[Federal Register Volume 60, Number 236 (Friday, December 8, 1995)]
[Notices]
[Pages 63087-63088]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29922]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36543; File No. SR-CSE-95-09]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Cincinnati Stock Exchange, Inc., Relating to Including
Within the Exchange's Minor Rule Plan Rule 4.2 Which Deals with the
Furnishing of Records to the Exchange
November 30, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on November
16, 1995, the Cincinnati Stock Exchange, Inc. (``CSE'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') a
proposed rule change to amend its Minor Rule Violation Plan\1\ 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.
\1\ Rule 19d-1(c)(2) under the Act, 17 CFR 240.19d-1(c)(2),
authorizes national securities exchanges to adopt minor rule
violation plans for the summary discipline and abbreviated reporting
of minor rule violations by exchange members and member
organizations.
[[Page 63088]]
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange hereby amends Rule 8.14 regarding the imposition of
fines for minor violations. The text of the proposed rule change is as
follows (new text is italicized; deleted text is bracketed]:
Rule 8.14 Imposition of Fines for Minor Violation(s) of Rule
Interpretations and Policies: .01
(d) Rule 4.1, Rule 4.2 and Interpretation, thereunder, requiring
the submission of responses to Exchange requests for trading data
within specified time period.
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 CSE 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 CSE 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
Rule 8.14 \2\ authorizes the Exchange, in lieu of commencing a
disciplinary proceeding before a hearing panel, to impose a fine not to
exceed $2,500, on any member, member organizations, or registered or
non-registered employee of a member organization for a minor violation
of certain specified Exchange rules.\3\
\2\ Rule 8.14 was approved by the Commission on September 1,
1988. See Securities Exchange Act Release No. 26053 (September 1,
1988), 53 FR 34851 (September 8, 1988) (order approving File No. SR-
CSE-88-1). A subsequent addition of a rule to the Rule 8.14
Violations List was made in Securities Exchange Act Release No.
27609 (January 11, 1990), 55 FR 1758 (January 18, 1990) (order
approving File No. SR-CSE-89-6).
\3\ CSE Rule 8.14, entitled Imposition of Fines for Minor
Violation(s) of Rules, contains a list of minor rule violations as
to which the Exchange may impose such fines. Although the CSE's
Board of Trustees makes the initial determination of whether a CSE
rule violation is ``minor'' for purposes of CSE Rule 8.14, this
determination is subject to Commission approval pursuant to Section
19(d)(1) of the Act and paragraph (c)(2) of Rule 19d-1 under the
Act. See Release No. 26053 n.5, supra note 2.
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The purpose of the Rule 8.14 procedure is to improve the Exchange's
ability to efficiently meet its statutory enforcement responsibilities
by establishing a program for the imposition of fines for minor
violations of Exchange Rules and by designating certain specified Rule
violations as minor Rule violations.\4\ In File No. SR-CSE-88-1,\5\
which initially set forth the provisions and procedures of Rule 8.14,
the Exchange indicated that it would periodically prepare and announce
to its members and member organizations a revised list of Exchange
Rules for violation of which the Exchange may impose fines pursuant to
Rule 8.14, as well as the fines that may be imposed for such violation.
\4\ Id.
\5\ Id.
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The Exchange is presently adding Rule 4.2 \6\ to the list of rules
subject to possible imposition of fines under Rule 8.14 procedures. The
purpose of the proposed Rule Change is to clarify that Exchange Rule
4.2 is a part of the Exchange's Minor Rule Violation Rule. Exchange
Rule 4.2 deals with the furnishing of information to the Exchange upon
request. Rule 4.2 is not currently included in the specific list of
Rules to which the Minor Rule Plan applies, however, the text listed
under Rule 4.1 which is noted therein, addresses the requirements of
Rule 4.2 as well as Rule 4.1. The Exchange believes that the specific
inclusion of Rule 4.2 will make it clear to members that the Minor Rule
Plan provisions apply to it.
\6\ CSE rule 4.2 provides that ``every member shall furnish to
the Exchange, upon request and in a time and manner required by the
Exchange, current copies of any financial information filed with the
Commission, as well as any records, files or financial information
pertaining to transactions executed on or through the Exchange.
Further, the Exchange shall be allowed access, at any time, to the
books and records of the member in order to obtain or verify
information related to transactions executed on or through the
Exchange or activities relating to the Exchange.''
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b)(6) of the
Act \7\ in that it will provide a procedure whereby member
organizations can be ``appropriately disciplined'' in those instances
when a rule violation is minor in nature, but a sanction more serious
than a warning or cautionary letter is appropriate. The rule change
provides a fair procedure for imposing such sanctions, in accordance
with the requirements of Sections 6(b)(7) and 6(d)(1) of the Act.\8\
\7\ 15 U.S.C. 78f(b)(6).
\8\ 15 U.S.C. 78f(b)(7) and 78f(d)(1).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The CSE does not believe that the proposed rule change will impose
any inappropriate 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 either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the publication of this notice in the Federal
Register or within such other period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) by order approve the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
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 NW., 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, D.C. 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-CSE-95-09 and should be
submitted by December 29, 1995.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-29922 Filed 12-7-95; 8:45 am]
BILLING CODE 8010-01-M
