Pacific Board Balks

WASHINGTON, March 1—The Pacific Coast Stock Exchange has informed the. Securities Commission that it will not voluntarily change its rules to expel from membership brokerage firms that do most of their business for institutional investors’ with which they are affiliated.

The exchange said that It could not even participate in a moratorium on the admission of new “institutionl members” without some assurances that it would be immune from prosecution under the antitrust laws if it took this step.

The,,Pacific exchange thus became the second regional stock exchange to indicate its intention to resist the new rules regarding institutional membership on exchanges that have been proposed by the commission. The Philadelphia‐Baltimore‐Washington Stock Exchange made its opposition known earlier and, unlike the Pacific exchange, did not merely protest, but said it would take necessary legal steps to prevent adoption of what the S.E.C. wanted.

The Pacific exchange's position was made known in a letter to the S.E.C.'s chairman, William J. Casey, from the exchange's president, Thomas P. Phelan.

‘ Most of the other major and minor stock exchanges have also responded’ to Mr. Casey's request for their views on the commission's institutional membership proposals and most have accepted them with some major reservations on additional’ suggestions.

The Midwest Stock Exchange., for example, said it saw no reason why the rules should require brokerage affiliates of institutions to do at least 80 per cent of their business with organizations and persons other than the affiliate. A 50”'per cent requirement, which is what the Midwest exchange has now, would be enough this exchange said.

The Midwest and American stock exchanges both suggested that new rules be written giving the exchanges at least same power to regulate the activities of the affiliates of brokers. Both indicated they thought the power would seldom be used.

The Midwest exchange also suggested that special regulatory powers should be made for foreign “parents” of brokerage affiliates.

The New York Stock ExchangeAqceded to all the commission's proposals but said it was nor yet ready to decide just how much business with non‐affiliates a member‐broker should be required to do.

In a related development, it was disclosed that Senator Wallace Bennett of Utah, the senior Republican on the Senate Banking Committee, had requested that hearings be held this month on the issue of institutional membership, which several members of Congress have said is a matter for Congress; rather than the S.E.C., to decide.

Senator , Bennett addressed his request to the committee's chairman, John J. Sparkman, Democrat of Alabama, who sent it to the chairman of the securities stilkUmmittee, Harrison A. Williams Jr., Democrat of New Jersey, with the suggestion that honored.

Senator Williams was said to feel, however, that there was not enough time to prepare for hearings, before the latter part of April.