 to PCX Rule 6.87). The Exchange also seeks to add a cross reference to its hearing and review rule, PCX Rule 10.14(a)(5), to include PCX Rule 6.87 as a rule from which a potentially aggrieved party may appeal a decision under PCX Rule 10.14. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 9 in general, and Section 6(b)(5) of the Act, 10 in particular, because it is designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts and practices, and to protect investors and the public interest. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any significant burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change

(1)does not significantly affect the protection of investors or the public interest;

(2)does not impose any significant burden on competition; and

(3)by its terms, does not become operative until 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. Furthermore, the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change. Consequently, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 11 and Rule 19b-4(f)(6) thereunder. 12 11 15 U.S.C. 78s(b)(3)(A). 12 17 CFR 240.19b-4(f)(6). The PCX has requested that the Commission waive the 30-day operative delay. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. The Commission believes that waiver of the 30-day operative delay would enable the Exchange to implement the proposal as quickly as possible. In addition, the Commission notes that the proposal to amend the PCX obvious error rule is substantially identical to ISE Rule 720. Thus, the Commission does not believe that the proposed rule change raises any new regulatory issues. 13 For these reasons, the Commission designates the proposal to be effective and operative upon filing with the Commission. 14 13 *See* Securities Exchange Act Release No. 48097 (June 26, 2003), 68 FR 39604 (July 2, 2003) (amending ISE obvious error rule). 14 For purposes only of accelerating the operative date of this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). At any time within 60 days of the filing of this 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. 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 *rule-comments@sec.gov* . Please include File Number SR-PCX-2004-87 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. All submissions should refer to File Number SR-PCX-2004-87. 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 Section, 450 Fifth Street, NW., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of PCX. 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-PCX-2004-87 and should be submitted on or before November 12, 2004. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 15 Jill M. Peterson, Assistant Secretary. 15 17 CFR 200.30-3(a)(12). [FR Doc. E4-2799 Filed 10-21-04; 8:45 am] BILLING CODE 8010-01-P SMALL BUSINESS ADMINISTRATION [Declaration of Disaster #3620] State of Florida (Amendment #6) In accordance with a notice received from the Department of Homeland Security—Federal Emergency Management Agency—effective October 8, 2004, the above numbered declaration is hereby amended to establish the incident period for this disaster as beginning September 3, 2004, and continuing through October 8, 2004. All other information remains the same, *i.e.,* the deadline for filing applications for physical damage is December 11, 2004 and for economic injury the deadline is June 6, 2005. (Catalog of Federal Domestic Assistance Program Nos. 59002 and 59008) Dated: October 14, 2004. Cheri L. Cannon, Acting Associate Administrator for Disaster Assistance. [FR Doc. 04-23640 Filed 10-21-04; 8:45 am]

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