[Federal Register Volume 64, Number 4 (Thursday, January 7, 1999)]
[Notices]
[Pages 1039-1040]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-296]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 40861; File No. SR-BSE-98-14]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change by the Boston
Stock Exchange, Inc. Relating to its Arbitration Rules
December 29, 1998.
Pursuant of Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby
given that on December 9, 1998 \3\ the Boston Stock Exchange, Inc.
(``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 Exchange. The
Commission is publishing this notice and order to solicit comments on
the proposed rule change from interested persons and to grant
accelerated approval to the proposal.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4
\3\ Technical, non-substantive corrections were made pursuant to
a December 29, 1998 conversation between Karen Aluise, Boston Stock
Exchange, and Kathy England, Assistant Director, Division of Market
Regulation, SEC.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Exchange seeks to amend its arbitration rules regarding
arbitration of employment discrimination claims. The text of the
proposed rule changes are as follows; additions are italicized.
* * * * *
CHAPTER XXXII
Arbitration
Arbitration Code
Sec. 1(a) Members--Except as provided in subparagraph (c)(1) below,
. . .
(b) Customers or Non-Members--Except as provided in subparagraph
(c)(1) below, . . .
(c) Jurisdiction--. . .
(1) A claim alleging employment discrimination, including any
sexual harassment claim, in violation of a statute should be eligible
for arbitration only where the parties have agreed to arbitrate the
claim after it has arisen.
* * * * *
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 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 III below. The Exchange 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
(a) The purpose of the proposed rule change is to amend the
Exchange's arbitration rules to exclude from mandatory arbitration any
employee dispute between a registered representative or associated
persons and a member organization alleging employment discrimination in
violation of a statute, including sexual harassment, unless the parties
to arbitrate the claim after it has arisen. This change follows the
lead of the New York Stock Exchange (``NYSE'') \4\ and the National
Association of Securities Dealers (``NASD'') \5\ concerning arbitration
of employment discrimination claims in their respective fora, and is
intended to prevent such claims from finding haven in the Exchange's
arbitration forum unless there is a post-dispute arbitration agreement.
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\4\ See Exchange Act Release No. 40858 (December 19, 1998)
______ FR ____________ (January ____, 1998) (SR-NYSE-98-28).
\5\ See Exchange Act Release No. 40109 (June 22, 1998) 63 FR
35299 (June 29, 1998).
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(b) The statutory basis for the proposed rule change is Section
6(b)(5) of the Exchange Act, in that it is designed to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, and is not designed to permit
unfair discrimination between customers, issuers, brokers or dealers.
[[Page 1040]]
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 Exchange Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
The Exchange is requesting accelerated approval of the proposed
rule change pursuant to Section 19(b)(2) to ensure that this rule
becomes effective on January 1, 1999 in conjunction with the
effectiveness of comparable rules of the NYSE, which was approved by
the Commission on December 29, 1998). Other self-regulatory
organizations (``SROs'') are adopting these rules or issuing
interpretive releases to provide uniformity throughout the securities
industry.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposal is
consistent with the Exchange Act. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, N.W., 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 at the
Commission's Public Reference Room. 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 number SR-BSE-98-14 and
should be submitted by January 28, 1999.
V. Conclusion
The Exchange is requesting accelerated approval of the proposed
rule change pursuant to Section 19(b)(2) to ensure that this rule
becomes effective on January 1, 1999 in conjunction with the
effectiveness of comparable NYSE rules. It is expected that in the near
future other SROs will adopt similar rules or issue interpretive
releases to provide uniformity throughout the securities industry. To
prevent prospective plaintiffs from being disadvantaged by any
inconsistency in the effective dates of SROs rule changes or
interpretive releases, the Commission finds good cause for approving
the proposal prior to the 30th day after the date of publication of
notice of the filing in the Federal Register.
It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\6\ that the proposal, SR-BSE-98-14, be and hereby is
approved on an accelerated basis.\7\
\6\ 15 U.S.C. 78s(b)(2).
\7\ In approving the proposal, the Commission has considered the
rule's impact on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-296 Filed 1-6-99; 8:45 am]
BILLING CODE 8010-01-M
