[Federal Register Volume 64, Number 4 (Thursday, January 7, 1999)]
[Notices]
[Pages 1040-1041]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-303]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40856; File No. SR-BSE-98-12]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change, as Amended, by
the Boston Stock Exchange, Inc. Relating to its Minor Rule Violation
Plan.
December 29, 1998.
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 December 9, 1998, the Boston Stock Exchange, Inc. (``BSE'' 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. On December
23, 1998, the Exchange submitted Amendment No. 1 to the proposed rule
change.\3\ The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons. For the reasons
discussed below, the Commission is granting accelerated approval of the
proposed rule change, as amended.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Letter from Karen A. Aluise, Vice President, BSE, to Ann
Vlcek, Division of Market Regulation, Commission, dated December 23,
1998 (``Amendment No. 1''). In Amendment No. 1, the BSE clarified
language regarding the Summary Fines for violation of the Post
Rules.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Exchange seeks to adopt written policies and procedures to
address certain administrative issues related to the new trading floor
(``Floor'') \4\ in an effort to control access to secure areas and to
give jurisdiction over posts to the Floor Facilities Committee
(``Committee''). The text of the Exchange's proposal is available at
the Exchange and at the Commission.
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\4\ The BSE is scheduled to move into its new trading floor on
January 4, 1999.
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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 BSE 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
The purpose of the proposed rule change is to add two trading floor
rules in regard to post assignment and telecommunications room (``Comm
Room'') access to the Exchange's Minor Rule Violation Plan's Summary
Fine Schedule. This will enable the Exchange to address violations of
these two rules, which are deemed minor in nature due to their
administrative function, through the use of fines rather than a full
disciplinary procedure.
The proposed Summary Fines regarding Post Rules provide that any
post relocation or alteration of any post without the prior written
consent of the Committee; refusal of a post location change by the
Committee; use of an unassigned post for any purpose without the prior
written consent of the Exchange; storage of materials in an
unauthorized area of the Floor; and/or placing or installing any
personal equipment (computers, file cabinets, chairs, bulletin boards,
tables, shelves,
[[Page 1041]]
desks, etc.) without the prior written authorization of the Exchange
could result in a $250 fine for the initial offense and a $500 fine for
subsequent offenses by the Exchange for any damage to a post and/or the
removal of materials and/or equipment.
The proposed Summary Fines regarding Comm Room Rules provides that
not obtaining a permit number from the Exchange prior to any
installation or servicing of hardware or telecommunications equipment
(i.e., voice and data); unauthorized vendor access to the Comm Room or
the Trading Floor without prior notification to the Exchange and
accompaniment by an authorized Exchange staff member or floor member;
and/or unauthorized equipment removal from any Exchange location could
result in a $250 fine for the initial offense and a $500 fine for
subsequent offenses. It further provides that these fines are in
addition to any costs incurred by the Exchange for any loss of, damage
to and/or removal of equipment.
The statutory basis for the proposed rule change is Section 6(b)(5)
of the Act,\5\ 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.
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\5\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The BSE does not believe that the proposed rule change will impose
any burden on competition that is not necessary or appropriate in
furtherance of the 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. 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 Act. 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. Copies of such filing will also be available for
inspection and copying at the principal office of the BSE. All
submissions should refer to File No. SR-BSE-98-12 and should be
submitted by January 28, 1999.
IV. Commission's Findings and Order Granting Accelerated Approval
of the Proposed Rule Change
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange and, in
particular, the requirements of Section 6 of the Act.\6\ Section
6(b)(5) \7\ of the Act states that the rules of an exchange must be
designed to foster cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information with respect to,
and facilitating securities transactions. These rules also must help to
remove impediments to and perfect the mechanism of a free and open
market. The Commission believes the proposed Summary Fines regarding
the Post Rules and Comm Rules are consistent with this provision of the
Act in that they will enable the Exchange to appropriately address
violations of these rules.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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The Exchange's proposal is also consistent with the requirements in
Sections 6(b)(1) \8\ and 6(b)(6) \9\ of the Act that the rules of an
exchange enforce compliance with and provide appropriate discipline for
violations of the Exchange's rules and the rules under the Act.
Moreover, because BSE Chapter XVIII Section 4 provides procedural
rights to the person fined, the proposal provides a fair procedure for
the disciplining of members and persons associated with members,
consistent with 6(b)(7) \10\ and 6(d)(1) \11\ of the Act.
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\8\ 15 U.S.C. 78f(b)(1).
\9\ 15 U.S.C. 78f(b)(6).
\10\ 15 U.S.C. 78f(b)(7).
\11\ 15 U.S.C. 78f(d)(1).
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Pursuant to Section 19(b)(2),\12\ the Commission finds good cause
for approving the proposed rule change, as amended, prior to the 30th
day after the date of publication of notice thereof in the Federal
Register.\13\ The Commission notes that the Exchange moves to its new
trading floor on January 4, 1999, and believes that accelerated
approval of the proposed rule change will enable the Exchange to better
enforce compliance with its Post Rules and Comm Rules without any
unnecessary delay. In addition, the Commission notes that the proposed
rule change is generally administrative in nature and, as such, does
not raise any competitive or investor protection issues.
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\12\ 15 U.S.C. 78s(b)(2).
\13\ In reviewing this proposal, the Commission has considered
its impact on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\14\ that the proposed rule change, as amended, (SR-BSE-98-12) is
hereby approved on an accelerated basis.
\14\ 15 U.S.C. 78s(b)(2).
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-303 Filed 1-6-99; 8:45 am]
BILLING CODE 8010-01-M
