[Federal Register Volume 61, Number 210 (Tuesday, October 29, 1996)]
[Notices]
[Page 55833]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27694]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37852; File No. SR-CBOE-96-47]
Self-Regulatory Organizations; Order Approving Proposed Rule
Change by the Chicago Board Options Exchange, Incorporated Relating to
Permitting a Subject of an Exchange Investigation To Submit a
Videotaped Response in Lieu of or in Addition to a Written Response
October 22, 1996.
I. Introduction
On July 10, 1996, the Chicago Board Options Exchange, Incorporated
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission'') a proposed rule change pursuant
to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'')
\1\ and Rule 19b-4 thereunder.\2\ The rule change amends CBOE Rules to
permit the subject of an Exchange investigation to submit a videotaped
presentation to the Exchange's Business Conduct Committee in response
to Exchange staff's notice given pursuant to Rule 17.2(d).
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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Notice of the proposed rule change, together with the substance of
the proposal, was provided by issuance of a release (Securities
Exchange Act Release No. 37646, September 5, 1996) and by publication
in the Federal Register (61 FR 48181, September 12, 1996). No comments
were received. This order approves the proposed rule change.
II. Description of the Proposal
The rule change approved today permits the subject of an Exchange
investigation to submit a videotaped presentation to the Business
Conduct Committee (``BCC'') in response to Exchange staff's notice
given pursuant to Rule 17.2(d). That notice describes the general
nature of allegations against a Subject of the Exchange investigation
(``Subject''), and the specific rules that appear to have been
violated. This videotaped presentation may be submitted to the BCC in
lieu of or in addition to submitting a written statement as permitted
by Rule 17.2(d).
Under existing Rule 17.2, if, after conducting an investigation,
Exchange staff finds that there are reasonable grounds to believe that
a rule violation has been committed, the Exchange staff submits a
written report to the BCC.\3\ Prior to submitting the report to the
BCC, the Exchange staff notifies the Subject of the general nature of
the allegations and the specific provisions of the rules or regulations
that appear to have been violated.
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\3\ Exchange staff may draft and submit a report to the BCC if
it finds that there are not reasonable grounds to believe a
violation has been committed; however, such a report is not required
under Exchange rules.
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Pursuant to Rule 17.2(d), except when the BCC determines that
expeditious action is required, the Subject then has fifteen (15) days
from the date of the Exchange staff's notice to submit a written
statement to the BCC explaining why no disciplinary action should be
taken. The rule change permits the Subject's statement to be made in a
videotaped format instead of or in addition to submitting a written
response.
The Exchange stated that it decided to propose this change because
a number of members have indicated that they would be more comfortable
presenting their positions orally, rather than attempting to draft
persuasive response letters. The Exchange also stated that it believes
that permitting a Subject of an investigation to respond on videotape,
which could then be viewed by BCC members at their convenience, would
be beneficial to the BCC and the Subject.
III. Conclusion
The Commission finds that the rule change is consistent with the
provisions of Section 6(b)(7) of the Act. The rule change is designed
to improve the speed, fairness, and efficiency of disciplinary hearings
by providing Subjects added flexibility to determine the format of
statements permitted under Rule 17.2(d) that they believe will best
serve their interests, thereby promoting a fair procedure for the
disciplining of members and persons associated with members.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change SR-CBOE-96-47 be, and hereby is,
approved.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\4\
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\4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-27694 Filed 10-28-96; 8:45 am]
BILLING CODE 8010-01-M
