[Federal Register Volume 66, Number 55 (Wednesday, March 21, 2001)]
[Rules and Regulations]
[Pages 15791-15792]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-7007]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 200

[Release No. 34-44079]


Delegation of Authority to the Director of the Division of Market 
Regulation

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: The Securities and Exchange Commission is amending its rules 
to delegate authority to the Director of the Division of Market 
Regulation to grant exemptions from the provisions of the Quote Rule 
regarding transactions in listed options and the Trade-Through 
Disclosure Rule (Rules 11Ac1-1 and 11Ac1-7 under the Securities 
Exchange Act of 1934, respectively). This delegation of authority will 
facilitate the timely implementation of the Trade-Through Disclosure 
Rule and amendments to the Quote Rule.

EFFECTIVE DATE: March 21, 2001.

FOR FURTHER INFORMATION CONTACT: John Roeser, Attorney, at (202) 942-
0762, Office of Market Supervision, Division of Market Regulation, 
Securities and Exchange Commission, 450 Fifth Street, NW., Washington, 
DC 20549-1001.

SUPPLEMENTARY INFORMATION: The Securities and Exchange Commission 
(``Commission'') has adopted an amendment to Rule 30-3 of its Rules of 
Organization and Program Management governing Delegations of Authority 
to the Director of the Division of Market Regulation (``Director'').\1\ 
The amendment revises paragraph (a)(28) of Rule 30-3 to conform this 
paragraph to recent amendments to Rule 11Ac1-1 to clarify that the 
Director continues to have authority to grant exemptions from the 
provisions of Rule 11Ac1-1.\2\ In addition, the amendment adds new 
paragraph (a)(71) to Rule 30-3 to authorize the Director to grant 
exemptions from the provisions of Rule 11Ac1-7.\3\
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    \1\ 17 CFR 200.30-3.
    \2\ 17 CFR 240.11Ac1-1.
    \3\ 17 CFR 240.11Ac1-7.
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    Generally, Rule 11Ac1-1 requires exchanges and broker-dealers to 
publish firm quotes. Rule 11Ac1-1(e) provides that the Commission may 
exempt from the provisions of this rule, either unconditionally or on 
specified terms and conditions, any responsible broker or dealer, 
electronic communications network, exchange, or association if the 
Commission determines that such exemption is consistent with the public 
interest, the protection of investors and the removal of impediments to 
and perfection of the mechanism of a national market system.
    Rule 30-3(a)(28) currently authorizes the Director to grant 
exemptions from the provisions of Rule 11Ac1-1, pursuant to paragraph 
(d) of Rule 11Ac1-1. The Commission, however, recently amended Rule 
11Ac1-1 to include transactions in listed options and, as a result, 
former paragraph (d) of Rule 11Ac1-1 was redesignated as paragraph 
(e).\4\ To clarify that Rule 30-3(a)(28) authorizes the Director to 
grant exemptions from Rule 11Ac1-1 including with regard to 
transactions in listed options, the Commission is now revising Rule 30-
3(a)(28) to reference paragraph (e), rather than paragraph (d), of Rule 
11Ac1-1.
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    \4\ See Securities Exchange Act Release No. 43591 (November 17, 
2000), 65 FR 75439 (December 1, 2000).
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    Rule 11Ac1-7 requires a broker to disclose to its customer when the 
customer's order for listed options is executed at a price inferior to 
a better published quote on another market, unless the broker effects 
the transaction on an exchange that participates in an

[[Page 15792]]

approved linkage plan that includes provisions reasonably designed to 
limit customers' orders from being executed at prices inferior to a 
better published price or the customer's order was executed as part of 
a block trade.
    Rule 11Ac1-7(c) provides that the Commission may exempt from the 
provisions of this rule, either unconditionally or on specified terms 
and conditions, any broker or dealer if the Commission determines that 
such exemption is consistent with the public interest, the protection 
of investors, the maintenance of fair and orderly markets, or the 
removal of impediments to and perfection of the mechanism of a national 
market system. New paragraph (a)(71) to Rule 30-3 authorizes the 
Director to grant exemptions under this paragraph (c) of Rule 11Ac1-7.
    The delegation of authority to the Director is intended to conserve 
Commission resources by permitting Division staff to grant exemptions, 
where appropriate and in a timely manner, from the provisions of Rules 
11Ac1-1 and 11Ac1-7. The Commission anticipates that the delegation of 
authority will facilitate the timely implementation of the rules, 
particularly Rule 11Ac1-7. Nevertheless, the staff may submit matters 
to the Commission for consideration as it deems appropriate. The 
Commission does not expect that exemptions from Rules 11Ac1-1 and 
11Ac1-7 will be routinely issued.
    The Commission finds, in accordance with Section 553(b)(3)(A) of 
the Administrative Procedures Act,\5\ that these amendments relate 
solely to agency organization, procedure, or practice, and do not 
relate to a substantive rule. Accordingly, notice, opportunity for 
public comment, and publication of the amendment prior to its effective 
date are unnecessary.
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    \5\ 5 U.S.C. 553(b)(3)(A).
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List of Subjects in 17 CFR Part 200

    Administrative practice and procedure, Authority delegations 
(Government agencies), Organization and functions (Government 
agencies).

Text of Amendment

    In accordance with the preamble, the Commission hereby amends Title 
17, Chapter II of the Code of Federal Regulations as follows:

PART 200--ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION AND 
REQUESTS

Subpart A--Organization and Program Management

    1. The authority citation for Part 200, subpart A, continues to 
read, in part, as follows:

    Authority: 15 U.S.C. 77s, 78d-1, 78d-2, 78w, 78ll(d), 78mm, 79t, 
77sss, 80a-37, 80b-11, unless otherwise noted.
* * * * *

    2. Section 200.30-3 is amended in paragraph (a)(28) by revising the 
phrase ``pursuant to paragraph (d)'' to read ``pursuant to paragraph 
(e)'' and by adding paragraph (a)(71) to read as follows:


Sec. 200.30-3  Delegation of authority to Director of Division of 
Market Regulation.

* * * * *
    (a) * * *
    (71) Pursuant to paragraph (c) of Rule 11Ac1-7 (17 CFR 240.11Ac1-
7), to grant exemptions, conditionally or unconditionally, from any 
provision or provisions of Rule 11Ac1-7.
* * * * *

    By the Commission.

    Dated: March 15, 2001.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-7007 Filed 3-20-01; 8:45 am]
BILLING CODE 8010-01-P