[Federal Register Volume 60, Number 128 (Wednesday, July 5, 1995)]
[Notices]
[Pages 35095-35096]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16394]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35912; File No. SR-Amex-95-25]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the American Stock Exchange,
Inc. Relating to Rule 590 Minor Rule Violation Fine Systems
June 28, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. Sec. 78s(b)(1), notice is hereby given that on
June 20, 1995, the American Stock Exchange, Inc. (``Amex'' 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. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is amending its Minor Rule Violation Fine Systems
(Rule 590) to add a number of additional minor rule violations to Rule
590. The text of the proposed rule change is as follows [new text is
italicized; deleted text is bracketed]:
Minor Rule Violation Fine Systems
Part I
General Rule Violations
Rule 590
(a) through (d): No Change.
(e) The [maximum] fines authorized under Paragraphs (g) and (h)
of Part 1 of this Rule [(i.e.,] for violations [subsequent to] for a
second offense [as set forth in Paragraphs (g) and (h)),] and for
subsequent offenses may be imposed [for] in the case of a first or
second offense if warranted under the circumstances.
(f): No Change.
(g) The following is a list of the rule violations and
applicable fines that may be imposed by the Exchange's Enforcement
Department pursuant to Part 1 of this Rule.
1 through 6: No Change.
7. [Failure to submit audit trail data or failure to submit
accurate audit trail data. (Article V, Section (4)(h), (j) and (k)
and Rule 31)] Violation of the Exchange's policy with respect to the
proper submission of audit trail data, including both the failure to
submit audit trail data and the failure to submit accurate audit
trail data.
8 through 12: No Change.
(h) The following is a list of the rule violations and
applicable fines that may be imposed by the Exchange's Minor Floor
Violations Disciplinary Committee pursuant to Part 1 of this Rule.
1 through 7: No Change.
8. Violation of the ``2, 1, and 1/2 Point Rule.'' (Rule 154,
Commentary .08)
9. Failure to comply with Stop Order procedures and approval
requirements. (Rule 154, Commentary .04)
10. Failure to obtain Floor Official approval when establishing,
increasing, or liquidating a position. (Rule 170, Commentary .01 and
.02)
11. Violation of Intermarket Trading System (ITS) rules relating
to Pre-Opening Applications (Rule 232) and Trade Throughs, Locked
Markets, and the Block Trade Policy (Rule 236).
12. Failure to comply with the requirements relating to agency
crosses. (Rule 126(g), Commentary .02)
13. Failure to submit a properly completed Specialist Floor
Broker Questionnaire. (Rule 30)
14. Failure to obtain Exchange approval of member or member firm
proprietary electronic devices or systems used on the Exchange
floor. (Rule 220)
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
Currently under Paragraph (g) of Part 1 of Rule 590, the Exchange's
Enforcement Department is authorized, after a matter has been referred
to it, to impose fines ranging from $500 to $2,500 against individuals
and from $1,000 and $5,000 against member firms, for a series of minor
rule violations listed in Paragraph (g). The individual or member firm
may plead guilty and pay the fine or contest the charge and request a
hearing before an Exchange Disciplinary Panel. Under Paragraph (h), the
Exchange's Minor Floor Violation Disciplinary Committee is authorized
to impose the same fines against individuals and member firms for a
series of additional minor rule violations listed in Paragraph (h). The
minor violations that the Disciplinary Committee is authorized to hear
are primarily floor related, while the minor violations that the
Enforcement Department is responsible for generally relate to
``upstairs'' activities.
The Exchange's Minor Rule Violation Fine Systems have worked well
in practice, providing for a convenient and quick resolution of minor
rule violations. As a result, the Exchange would like to increase the
number of minor violations covered by rule 590. It is proposed that a
number of minor floor related violations now be added to Paragraph (h)
of the rule. The following is a list of the additional violations for
which the Minor Floor Violation Disciplinary Committee will have fining
authority.
1. Violation of the ``2, 1, and \1/2\ Point Rule.'' (Rule 154,
Commentary .08)
2. Failure to comply with Stop Order procedures and approval
requirements. (Rule 154, Commentary .04)
3. Failure to obtain Floor Official approval when establishing,
increasing, or liquidating a position. (Rule 170, Commentary .01 and
.02)\1\
\1\The Exchange intends to utilize the fining authority under
Rule 590 only with respect to the most technical and nonsubstantive
violations of the Floor Official requirement under Rule 170. All
major violations of this provision will be referred to the
Enforcement Department for appropriate action.
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4. Violation of Intermarket Trading System (ITS) rules relating to
Pre-Opening Applications (Rule 232) and Trade Throughs, Locked Markets,
and the Block Trade Policy. (Rule 236)
5. Failure to comply with the requirements relating to agency
crosses. (Rule 126(g), Commentary .02)
6. Failure to submit a properly completed Specialist Floor Broker
Questionnaire. (Rule 30)
7. Failure to obtain Exchange approval of member or member firm
proprietary electronic devices or systems used on the Exchange floor.
(Rule 220)
In addition to the above minor rule violations being added to Rule
590, the Exchange proposes to amend Paragraph
[[Page 35096]]
(e) of Part 1 of the rule, which currently authorizes the imposition of
the maximum fine for third and subsequent offenses in the case of a
first or second offense if warranted under the circumstances. To give
the Exchange greater flexibility in the administration of the rule, the
rule is being amended to also authorize the imposition of the fine for
a second offense in the case of a first offense, again if warranted
under the circumstances. Finally, Paragraph (g) is being amended to
cite to Exchange policy rather than a rule with regard to Violation 7
relating to member firm submission of audit trail data.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the Act
in general and furthers the objectives of Section 6(b)(6) in particular
in that is intended to assure that Exchange members and member firms
are appropriately disciplined for rule violations.
B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change will impose no burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because 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) does not become operative for 30 days from June 20, 1995, the
date on which it was filed, 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 and Rule 19b-4(e)(6)
thereunder.
At any time within 60 days of the filing of the 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. Persons making written submissions
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. Sec. 552, will be available for inspection and copying at
the Commission's Public Reference Section, 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 Exchange. All
submissions should refer to File No. SR-Amex-95-25 and should be
submitted by July 26, 1995.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-16394 Filed 7-3-95; 8:45 am]
BILLING CODE 8010-01-M