[Federal Register Volume 60, Number 48 (Monday, March 13, 1995)]
[Notices]
[Pages 13492-13493]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-6086]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35449; File No. SR-CHX-95-5]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Chicago Stock Exchange, Incorporated Relating to the
Authority of the Committee on Floor Procedure
March 7, 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 February
10, 1995, the Chicago Stock Exchange, Incorporated (``CHX'' or
``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 self-regulatory
organization. On March 1, 1995, the Exchange submitted to the
Commission Amendment No. 1 to the proposed rule change.\1\ The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
\1\See letter from David Rusoff, Foley & Lardner, to Jennifer
Choi, SEC, dated February 27, 1995. The original filing incorrectly
references Rule 3 of Article IV of the Exchange Rules as the rule to
be amended. Amendment No. 1 alters the proposed rule change to
reference Rule 3 of Article XII as the correct rule to be amended.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
At present, Rule 3 of Article XII provides the Committee on Floor
Procedure with the authority to summarily fine members and exclude them
from the Exchange premises under certain circumstances. The Exchange
proposes to amend Rule 3 and interpretation .02 thereunder to provide
the Committee on Floor Procedure with the same authority over persons
associated with a member.\2\ Under the current Rule 3, the Committee on
Floor Procedure or an appropriately designated subcommittee has the
authority to summarily fine and exclude from the Exchange a member
whose conduct is deemed to be improper and to recommend investigations
pursuant to Rule 1 of Article XII regarding any conduct on the floor of
the Exchange. Specifically, any member of the Floor Committee or a
member of its appropriately designated subcommittee may summarily fine
any member for conduct classified as Class B\3\ in an amount not to
exceed $100. For conduct classified as Class A offenses,\4\ any member
of the Floor Committee or a member of its appropriately designated
subcommittee with the concurrence of two other floor officials (floor
governors if immediately available) may summarily fine a member in an
amount not to exceed $2,500 and summarily exclude a member from the
Exchange for no longer than the remainder of the trading day.
\2\The Exchange does not specifically define the term
``associated person'' in its Rules. For purposes of Rule 3, Article
XII, the Exchange refers to an associated person as defined in
Section 3(a)(18) of the Securities Exchange Act of 1934.
Conversation with David Rusoff, Foley & Lardner, and Jennifer Choi,
Attorney, SEC, dated February 27, 1995. Section 3(a)(18) defines an
``associated person of a broker or dealer'' as any ``partner,
officer, director, or branch manager of such broker or dealer (or
any person occupying a similar status or performing similar
functions), any person directly or indirectly controlling,
controlled by, or under common control with such broker or dealer,
or any employee of such broker or dealer * * *.''
\3\Class B violations involve minor offenses such as dress code
and smoking violations.
\4\Class A represents more serious violations than Class B and
includes such conduct as fighting, threatening speech, and other
conduct that is detrimental to the interest or welfare of the
Exchange.
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For either class of offenses, a member, who has been adversely
affected by any action taken under Rule 3, except for a summary
exclusion,\5\ by any person or [[Page 13493]] body, other than the full
Floor Procedure Committee, may appeal to the full Floor Procedure
Committee within five days of receiving notice of the action by making
a written request. Upon appeal, the full Floor Procedure Committee may
increase or decrease the amount of a summary fine or the length of an
exclusion from the Exchange. The Floor Procedure Committee, however,
may not fine a member in an amount in excess of $2,500 or exclude a
member from the Exchange in excess of five full business days. The
decision of the Floor Procedure Committee is deemed final with respect
to any action involving no more than a $100 fine.
\5\A member summarily excluded has the right to petition for
reinstatement after a sufficient ``cooling-off'' period has elapsed.
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By written request, a member may appeal a determination of the full
Floor Procedure Committee involving more than a $100 fine to the
Executive Committee. The Executive Committee will review the report of
the action as certified by the Secretary unless it decides to open the
record for additional evidence. The Executive Committee may increase or
decrease the amount of a summary fine or the length of an exclusion
after review. The Executive Committee, however, may not fine a member
in an amount in excess of $2,500 or exclude a member from the Exchange
in excess of five full business days.
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 self-regulatory organization
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 self-regulatory organization
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
At present, CHX Rule 3 of Article XII describes the ability of the
Exchange's Committee on Floor Procedure to summarily fine members and
exclude them from the Exchange premises. The purpose of the proposed
rule change is to give the Committee on Floor Procedure the same
authority over persons associated with a member.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b)(5) of the
Act in that it is designed to prevent fraudulent and manipulative acts
and practices and to perfect the mechanisms of a free and open market.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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, N.W., 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. 552, will be available for inspection and copying at the
Commission's Public Reference Section, 450 Fifth Street, N.W.,
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-CHX-95-5 and should be
submitted by April 3, 1995.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-6086 Filed 3-10-95; 8:45 am]
BILLING CODE 8010-01-M
