[Federal Register Volume 65, Number 164 (Wednesday, August 23, 2000)]
[Notices]
[Pages 51395-51396]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-21439]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43153; File No. SR-PCX-00-22]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 by the 
Pacific Exchange, Inc. Relating to Continuing Education Requirements

August 14, 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 August 1, 2000, the Pacific Exchange, Inc. (``PCX'' 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 Exchange. The PCX filed 
the proposal pursuant to section 19(b)(3)(A) of the Act,\3\ and Rule 
19b-4(f)(6) thereunder,\4\ which renders the proposal effective upon 
filing with the Commission.\5\ On August 14, 2000, the Exchange amended 
the proposal.\6\ The Commission is publishing this notice to solicit 
comments on the proposed rule change, as amended, from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ The PCX provided written notice to the Commission on July 
25, 2000 of its intent to file this proposal. See Rule 19b-
4(f)(6)(iii), 17 CFR 240.19b-4(f)(6)(ii).
    \6\ See August 14, 2000 letter from Cindy L. Sink, Senior 
Attorney, PCX to Joseph P. Morra, Special Counsel, Division of 
Market Regulation, SEC, and related attachments (``Amendment No. 
1''). In Amendment No. 1, the PCX requested waiver of the 30-day 
operative period, and made minor, technical changes to the original 
proposal. The Commission considers the proposal to have been filed 
as of August 14, 2000, the date the Commission received Amendment 
No. 1.
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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 its Rules pertaining to continuing 
education requirements for registered persons as recommended by the 
Securities Industry Association/Regulatory Council on Continuing 
Education. The text of the proposed rule is available at the PCX 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 PCX included statements 
concerning the purpose of and basis for its proposal and discussed any 
comments it received regarding the proposal. 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 Exchange proposes to modify PCX Rule 9.27(c) pertaining to 
continuing education requirements of registered persons to conform to 
recommendations made by the Securities Industry/Regulatory Council on 
Continuing Education (and rule changes adopted by other SROs).\7\
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    \7\ PCX's proposal was modeled in large part after CBOE Rule 
9.3A. The proposed amendments on continuing education requirements 
have been uniformly adopted by other SROs. See Securities Exchange 
Act Release No. 39712 (March 3, 1998), 63 FR 11939 (March 11, 1998) 
(SR-CBOE-97-68, SR-MSRB-98-02, SR-NASD-98-03, and SR-NYSE-97-33). 
See also Securities Exchange Act Release No. 39711 (March 3, 1998), 
63 FR 12118 (March 12, 1998) (SR-AMEX-98-08) and Securities Exchange 
Act Release No. 39802 (March 25, 1998), 63 FR 15474 (March 31, 1998) 
(SR-Phlx-98-13). See also Securities Exchange Act Release No. 42404 
(February 17, 2000), 65 FR 8220 (February 17, 2000) (SR-CHX-99-32).
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    Currently, PCX Rule 9.27(c) requires all registered persons to 
complete the Regulatory Element training on three occasions: their 
second, fifth and tenth registration anniversaries (and also when they 
are the subject of significant disciplinary action). Once persons are 
registered for more than ten years, they are graduated from the 
Regulatory Element program.
    The proposed rule change would require participation in the 
Regulatory Element throughout a registered person's career, 
specifically, on the second registration anniversary and every three 
years thereafter, with no graduation from the program. However, the 
proposed Rule will allow a one-time exemption for persons who have been 
registered for more than ten years as of the effective date of the 
proposed Rule. The proposed rule change would also require that persons 
registered in a supervisory capacity will have to have been registered 
in a supervisory capacity for more than ten years as of the effective 
date of the proposed Rule to be covered by this one-time exemption. 
Lastly, the proposed rule change would require members to focus on 
supervisory training needs and address such needs in the Firm Element 
training plan.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
provisions of section 6 of the Act \8\ and the rules and regulations 
thereunder applicable to a national securities exchange. Specifically, 
the Exchange believes that the proposed rule change is consistent with 
section 6(b)(5) of the Act,\9\ in that it is designed to perfect the 
mechanism of a national market system, and to protect investors and the 
public interest. The Exchange also believes the proposed rule change 
furthers the objectives of sections 6(c)(3)(A) and (B) of the Act.\10\ 
These provisions prescribe appropriate standards of training, 
experience and competence for broker-dealers and their associated 
persons.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ 15 U.S.C. 78f(c)(3)(A) and (B).
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    The Exchange further believes that the proposed rule change is 
consistent with the purposes underlying section 15(b)(7) of the 
Act,\11\ which generally prohibits a registered person from effecting 
any transaction in, or inducing the purchase or sale of, any security 
unless such registered person meets the standards of training, 
competence and other qualifications as the Commission finds necessary 
or appropriate in the public interest and for the protection of 
investors.
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    \11\ 15 U.S.C. 78o(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.

[[Page 51396]]

C. 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.

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

    Because the foregoing proposed rule change does not:
    (i) significantly affect the protection of investors or the public 
interest;
    (ii) impose any significant burden on competition; and
    (iii) become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to section 19(b)(3)(A) of the Act \12\ and 
Rule 19b-4(f)(6) thereunder.\13\ At any time within 60 days of the 
filing of the proposed 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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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
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    The Exchange has asked the Commission to waive the 30-day operative 
period. The Commission believes it is consistent with the protection of 
investors and the public interest and therefore finds good cause to 
allow the proposal to become operative today because the proposal 
conforms PCX's continuing education requirements for registered persons 
to those at other exchanges, and there is no benefit to investors and 
other market participants in requiring a 30-day operative delay. For 
these reasons, the Commission hereby agrees to waive the 30-day 
operative period, allowing the proposal to be both effective and 
operative as of the date the Exchange filed the proposal with the 
Commission.\14\
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    \14\ The Commission considers the proposal to have been filed as 
of August 14, 2000, the date the Exchange filed Amendment No. 1.
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal is 
consistent with the Act. Persons making written submissions should file 
six copies thereof the Secretary, Securities and Exchange Commission, 
450 Fifth Street, N.W., Washington, D.C. 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 PCX. All 
submissions should refer to file number SR-PCX-00-22 and should be 
submitted by September 13, 2000.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-21439 Filed 8-22-00; 8:45 am]
BILLING CODE 8010-01-M