[Federal Register Volume 66, Number 169 (Thursday, August 30, 2001)]
[Notices]
[Pages 45885-45886]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-21891]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44742; File No. SR-Phlx-2001-77]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Philadelphia Stock Exchange, Inc. to Amend Exchange Rule 
625, Trading Floor Training, Equity Floor Procedure Advice F-30, and 
Options Floor Procedure Advice F-30

August 23, 2001.
    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 9, 2001, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Phlx. 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 Phlx proposes to amend Phlx Rule 625 (``Trading Floor 
Training''), Equity Floor Procedure Advice F-30, and Options Floor 
Procedure Advice F-30 (collectively referred to as ``Advice F-30'') \3\ 
to allow the Exchange to require from time to time its members and 
their respective personnel to attend mandatory training sessions 
related to conduct, health and safety on the Exchange's equity and 
options trading floors (collectively referred to as ``trading floor''). 
The Phlx also proposes to amend the fine schedule in Equity Floor 
Procedure Advice F-30 so that it is consistent with the fine schedule 
in the corresponding Options Floor

[[Page 45886]]

Procedure Advice.\4\ The text of the proposed rule change is available 
at the Office of the Secretary, the Phlx and the Commission.
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    \3\ Advice F-30 and the accompanying fine schedules are part of 
the Exchange's minor rule violation and reporting plan (``minor rule 
plan''). The Exchange's minor rule plan, codified in Phlx Rule 970 
(``Floor Procedure Advices: Violations, Penalties, and Procedures'') 
contains floor procedure advices with accompanying fine schedules 
such that a minor rule violation and reporting plan citation could 
be issued. Rule 19d-1(c)(2) under the Act authorizes national 
securities exchanges to adopt minor rule violation plans for summary 
discipline and abbreviated reporting. 17 CFR 240.19d-1(c)(2). Rule 
19d-1(c)(1) under the Act requires prompt filing with the Commission 
of any final disciplinary actions. 17 CFR 2401.19d-1(c)(1). However, 
minor rule violations not exceeding $2,500 are deemed not final, 
thereby permitting periodic, as opposed to immediate, reporting.
    \4\ The fine schedule applicable to Options Floor Procedure 
Advice F-30 was recently amended. See Securities Exchange Act 
Release No. 44537 (July 11, 2001), 66 FR 37511 (July 18, 2001) 
(order approving SR-Phlx-2001-36).
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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 Phlx 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 Phlx 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 amend Phlx Rule 625 
(``Trading Floor Training'') and Advice F-30 to allow the Exchange to 
require from time to time its members and their respective personnel to 
attend mandatory training sessions related to conduct, health and 
safety on the Exchange's trading floor. The Phlx also proposes to amend 
the fine schedule in Equity Floor Procedure Advice F-30 so that it is 
consistent with the fine schedule in the corresponding Options Floor 
Procedure Advice.\5\
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    \5\ The Phlx Fine Schedule allows for a fine to be implemented 
on a three-year running calendar basis. The term ``three-year 
running calendar basis'' means that the Exchange will impose 
sanctions on a three-year running cycle, by which a violation of the 
training requirements which occurs within three years of the first 
violation of the training requirements, will be treated as a second 
occurrence, and any subsequent violation within three years of the 
previous violation of the training requirements will be subject to 
the next highest sanction specified in the Fine Schedule.
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    In 1999, the Exchange adopted Phlx Rule 625 and Advice F-30, which 
relate to trading floor training. Phlx Rule 625 and Advice F-30 
currently focus primarily on instructing members and their respective 
personnel on changes in automated systems or new technology that is 
utilized by the Exchange.
    The Phlx believes that the proposed amendment would allow the 
Exchange also to require its members and their respective personnel to 
attend mandatory training sessions related to conduct, health and 
safety on the Exchange's trading floor.
    The Phlx believes that conducting training sessions related to 
conduct, health and safety on the trading floor should promote a safer 
work environment and inform its members and their respective personnel 
of important issues related to the Exchange's trading floor. The Phlx 
is cognizant of the time demands that are placed on its members, and 
therefore intends to provide notice and schedule such training sessions 
only as it deems necessary and appropriate.
    Additionally, the Phlx proposes to amend the fine schedule for 
Equity Floor Procedure Advice F-30 to make it consistent with the 
corresponding fine schedule in Options Floor Procedure Advice F-30.
2. Statutory Basis
    The Phlx believes that the proposal is consistent with section 6 of 
the Act,\6\ in general, and section 6(b)(5) of the Act,\7\ in 
particular, in that it is designed to promote just and equitable 
principles of trade and to protect investors and the public interest. 
In addition, the Phlx believes that the proposal is consistent with 
section 6(b)(4) of the Act \8\ in that it provides for the equitable 
allocation of reasonable dues, fees and other charges among its members 
by conforming the fine schedules that appear in Advice F-30.
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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ 15 U.S.C. 78f(b)(4).
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    Moreover, the Phlx believes that mandatory training for equity and 
options floor members is consistent with the provisions of section 
6(c)(3)(B) of the Act,\9\ which makes it the responsibility of an 
exchange to prescribe standards of training, experience, and competence 
for persons associated with self-regulatory organization members.
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    \9\ 15 U.S.C. 78f(c)(3)(B).
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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 inappropriate burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Phlx 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

    Within 35 days of the 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 Exchange 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 rule 
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 
Phlx.
    All submissions should refer to File No. SR-Phlx-2001-77 and should 
be submitted by September 20, 2001.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to the delegated authority.\10\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-21891 Filed 8-29-01; 8:45 am]
BILLING CODE 8010-01-M