[Federal Register Volume 60, Number 121 (Friday, June 23, 1995)]
[Notices]
[Pages 32721-32722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-15369]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35852; File No. SR-CHX-95-06]
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Order Granting Approval to Proposed Rule Change To Add Interpretation
and Policies .01, .02, and .03 Under Rule 3 of Article V of the
Exchange's Rules and To Add a New Clerk's Fee
June 16, 1995.
On March 1, 1995 the Chicago Stock Exchange, Inc. (``CHX'' or
``Exchange'') submitted to the Securities and Exchange Commission
(``SEC'' or ``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 add interpretation and
policies .01, .02 and .03 under Rule 3 of Article V of the Exchange's
Rules and to add a new clerk's fee.
\1\ 15 U.S.C. 78s(b)(1) (1988).
\2\ 17 CFR 240.19b-4 (1994).
---------------------------------------------------------------------------
The proposed rule change was published for comment in Securities
Exchange Act Release No. 35667 (May 3, 1995), 60 FR 24947 (May 10,
1995). No comments were received on the proposal.
First, the proposed rule change adopts interpretations under which
all Floor employees will be required to submit a Uniform Application
for Securities Industry Registration or Transfer (``Form U-4'') in
order to become registered.\3\ The Form U-4 requires detailed
disclosure of background information, including information regarding
employment and disciplinary history, and is the standard industry form
submitted to Self Regulatory Organizations (``SROs'') for individuals
required to be registered (including securities salespersons and
traders). The Form U-4 also requires this information to be updated
whenever the information submitted becomes inaccurate or incomplete.
\3\ Currently, only Floor employees that accept orders from the
public and applicants for membership are required to submit a Form
U-4 to the Exchange.
---------------------------------------------------------------------------
Second, the Exchange also is imposing a requirement that a member
(or member organization) promptly give written notice of termination of
a Floor employee to the Exchange on the Uniform Termination Notice for
Securities Industry Registration (Form U-5) \4\ and concurrently
provide a copy of such notice to the person who has been terminated.
\4\ Form U-5 contains information relating to the circumstances
surrounding the termination of an applicant's prior employment, and
must be completed and submitted to the NASD, and other SROs
requiring such a submission under their respective rules, whenever a
registered employee is terminated.
---------------------------------------------------------------------------
Third, the proposal will require all Floor employees of members and
member organizations and all Exchange members to be fingerprinted and
to submit such fingerprints to the Exchange for identification,
background checking, and appropriate processing.\5\
\5\ Fingerprinting currently is required for each partner,
director, officer or employee of broker-dealers pursuant to Rule
17f-2 under the Act, with certain exceptions. Floor clerks are not
required by Rule 17f-2 to submit fingerprints because they do not
physically handle monies or securities. See 17 CFR 240.17f-2 (1994).
---------------------------------------------------------------------------
Finally, the proposal will impose an initial registration fee on
clerks of $50.
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange, and, in
particular, with the requirements of Sections 6(b).\6\ In particular,
the Commission believes the proposal is consistent with the Section
6(b)(5) requirements that the rules of an exchange be designed to
promote just and equitable principles of trade, to prevent fraudulent
and manipulative acts, and, in general, to protect investors and the
public. Further, the Commission believes that the proposal is
consistent with Section 6(c)(2) of the Act \7\ in that it should assist
the Exchange in fulfilling its regulatory responsibilities regarding
the granting of membership by identifying those individuals who are
subject to a statutory disqualification under Section 3(a)(39) of the
Act.\8\ In [[Page 32722]] addition, it should assist the Exchange in
providing detailed information to the Commission under certain
circumstances as required in Rule 19h-1.\9\ Moreover, the Commission
believes that the additional fingerprinting requirements being imposed
by the Exchange will further enhance security measures implemented by
the CHX and is consistent with Section 17(f)(2) of the Act.\10\
Finally, the Commission finds that the clerk's fee is consistent with
Section 6(b)(4) of the Act, which requires exchange rules to provide
for the equitable allocation of reasonable dues, fees, and other
charges among its members and issuers and other persons using its
facilities.\11\
\6\ 15 U.S.C. 78f(b) (1988).
\7\ See 15 U.S.C. 78f(c) (1988).
\8\ The Exchange is required to make a determination in each
case where an individual who is subject to a statutory
disqualification (e.g., is suspended or barred by an SRO, or has
been convicted of any felony or certain enumerated misdemeanors)
seeks admission to or continuance in membership, participation in,
or association with a member or member organization. See 15 U.S.C.
78c(a)(39) (1988).
\9\ Specifically, the Rule requires SROs to notify the
Commission whenever it determines to admit or continue in membership
or participation or association with a member or member
organization, any person who is subject to a statutory
disqualification. See 17 CFR 240.19h-1 (1994).
\10\ See supra note 5.
\11\ 15 U.S.C. 78f(b)(4) (1988).
---------------------------------------------------------------------------
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\12\ that the proposed rule change (SR-CHX-95-06) is approved.
\12\ 15 U.S.C. 78s(b)(2) (1988).
---------------------------------------------------------------------------
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
\13\ 17 CFR 200.30-3(a)(12) (1994).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-15369 Filed 6-22-95; 8:45 am]
BILLING CODE 8010-01-M
