[Federal Register Volume 61, Number 203 (Friday, October 18, 1996)]
[Notices]
[Pages 54479-54480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-26714]



[[Page 54479]]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37799; File No. SR-PSE-96-30]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Pacific Stock Exchange Incorporated Relating to the Use 
of Member Badges on, and the Admission of Visitors to, the Equity 
Floors of the Exchange

October 9, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') and Rule 19b-4 thereunder, notice is hereby given that on 
August 22, 1996, the Pacific Stock Exchange Incorporated (``PSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') the proposed rule change as described in 
Items I, II and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Pacific Stock Exchange Incorporated (``PSE'' or ``Exchange'') 
is proposing to amend its Equity Floor Procedure Advice (``EFPA'') 1-C 
relating to the use of Member badges on, and the admission of visitors 
to, the Equity Floors of the Exchange. The text of the proposed rule 
change is stated below, new text is italicized, deletions are in 
brackets:
* * * * *
EQUITY FLOOR PROCEDURE ADVICES
* * * * *
1-C
para. 7610  Badges and Visitors on the [Equity] Equities Trading Floors

(i) Admission of Members

    The security of individuals and proprietary trading information on 
the Equities Trading Floors requires the following provisions be 
adopted with respect to admission on the Trading Floor:
    (a) [1] Admission to the Equities Trading Floors shall be by badge 
only.
    (b) [2] Members working on the Equities Trading Floors who seek 
admission to a Floor without a badge must identify themselves at the 
reception desk and obtain a temporary badge.
    (c) [3] Exchange employees working on the Trading Floor who seek 
admission to the Floor without a badge must be identified by the 
appropriate Equities Floor Manager, and issued a temporary badge.
    (d) [4] Member Firm employees working on the Trading Floor seeking 
admission to the Floor without a badge must be identified by a Member 
with a badge, and issued a temporary badge.
    (e) [5] Repeated failure of Members or Member Firm personnel to 
have a permanent badge on admission to the Trading Floor may subject 
the Member or Member Firm to the following fines: [a fine.]

1st Offense [$10.00] $25.00
2nd Offense [$25.00] $50.00
3rd Offense [$50.00] $100.00

(ii) Badge Transfers

    (a) A Member may transfer his or her membership privileges to 
another person of the same Member Firm for one or more days, provided 
that the Member must first obtain the approval of the Exchange. A 
Member who allows another person to use that Member's badge for one 
full day or longer and who fails to obtain Exchange approval for such 
transfer will be subject to the following fines:

1st Offense $100.00
2nd Offense $250.00
3rd Offense $500.00

(iii) Admission of Visitors

    (a) [6] Visitors must be the invited guests of Exchange Members or 
Exchange Officials. Visitors must be signed in at the reception desk by 
the inviting Member or staff personnel. Visitors will be issued a 
temporary badge to wear at all times while on the Floor. Visitors shall 
be accompanied at all times on the Floor.
    (b) [7] Allied Members shall be considered visitors for the 
purposes of this Advice.
    (c) [8] The Floor Trading Committee Members of each respective 
trading floor may restrict the access of any visitor to the Floor when 
the Committee Members deem that the visitor's presence interferes with 
orderly Floor procedures.
    A Member who is responsible for a violation of these provisions on 
the admission of visitors will be subject to the following fines:

1st Offense $25.00
2nd Offense $50.00
3rd Offense $100.00

    Violations of this Advice 1-C shall be cumulative and the number of 
offenses for a violation of Equity Floor Procedure Advice 1-C shall be 
calculated on a twelve-month rotating basis. Therefore, a violation in 
January would be removed from the calculation in January of the 
following year.
* * * * *
para.6133  Minor Rule Plan
    Rule 10.13 (a)-(h)--No change.

(i) Minor Rule Plan: Equity Floor Decorum and Minor Trading Rule 
Violations
    (1)-(2)--No change.
    (3) Admission of Members to [Use of Badges on] the Equity Floor. 
(EFPA 1-C(i))
    (4)-(9)--No change.
    (10) Badge Transfers. (EFPA 1-C(ii))
    (11) Admission of Visitors to the Equity Floor (EFPA 1-C(iii))
* * * * *
MINOR RULE PLAN, RECOMMENDED FINE SCHEDULE
* * * * *
    Rule 10.13(i)
    Equity Floor Decorum and Minor Trading Rule Violations \1\
---------------------------------------------------------------------------

    \1\ Fines for multiple violations of Equity Floor Decorum and 
Minor Trading Rules are calculated on a running two-year basis, 
except that violations denoted with an asterisk are calculated on a 
running one-year basis.

