[Federal Register Volume 66, Number 161 (Monday, August 20, 2001)]
[Rules and Regulations]
[Pages 43720-43721]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-20734]



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Part IV





Securities and Exchange Commission





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17 CFR Part 200



Delegation of Authority to the Director of the Division of Market 
Regulation; Final Rule

17 CFR Parts 202, 240, and 249



Registration of National Securities Exchanges Pursuant to Section 6(g) 
of the Securities Exchange Act of 1934 and Proposed Rule Changes of 
Certain National Securities Exchanges and Limited Purpose National 
Securities Associations; Final Rule

  Federal Register / Vol. 66, No. 161 / Monday, August 20, 2001 / Rules 
and Regulations  

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 200

[Release No. 34-44691]


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 (``Commission'') is 
amending its rules to delegate authority to the Director of the 
Division of Market Regulation (``Director'') to publish notices of 
proposed rule changes filed pursuant to section 19(b)(7) of the 
Securities Exchange Act of 1934 (``Exchange Act'') relating to security 
futures products and to abrogate such proposed rule changes and require 
that they be refiled in accordance with section 19(b)(1) of the 
Exchange Act. This delegation of authority will facilitate the timely 
implementation of Rule 19b-7 and Form 19b-7 under the Exchange Act.

EFFECTIVE DATE: August 20, 2001.

FOR FURTHER INFORMATION CONTACT: Cyndi Nguyen, Attorney, at (202) 942-
4163, Office of Market Supervision, Division of Market Regulation, 
Securities and Exchange Commission, 450 Fifth Street, NW., Washington, 
DC 20549-1001.

