01-26484. Self-Regulatory Organizations; Order Granting Approval of Proposed Rule Change by the Philadelphia Stock Exchange, Inc. To Amend Exchange Rule 625, Trading Floor Training, Equity Floor Procedure Advice F-30, and Options Floor Procedure ...

October 12, 2001.

On August 9, 2001, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) 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 amend Phlx Rule 625 (“Trading Floor Training”), Equity Floor Procedure Advice F-30, and Options Floor Procedure Advice F-30 (collectively referred to as “Advice F-30”) ^[3] to allow the Exchange to require from time to time its members and their respective personnel to attend mandatory training sessions related to conduct, health and safety on the Exchange's equity and options trading floors (collectively referred to as “trading floor”). The Phlx also proposed to amend the fine schedule in Equity Floor Procedure Advice F-30 to be consistent with the fine schedule in the corresponding Options Floor Procedure Advice.^[4] Notice of the proposed rule change appeared in the Federal Register on August 30, 2001.^[5] The Commission received no comments on the proposed rule change. This order approves the proposed rule change.

The Commission finds that the proposed rule change is consistent with the requirements of Section 6 of the Act ^[6] in general, and the rules and regulations thereunder.^[7] In particular, the Commission believes that the proposal is consistent with Section 6(c)(3)(B) of the Act,^[8] which provides, among other things, that a national securities exchange may require its members to meet certain standards of training, experience and competence as prescribed by the rules of an exchange. The Commission believes that requiring, providing notice of, and conducting training sessions related to conduct, health and safety on the trading floor by the Exchange should promote a safer work environment by informing Exchange members and their respective personnel of important issues related to the Exchange's trading floor.

The Commission also finds that the proposed rule change is consistent with Section 6(b)(4) of the Act,^[9] which requires that the rules of the exchange provide for the equitable allocation of reasonable dues, fees, and other charges to exchange members, in that the Exchange's proposed fine schedule for its Equity Floor Procedure is consistent with the already existing fine schedule of the Exchange's Option Floor Procedures.^[10]

It is therefore ordered,pursuant to Section 19(b)(2) of the Act,^[11] that the proposed rule change (SR-Phlx-2001-77) be, and hereby is, approved.

For the Commission, by the Division of Market Regulation, pursuant to the delegated authority.^[12]

Margaret H. McFarland,

Deputy Secretary.

Footnotes

1.  15 U.S.C. 78s(b)(1).

2.  17 CFR 240.19b-4.

3.  Advice F-30 and the accompanying fine schedules are part of the Exchange's minor rule violation and reporting plan (“minor rule plan”). The Exchange's minor rule plan, codified in Phlx Rule 970 (“Floor Procedure Advices: Violations, Penalties, and Procedures”), contains floor procedure advices with accompanying fine schedules such that a minor rule violation and reporting plan citation could be issued. Rule 19d-1(c)(2) under the Act authorizes national securities exchanges to adopt minor rule violation plans for summary discipline and abbreviated reporting. 17 CFR 240.19d-1(c)(2). Rule 19d-1(c)(1) under the Act requires prompt filing with the Commission of any final disciplinary actions. 17 CFR 240.19d-1(c)(1). However, minor rule violations not exceeding $2,500 are deemed not final, thereby permitting periodic, as opposed to immediate reporting.

4.  The fine schedule applicable to Options Floor Procedure Advice F-30 was recently amended and reflects the same fines as proposed herein. See Securities Exchange Act Release No. 44537 (July 11, 2001), 66 FR 37511 (July 18, 2001) (order approving SR-Phlx-2001-36).

5.  See Securities Exchange Act Release No. 44742 (August 23, 2001), 65 FR 45885.

6.  15 U.S.C. 78f.

7.  In approving this proposal, the Commission has considered its impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).

8.  15 U.S.C. 78f(c)(3)(B).

9.  15 U.S.C. 78f(b)(4).

10.  See note 4, supra.

11.  15 U.S.C. 78s(b)(2)

12.  17 CFR 200.30-3(a)(12).