[Federal Register Volume 66, Number 190 (Monday, October 1, 2001)]
[Notices]
[Page 49990]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-24475]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44840; File No. SR-ISE-00-11]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change and Amendment No. 1 by the International Securities Exchange LLC 
Relating to Membership Qualifications

September 24, 2001.
    On November 28, 2000, the International Securities Exchange LLC 
(``ISE'' or ``Exchange''), filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to revise ISE Rule 302, 
``Qualification of Members.'' On July 2, 2001, the ISE filed Amendment 
No. 1 to the proposal.\3\ The proposal, as amended, would eliminate the 
requirement in current ISE Rule 302(b) that an ISE member be organized 
under the laws of one of the states of the United States or under other 
laws that the ISE's Board of Directors approves. In addition, the 
proposal would revise ISE Rule 302(b) to provide that an ISE member 
that does not maintain an office in the United States responsible for 
preparing and maintaining financial and other reports required to be 
filed with the Commission and the ISE must: (1) Prepare all such 
reports, and maintain a general ledger chart of account and any 
description thereof, in English and U.S. dollars; (2) reimburse the ISE 
for any expense incurred in connection with examinations of the member 
to the extent that such expenses exceed the cost of examining a member 
located within the continental United States; and (3) ensure the 
availability of an individual fluent in English and knowledgeable in 
securities and financial matters to assist representatives of the ISE 
during examinations.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 eliminated a provision that would have 
amended ISE Rule 302 to state that an ISE member must be a member of 
at least one other national securities exchange registered under 
Section 6 of the Act, 15 U.S.C. 78f, or a national securities 
association registered under Section 15A of the Act, 15 U.S.C. 78o-
3, that is designated responsibility for examining the ISE member 
for compliance with applicable financial responsibility rules 
pursuant to Rule 17d-1 under the Act, 17 CFR 240.17d-1. Amendment 
No. 1 notes that all ISE members currently are required to be 
members of another self-regulatory organization and that it would be 
necessary for the ISE to submit a rule change to the Commission 
before permitting any ISE member to be a member solely of the ISE.
---------------------------------------------------------------------------

    The proposed rule change and Amendment No. 1 were published for 
comment in the Federal Register on July 24, 2001.\4\ No comments were 
received regarding the proposal, as amended. This order approved the 
proposed rule change, as amended.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 44567 (July 18, 
2001), 66 FR 38445.
---------------------------------------------------------------------------

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange and, in 
particular, the requirements of Section 6 of the Act \5\ and the rules 
and regulations thereunder.\6\ Specifically, the Commission finds that 
the proposal is consistent with Section 6(b)(5) of the Act \7\ because 
it is designed to facilitate the examination of foreign-based ISE 
members, thereby helping to ensure that foreign-based members comply 
with the ISE's rules and the federal securities laws.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f.
    \6\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    For the foregoing reasons, the Commission finds that the proposal, 
as amended, is consistent with the requirements of the Act and rules 
and regulations thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-ISE-00-11), as amended, is 
approved.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    For the Commission, by the Division of Market Regulation, pursuant 
to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-24475 Filed 9-28-01; 8:45 am]
BILLING CODE 8010-01-M