[Federal Register Volume 63, Number 102 (Thursday, May 28, 1998)]
[Notices]
[Pages 29275-29276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-14115]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40021; File No. SR-CBOE-98-12]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change by the Chicago
Board Options Exchange, Incorporated Relating to Exchange Mandated
Education Training
May 21, 1998.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934,\1\ notice is hereby given that on April 20, 1998, the Chicago
Board Options Exchange, Incorporated (``CBOE'' 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 CBOE. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons and to grant accelerated approval on the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The CBOE proposes to add a provision of Exchange Rule 6.20
Admission to and Conduct on the Trading Floor, Member Education, to
require that Exchange members and persons associated with Exchange
members attend mandatory continuing education classes as directed by
the Exchange. Proposed new language is in italics.
Chicago Board Options Exchange, Inc. Rules
* * * * *
CHAPTER VI
Doing Business on the Exchange Floor
Section B: Member Activities on the Floor
Admission to and Conduct on the Trading Floor: Member Education
Rule 6.20(a)--(c) No change.
(d) Education Classes. Members and persons associated with members
are required to attend such educational classes as the Exchange may
require from time to time. Failure to attend Exchange mandated
continuing educational classes may subject members and persons
associated with members to sanctions pursuant to the Exchange's Minor
Rule Violation provided in Exchange Rule 17.50. Any action taken by
Floor Officials thereunder shall not preclude further disciplinary
action by the Business Conduct Committee under Chapter XVII of the
Rules, except as otherwise provided in Rule 17.50.
. . . Interpretations and Policies:
.01-.09 No change.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, CBOE included statements
concerning the purpose of, and statutory 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 CBOE 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
The Exchange is proposing to add a provision to Exchange Rule 6.20,
Admission to and Conduct on the Trading Floor; Member Education, to
require that Exchange members and persons associated with Exchange
members attend mandatory continuing education classes as directed by
the Exchange. The Exchange believes it is necessary from time to time
to require mandatory participation in certain educational training
classes by its members and persons associated with its members for a
variety of reasons, including to promote professional behavior and
decorum on the trading floor, or to explain the operation of new
technology. For example, the Exchange intends to implement a harassment
awareness training and ethics program for its members and persons
associated with its members who are present on the trading floor.
Without this rule change, the Exchange would not have the ability
to mandate attendance. The Exchange is also proposing to amend its
Minor Rule Violation fine schedule pursuant to Exchange Rule
17.50(g)(6). Floor Officials are allowed, pursuant to Rule 17.50(g)(6),
to fine members and associated persons for violations of trading
conduct and decorum policies. For failure to attend an Exchange
mandated continuing educational class, the Exchange proposes a fine of
$500 for a first offense, $750 for a second offense
[[Page 29276]]
and $1,000 for subsequent offenses. The Exchange believes the amount of
the fines will be sufficient to ensure attendance. However, in the
event members refuse to attend even after being assessed a fine, as
with all Minor Rule violations, the Exchange has the discretion to
refer violations to the Business Conduct Committee pursuant to Chapter
XVII of the Exchange's Rules.
2. Statutory Basis
The proposed rule change will give the Exchange the ability to
provide for a more professional and informed membership and is
therefore consistent with and furthers the objectives of Section
6(b)(5) of the Act \2\ in that it is designed to promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and
to protect investors and the public interest.
---------------------------------------------------------------------------
\2\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
CBOE does not believe that the proposed rule change will impose any
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 solicited or received with respect to the
proposed rule change.
III. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. 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 in the
Commission's Public Reference Room. Copies of such filing will also be
available for inspection and copying at the principal office of CBOE.
All submissions should refer to the file number (SR-CBOE-98-12) and
should be submitted by June 18, 1998.
IV. Commission's Findings and Order Granting Accelerated Approval
of Proposed Rule Change
The Commission finds that the CBOE's proposal is consistent with
the requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange. Specifically, the
Commission finds that, consistent with Section 6(b)(5) of the Act,\3\
requiring members and those associated with members to attend
continuing education classes on such topics as professional conduct and
the operation of new technology will both promote just and equitable
principles of trade and benefit investors. Moreover, the Commission
finds that mandating continuing education training for members and
persons associated with members is consistent with the provisions of
Section 6(c)(3)(B) of the Act, which makes it the responsibility of an
exchange to prescribe standards of training, experience, and competence
for persons associated with self-regulatory organization members.
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78f(b)(5) requires, among other things, that the
rules of an exchange be designed to promote just and equitable
principles of trade and, in general, to protect investors and the
public interest.
---------------------------------------------------------------------------
The Commission therefor finds good cause for approving the proposed
rule change prior to the thirtieth day after date of publication of
notice of filing thereof in the Federal Register.\4\
---------------------------------------------------------------------------
\4\ In approving this rule, the Commission notes that it has
also considered the proposed rule's impact on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
It is Therefore Ordered, pursuant to Section 19(b)(2) of the
Act,\5\ that the proposed rule change (SR-CBOE-98-12) be, and hereby
is, approved.
\5\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\6\
---------------------------------------------------------------------------
\6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
[FR Doc. 98-14115 Filed 5-27-98; 8:45 am]
BILLING CODE 8010-01-M
