[Federal Register Volume 62, Number 187 (Friday, September 26, 1997)]
[Notices]
[Pages 50645-50646]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-25606]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39105; File No. SR-CSE-97-07]
Self-Regulatory Organizations; Order Approving Proposed Rule
Change by the Cincinnati Stock Exchange, Inc. Relating to Minor Rule
Plan Violations
September 22, 1997.
On August 5, 1997, The Cincinnati Stock Exchange, Incorporated
(``CSE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'' or ``SEC'') the proposed rule change
pursuant to Section 19(b)(1)
[[Page 50646]]
of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 \2\
thereunder.\3\ Notice of the proposed rule change, together with the
substance of the proposal, was published in the Federal Register.\4\ No
comment letters were received. This order approves the proposed rule
change, as amended.
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\1\ 15 U.S.C. 78s(b)(1) (1994).
\2\ 17 CFR 240.19b-4 (1997).
\3\ The proposed rule change was originally submitted on June
24, 1997. The CSE subsequently submitted Amendment No. 1 which
altered minor technical language in Item II. Letter from Adam W.
Gurwitz, Vice President Legal and Secretary, CSE, to Karl J. Varner,
Esq., SEC, dated August 4, 1997. This proposed rule change replaces
SR-CSE-97-06, which has been withdrawn. Letter from Adam W. Gurwitz,
Vice President Legal and Secretary, CSE, to Katherine England,
Assistant Director, SEC, dated June 23, 1997.
\4\ Securities Exchange Act Release No. 38922 (August 11, 1997),
62 FR 44024 (August 18, 1997).
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I. Background
Exchange Rule 8.14 provides the Minor Rule Violation Program
(``Program'') as an alternative disciplinary regime to violations of
Exchange Rules that the Exchange determines are of a minor nature. The
Program provides the Exchange with the ability, but not the obligation,
to impose a fine, not to exceed $2500, on any member the Exchange
determines has violated a rule subject to the Program. Section (e) of
Exchange Rule 8.14 requires the Exchange from time to time to prepare a
list of minor rule violations. Adding a particular rule violation to
the Program does not limit the Exchange's ability to treat violations
of those rules through more formal disciplinary measures. The Program
simply provides the Exchange with greater flexibility in addressing
rule violations appropriately.
As part of its ongoing effort to improve its regulatory program,
the Exchange has determined that certain rule violations should be
added to the Program. The Program currently includes the requirements
of Exchange Rules 4.1 and 4.2, concerning books and records, to submit
trade data to the Exchange. The proposed rule change will clarify that
a member also must provide financial and regulatory records in
accordance with Rule 4.2 and Interpretations thereunder as well as
trade-related information. The proposed rule change also will add
Exchange Rule 11.9(c) to the Program. Exchange Rule 11.9(c) requires
Designated Dealers, the Exchange's multiple, competing specialists, to
maintain continuous quotations throughout the trading day.
II. Discussion
The Commission finds that the proposed rule change is consistent
with Section 6(b) of the Act in general, and furthers the objectives of
Section 6(b)(7) in particular because it provides a fair procedure for
the disciplining of members and persons associated with members in that
the proposed rule change will augment the Exchange's ability to police
its market and will increase the Exchange's flexibility in responding
to minor rule violations.\5\ The Commission believes the proposed rule
change will enable the Exchange to address appropriate minor rule
violations promptly and efficiently through the minor rule procedures,
without the need to initiate formal disciplinary proceedings.
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\5\ The Commission has considered the effect of the proposed
rule change on the promotion of efficiency, competition and capital
formation. 15 U.S.C. 78(c).
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Furthermore, the Commission believes that proposed rule change is
consistent with Section 6(b)(5) in that it is designed to promote just
and equitable principles of trade and to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest
because the proposed rule change will help the Exchange ensure
compliance with its quotation requirements and spread parameters, which
will enhance the value of quotations made by the Exchange's multiple,
competing specialists.
It is Therefore Ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change, SR-CSE-97-07, be, and hereby is,
approved.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-25606 Filed 9-25-97; 8:45 am]
BILLING CODE 8010-01-M
