[Federal Register Volume 59, Number 193 (Thursday, October 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-24793]


[[Page Unknown]]

[Federal Register: October 6, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34761; File No. SR-BSE-94-07]

 

Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Order 
Granting Approval to Proposed Rule Change Relating to the Reporting of 
Certain Financial and Other Information by Broker-Dealers

September 30, 1994.
    On May 2, 1994, the Boston Stock Exchange, Inc. (``BSE'' 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 rules change adopt new section 2(n) to 
chapter XXII of the Rules of the Board of Governors of the Exchange. On 
May 12, 1994, the Exchange submitted to the Commission Amendment No. 1 
to the proposed rule change.\3\ On August 16, 1994, the Exchange 
submitted Amendment No. 2 to the proposed rule change.\4\
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    \1\15 U.S.C. 78s(b)(1) (1988).
    \2\17 CFR 240.19b-4 (1993).
    \3\See letter from Karen Aluise, Assistant Vice President, BSE, 
to Sandy Sciole, Special Counsel, SEC, dated May 5, 1994. Amendment 
No. 1 corrected a technical mistake in the text of the rule 
submitted with the original rule filing.
    \4\See letter from Karen Aluise, Assistant Vice President, BSE, 
to Amy Bilbija, SEC, dated August 10, 1994. Amendment No. 2 
contained a revised Exhibit 2, which reformulated the proposed rule 
change.
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    The proposed rule change was published for comment in Securities 
Exchange Act Release No. 34556 (August 19, 1994), 59 FR 44201 (August 
26, 1994). No comments were received on the proposal.
    Among other matters, the rule being adopted requires each broker-
dealer for which the Exchange is the designated examining authority 
(``DEA'') to provide to the Exchange on a quarterly basis (or more 
often as deemed appropriate by the Exchange):
    (a) A report of all assets and liabilities attributable to the 
broker-dealer or held by another entity for the account of the broker-
dealer;
    (b) A description of any outstanding litigation or contracts that 
may have a material financial impact on the broker-dealer; and
    (c) A pro-forma consolidated capital computation of assets and 
liabilities of any subsidiary or affiliate for which the broker-dealer 
guarantees, endorses or assumes directly or indirectly the obligations 
or liabilities.
    In addition, the rule requires each such broker-dealer immediately 
to notify the Exchange of any financial matters that may have a 
material impact on the firm's capital and or its equity requirements.
    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 including the 
requirements of section 6(b) of the Act.\5\ 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.
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    \5\15 U.S.C. 78f(b) (1988).
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    The Commission believes that this rule will protect investors and 
the public interest by providing the BSE with an early warning of 
potential financial difficulties at member firms for which it is the 
DEA and by otherwise enhancing the BSE's ability to monitor the 
continued financial well being of such firms. Moreover, the proposed 
rule will help the BSE to ensure its members' compliance with the 
requirements of the Commission's net capital rule, Rule 15c3-1 under 
the Act.\6\
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    \6\17 CFR 240.15c3-1 (1993).
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    It is therefore ordered, pursuant to section 19(b)(2) of the Act, 
\7\ that the proposed rule change (SR-BSE-94-07) is approved.

    \7\15 U.S.C. 78s(b) (2) (1988).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority. \8\
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    \8\17 CFR 200.30-3(a) (12) (1993).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-24793 Filed 10-5-94; 8:45 am]
BILLING CODE 8010-01-M