[[Page 54480]]



------------------------------------------------------------------------
                                    1st viol.    2nd viol.    3rd viol. 
------------------------------------------------------------------------
(1)-(2)--No change.                                                     
(3) Admission of Members to [Use                                        
 of Badges on] the Equity Floor                                         
 (EFPA 1-C(i))...................        [$10]                          
                                           $25        [$25]             
                                                        $50        [$50]
                                                                    $100
(4)-(9)--No change.                                                     
(10) Badge Transfers (EFPA 1-                                           
 C(ii))..........................         $100         $250         $500
(11) Admission of Visitors to the                                       
 Equity Floor (EFPA 1-C(iii))....        [$10]                          
                                           $25        [$25]             
                                                        $50        [$50]
                                                                    $100
------------------------------------------------------------------------

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) and (B) below, of the 
most significant aspects of such statements.

A. Purpose

    EFPA 1-C currently sets forth the rules and procedures on the 
admission to the trading floor and the use of badges by Members. 
Violations of these rules may currently result in recommended fines of 
$10, $25 and $50 for first-, second- and third-time violations under 
the Exchange's Minor Rule Plan (``MRP'').\2\
---------------------------------------------------------------------------

    \2\ See PSE Rule 10.13 (Procedures under the MRP); see also File 
No. SR-PSE-96-26 (pending proposal to grant Exchange staff the 
authority to make findings of violations and to impose monetary 
fines under the MRP).
---------------------------------------------------------------------------

    The Exchange is proposing to modify EFPA 1-C and, correspondingly, 
the MRP in two respects. First, the Exchange is proposing to add a 
provision, entitled ``Badge Transfers,'' to EFPA 1-C, stating that a 
Member may transfer his or her membership privileges to another person 
of the same Member Firm for one or more days, provided that the Member 
must first obtain the approval of the Exchange.\3\ The provision 
further states that a Member who allows another person to use that 
Member's badge for one full day or longer and who fails to obtain 
Exchange approval for such transfer will be subject to the following 
fines: $100 for first offense, $250 for a second offense and $500 for a 
third offense.\4\
---------------------------------------------------------------------------

    \3\ See Exchange Act Release No. 37373 (June 26, 1996), 61 FR 
34918 (July 3, 1996) (approving proposal to establish a new fee of 
$50 for one-day transfers of membership, and noting that the fee for 
temporary intrafirm transfers of membership (i.e., transfers for a 
consecutive period lasting from two days to less than 30 days) is 
$100.
    \4\ Violations of EFPA 1-C are cumulative and the number of 
offenses for a violation of that Advice are calculated on a twelve-
month rotating basis. Therefore, a violation in January would be 
removed from the calculation in January of the following year. See 
EFPA 1-C.
---------------------------------------------------------------------------

    Second, the Exchange is proposing to raise the recommended fines 
for violations of the provisions in EFPA 1-C relating to the Admission 
of Members and Admission of Visitors.\5\ Accordingly, a Member (or 
Member Firm personnel) who repeatedly fails to have a permanent badge 
on admission to the Trading Floor will be subject to fines of $25 
(first offense), $50 (second offense), and $100 (third offense).\6\ In 
addition, a Member who is responsible for a violation of the provisions 
on the Admission of Visitors \7\ will also be subject to fines of $25 
(first offense), $50 (second offense), and $100 (third offense), under 
the proposed rule change.
---------------------------------------------------------------------------

    \5\ These fines are currently $10, $25 and $50 for first, second 
and third violations, respectively.
    \6\ See Note 3, supra.
    \7\ These are specified in current subsections (6)-(8) of EFPA 
1-C.
---------------------------------------------------------------------------

B. Statutory Basis

    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act, in general, and Section 6(b)(6), in particular, in 
that it is designed to assure that Exchange members and persons 
associated with such members are appropriately disciplined for 
violations of the Rules of the Exchange.

III. Self-Regulatory Organization's Statement on Burden on 
Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

IV. Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants, or Others

    Written comments on the proposed rule change were neither solicited 
nor received.

V. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer 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 such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

VI. 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 in the 
Commission's Public Reference Room, 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 PSE. All submissions should 
refer to File No. SR-PSE-96-30 and should be submitted by November 8, 
1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-26714 Filed 10-17-96; 8:45 am]
BILLING CODE 8010-01-M