SUPPLEMENTARY INFORMATION:
    The Commission is adopting an amendment to Rule 30-3 of its Rules 
of Organization and Program Management governing Delegations of 
Authority to the Director.\1\ The Commission is adding paragraph 
(a)(75) to Rule 30-3 \2\ to authorize the Director to publish notices 
of proposed rule changes filed by self-regulatory organizations 
relating to security futures products pursuant to section 19(b)(7)(A) 
of the Exchange Act.\3\ In addition, the Commission is adding new 
paragraph (a)(76) to Rule 30-3 \4\ to authorize the Director to 
abrogate such proposed rule changes pursuant to section 19(b)(7)(C) of 
the Exchange Act \5\ and require that they be refiled in accordance 
with section 19(b)(1) of the Exchange Act.\6\
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    \1\ 17 CFR 200.30-3.
    \2\ 17 CFR 200.30-3(a)(75).
    \3\ 15 U.S.C. 78s(b)(7)(A).
    \4\ 17 CFR 200.30-3(a)(76).
    \5\ 15 U.S.C. 78s(b)(7)(C).
    \6\ 15 U.S.C. 78s(b)(1).
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    To implement the Commodity Futures Modernization Act of 2000 
(``CFMA''), the Commission today is adopting, in a separate release,\7\ 
Rule 19b-7,\8\ Form 19b-7,\9\ and conforming amendments to Rule 19b-4 
\10\ and Form 19b-4 \11\ to accommodate certain proposed rule changes 
submitted by national securities exchanges registered pursuant to 
section 6(g) of the Exchange Act (``Security Futures Product 
Exchanges'') \12\ and national securities associations registered 
pursuant to section 15A(k) of the Exchange Act (``Limited Purpose 
National Securities Associations'').\13\ Rule 19b-7 establishes the 
procedures for Security Futures Product Exchanges and Limited Purpose 
National Securities Associations when filing proposed rule changes that 
relate to certain matters, including higher margin levels, fraud or 
manipulation, recordkeeping, reporting, listing standards, or decimal 
pricing for security futures products, sales practices for security 
futures products for persons who effect transactions in security 
futures products, or rules effectuating such exchanges' and 
associations' obligations to enforce the securities laws. Pursuant to 
section 19(b)(7)(A) of the Exchange Act,\14\ the Commission must 
promptly notice such proposed rule changes. Accordingly, the Commission 
is now adding new paragraph (a)(75) to Rule 30-3 to authorize the 
Director to publish notices of proposed rule changes relating to 
security futures products filed pursuant to section 19(b)(7)(A) of the 
Exchange Act.
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    \7\ See Securities Exchange Act Release No. 44692 (August 13, 
2001). The Commission also is adopting Rule 6a-4, Form 1-N, and 
amendments to Rules 6a-2 and 6a-3 under the Exchange Act and Rule 
202.3 of the Commission's procedural rules.
    \8\ 17 CFR 240.19b-7.
    \9\ 17 CFR 249.822.
    \10\ 17 CFR 240.19b-4.
    \11\ 17 CFR 249.819.
    \12\ 15 U.S.C. 78f(g).
    \13\ 15 U.S.C. 78o-3(k).
    \14\ 15 U.S.C. 78s(b)(7)(A).
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    The CFMA also added section 19(b)(7)(C) to the Exchange Act,\15\ 
which grants to the Commission, after consultation with the Commodity 
Futures Trading Commission, the authority to summarily abrogate a 
proposed rule change that has taken effect pursuant to section 
19(b)(7)(B) of the Exchange Act \16\ if it appears to the Commission 
that such rule change unduly burdens competition or efficiency, 
conflicts with the securities laws, or is inconsistent with the public 
interest and the protection of investors.\17\ In the event that this 
occurs, Security Futures Product Exchanges and Limited Purpose National 
Securities Associations would be required, pursuant to sections 
6(g)(4)(B)(iii) \18\ and 15A(k)(3)(C) \19\ of the Exchange Act, 
respectively, to refile the proposed rule change pursuant to the 
requirements of section 19(b)(1) of the Exchange Act.\20\ Accordingly, 
the Commission is adding new paragraph (a)(76) to Rule 30-3 to 
authorize the Director to abrogate a proposed rule change relating to 
security futures products and require that it be refiled in accordance 
with section 19(b)(1) of the Exchange Act.
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    \15\ 15 U.S.C. 78s(b)(7)(C).
    \16\ 15 U.S.C. 78s(b)(7)(B). Pursuant to this Section, 
Commission action to abrogate a rule change will not affect the 
validity or force of the rule change during the period it was in 
effect.
    \17\ The Commission notes that it currently exercises similar 
abrogation authority pursuant to Section 19(b)(3)(C) of the Exchange 
Act, 15 U.S.C. 78s(b)(3)(C), with respect to proposed rule changes 
filed by the existing self-regulatory organizations that are 
immediately effective upon filing pursuant to Section 19(b)(3)(A) of 
the Exchange Act, 15 U.S.C. 78s(b)(3)(A).
    \18\ 15 U.S.C. 78f(g)(4)(B)(iii).
    \19\ 15 U.S.C. 78o-3(k)(3)(C).
    \20\ 15 U.S.C. 78s(b)(1). Pursuant to Section 19(b)(7)(C) of the 
Exchange Act, 15 U.S.C. 78s(b)(7)(C), a self-regulatory organization 
cannot enforce a rule that has been abrogated by the Commission, 
unless the self-regulatory organization refiles the proposed rule 
change under Section 19(b)(1) of the Exchange Act, 15 U.S.C. 
78s(b)(1), and it is approved by the Commission.
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    These delegations of authority to the Director are intended to 
conserve Commission resources by permitting Division of Market 
Regulation staff to publish notices of proposed rule changes filed by 
Security Futures Product Exchanges and Limited Purpose National 
Securities Associations relating to security futures products and to 
abrogate such proposed rule changes and require that they be refiled in 
accordance with section 19(b)(1) of the Exchange Act. The Commission 
anticipates that the delegation of authority will facilitate the timely 
implementation of Rule 19b-7 and amendments to Rule 19b-4. 
Nevertheless, the staff may submit matters to the Commission for 
consideration as it deems appropriate.
    The Commission finds, in accordance with section 553(b)(3)(A) of 
the Administrative Procedure Act,\21\ 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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    \21\ 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).

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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 by adding paragraphs (a)(75) and 
(a)(76) to read as follows:


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

* * * * *
    (a) * * *
    (75) Pursuant to Section 19(b)(7)(A) of the Act, 15 U.S.C. 
78s(b)(7)(A), to publish notices of proposed rule changes filed by 
self-regulatory organizations relating to security futures products.
    (76) Pursuant to Section 19(b)(7)(C) of the Act, 15 U.S.C. 
78s(b)(7)(C), to abrogate a change in the rules of a self-regulatory 
organization relating to security futures products and require that it 
be refiled in accordance with Section 19(b)(1) of the Act, 15 U.S.C. 
78s(b)(1).
* * * * *

    By the Commission.

    Dated: August 13, 2001.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-20734 Filed 8-17-01; 8:45 am]
BILLING CODE 8010-01-U