[Federal Register Volume 65, Number 149 (Wednesday, August 2, 2000)]
[Notices]
[Pages 47528-47529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19503]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43065; File No. SR-Amex-00-22]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the American Stock Exchange LLC Relating to the Amendment of 
Article V, Section 1 of the Exchange Constitution and Exchange Rule 345

July 21, 2000.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on April 13, 2000, the American Stock Exchange LLC (``Amex'' 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the 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 from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange proposes to amend Amex Rule 345 and Article V, Section 
1 of the Exchange Constitution: (i) To give the Exchange's Enforcement 
Department the right to appeal a decision of a Disciplinary Panel, and 
(ii) to give the Amex Adjudicatory Council and Amex Board of Governors 
authority to increase the penalty imposed by a Disciplinary Panel.
    The text of the proposed rule change is available at the Amex and 
at the Commission.

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 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

[[Page 47529]]

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

a. Constitution Article V, Section 1(c) and Rule 345(f)

    Under Article V, Section 1(c) of the Exchange Constitution and Rule 
345, any member, member organization, approved person, or employee of a 
member or member organization found guilty of charges by an Exchange 
Disciplinary Panel may appeal the determination and/or penalty imposed 
by the Panel to the Amex Adjudicatory Council (``AAC'').\3\ The 
Exchange's Enforcement Department, however, may not appeal a 
Disciplinary Panel's determination pursuant to these Constitutional and 
rule provisions. The Exchange believes that its staff should also have 
a direct right of appeal in those situations where it believes that the 
Disciplinary Panel has imposed inadequate sanctions or made a 
determination inconsistent with evidence presented.
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    \3\ Additionally, any member of the AAC has the authority to 
request a review of an Exchange Disciplinary Panel decision sua 
sponte.
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    In reviewing a disciplinary decision, the AAC currently may affirm 
the determination and penalty imposed, modify or reverse the 
determination, decrease or eliminate the penalty imposed, impose any 
lesser penalty permitted, or remand the matter to the Disciplinary 
Panel for further consideration. However, the AAC may not increase or 
impose a greater penalty on appeal. The Exchange proposes that the AAC 
be given the authority to increase the penalty imposed by the 
Disciplinary Panel if it deems it appropriate. This authority would 
give the reviewing body the full range of alternatives that it needs to 
deal effectively with appeals. Additionally, this authority is 
necessary to give effect to the Enforcement Department's proposed right 
of appeal.

b. Constitution Article V, Section 1(d) and Rule 345(g)

    Pursuant to Exchange Constitution Article V, Section 1(d) and Rule 
345(g), as the next level of review, any four members of the Board of 
Governors may call a proposed decision of the AAC in a contested 
disciplinary matter for review by the entire Board. In reviewing a 
decision by the AAC, the Board may affirm, modify or reverse the 
decision of the AAC, or remand the matter for further consideration. 
The Exchange proposes to expand the scope of the Board's authority to 
review proposed decisions of the AAC so that the Board may also 
sustain, increase or eliminate any penalty imposed, or impose a lesser 
penalty.\4\
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    \4\ Pursuant to New York Stock Exchange (``NYSE'') Rule 476(f), 
NYSE enforcement personnel have the authority to appeal adverse 
determinations by disciplinary panels and the review boards have the 
authority to increase penalties imposed by disciplinary panels. 
Further, National Association of Securities Dealers, Inc. (``NASD'') 
Rule 9311 provides for similar authority.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \5\ in general and furthers the objectives 
of Sections 6(b)(1),\6\ 6(b)(6),\7\ and 6(b)(7) \8\ in particular in 
that it will enhance the ability of the Exchange to enforce compliance 
by its members and persons associated with its members with the 
provisions of the Act, the rules and regulations thereunder, and the 
rules of the Exchange; it will help ensure that members and persons 
associated with members are appropriately disciplined for violations of 
the Act, the rules and regulations thereunder, and the rules of the 
Exchange; and it will provide a fair procedure for the disciplining of 
members and persons associated with members.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(1).
    \7\ 15 U.S.C. 78f(b)(6).
    \8\ 15 U.S.C. 78f(b)(7).
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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

    Written comments were neither solicited nor received with respect 
to the proposed rule change.

III. 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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed 
change is consistent with the Act. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. 
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. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
Amex. All submissions should refer to the file number SR-Amex-00-22 and 
should be submitted by August 23, 2000.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-19503 Filed 8-1-00; 8:45 am]
BILLING CODE 8010-01-M