[Federal Register Volume 63, Number 20 (Friday, January 30, 1998)]
[Notices]
[Pages 4679-4680]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2290]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39569; File No. SR-CHX-97-35]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Chicago Stock Exchange,
Incorporated, Relating to the Failure To Pay Fines for Minor Rule
Violations
January 22, 1998.
Pursuant to Section 19(B)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on December
11, 1997, the Chicago Stock Exchange, Incorporated (``CHX'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') the proposed rule change, and on January
14, 1998,\1\ filed Amendment No. 1 to such proposed rule change, as
described in Items I, II, and III below, which Items have been prepared
by the Exchange. The Commission is publishing this notice to solicit
comments on the proposed rule change for interested persons.
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\1\ As submitted on December 11, 1997, this filing did not
adequately describe the terms of the proposed rule change. The
Commission requested that the Exchange amend this filing. This
renders the filing effective on January 14, 1998.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to add an interpretation to Article XII, Rule
9 of the Rules to clarify that failure to pay a fine imposed under the
Minor Rule Violation Plan (``Plan'') shall be deemed
[[Page 4680]]
to be a waiver by the registered person of the right to a disciplinary
proceeding or any right to review or appeal such fine. The text of the
proposed rule change is below. Proposed new language is in italics.
Article XII, Rule 9
Interpretations and Policies
.01 With respect to subsection (d), a failure to pay a fine
imposed pursuant to this Rule by the time it is due, without timely
contesting the action upon which such fine was based pursuant to
subsection (e), shall be deemed a waiver by the person against whom the
fine is imposed of such person's right to a disciplinary proceeding
under Article XII and any right to review or appeal.
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 Exchange 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 IV below. The Exchange 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 purpose of the proposed rule change is to clarify a provision
of the Exchange's Plan relating to failure to pay or contest a fine
imposed under the Plan. The Exchange adopted its Plan, Article XII,
Rule 9 on May 30, 1996. The Exchange may impose a fine, not to exceed
$2,500, for any violation of a rule under the Plan.\2\ The Plan
establishes procedures for imposing fines if the Exchange determines
that a member, member organization, associated person, or registered or
non-registered employee of a member or member organization
(collectively ``Member'') has violated a rule under the Plan.\3\ A
Member is provided notice of a violation under the Plan and is provided
not less than 15 days to make payment or to contest the Exchange's
determination of violation.\4\ A Member, upon payment of an assessed
fine, waives the right to contest the Exchange's determination.\5\ A
Member, however, has the right to contest the Exchange's determination
before payment is due, at which point the matter becomes a
``Disciplinary Proceeding.'' \6\
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\2\ See CHX Article XII, Rule 9(h) for a list of the Exchange
rules and policies that are subject to the Plan.
\3\ CHX Article XII Rule 9(b).
\4\ CHX Article XII Rule 9(c).
\5\ CHX Article XII Rule 9(d).
\6\ CHX Article XII Rule 9(e).
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The Exchange proposes to add an interpretation that would make it
clear that failure to pay an assessed fine for a Plan violation when it
becomes due and payable does not thereby extend the time allowed for a
member to contest the determination. As with the failure to pay any
debt, the Exchange may proceed with disciplinary action (including, but
not limited to, suspension) pursuant to Article XIV, Rule 13 against
any Member that fails to pay a fine, when due, imposed under the Plan.
2. Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b)(5) of the Act in that it is designed to promote just
and equitable principles of trade, to remove impediments and to perfect
the mechanism of a free and open market and a national market system,
and , in general, to protect investors and the public interest.
B. 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.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change constitutes a stated policy,
practice or interpretation with respect to the meaning, administration,
or enforcement of an existing rule of the Exchange pursuant to Section
19(b)(3)(A) of the Act \7\ and subparagraph (e) of Rule 19b-4
thereunder. At any time within 60 days of the filing of such rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
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\7\ 15 U.S.C. 78s(b)(3)(A).
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IV. 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 at the
Commission's Public Reference Room. Copies of the filing will also be
available for inspection and copying at the principal office of the
Exchange. All submissions should refer to File No. SR-CHX-97-35 and
should be submitted by February 20, 1998.
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).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-2290 Filed 1-29-98; 8:45 am]
BILLING CODE 8010-01-M