[Federal Register Volume 66, Number 231 (Friday, November 30, 2001)]
[Notices]
[Pages 59830-59831]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-29715]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45095; File No. SR-PHLX-2001-68]


Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; 
Order Granting Approval to Proposed Rule Change Regarding Notification 
of Changes in Business Operations and the Minor Rule Violation 
Enforcement and Reporting Plan

November 21, 2001.
    On July 19, 2001, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``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 adopt an Equity Floor Procedure Advice and an 
Options Floor Procedure Advice, with fine schedules under the Phlx's

[[Page 59831]]

minor rule violation enforcement and reporting plan (``Plan'') 
containing the requirements for notification established in Phlx Rule 
610, Notification of Changes in Business Operations. On September 20, 
2001, the Phlx amended the proposal.\3\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The amendment completely replaced and superseded the 
original proposal.
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    The proposed rule change, as amended, was published for comment in 
the Federal Register on October 1, 2001.\4\ The Commission received no 
comments on the proposal.
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    \4\ See Securities Exchange Act Release No. 44844 (September 25, 
2001), 66 FR 49994.
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    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange \5\ 
and, in particular, the requirements of section 6 of the Act \6\ and 
the rules and regulations thereunder. The Commission finds specifically 
that the proposed rule change is consistent with section 6(b)(5) of the 
Act \7\ because it will help prevent fraudulent and manipulative acts 
and practices, as well as promote just and equitable principles of 
trade. The Commission finds the proposal is consistent with section 
6(b)(6) of the Act,\8\ because the proposal provides a mechanism for 
the appropriate discipline for violations of certain rules and 
regulations.
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    \5\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ 15 U.S.C. 78f(b)(6).
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    In addition, the Commission finds the proposal is consistent with 
section 6(b)(7) of the Act \9\ because the proposal provides a fair 
procedure for the disciplining of members and persons associated with 
members. The Commission also finds the proposal is consistent with 
section 6(b)(8) of the Act,\10\ in that it furthers the statutory goal 
of providing a fair procedure for disciplining the Phlx's members and 
associated persons. Finally, the Commission finds the proposal is 
consistent with Securities Exchange Act Rule 19d-1(c)(2) \11\ that 
governs minor rule violation plans.
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    \9\ 15 U.S.C. 78f(b)(7).
    \10\ 15 U.S.C. 78f(b)(8).
    \11\ 17 CFR 240.19d-1(c)(2).
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    In approving this proposal, the Commission in no way minimizes the 
importance of compliance with these rules, and all other rules subject 
to the imposition of fines under the Plan. The Commission believes that 
the violation of any self-regulatory organization's rules, as well as 
Commission rules, is a serious matter. However, in an effort to provide 
the Exchange with greater flexibility in addressing certain violations, 
the Plan provides a reasonable means to address rule violations that do 
not rise to the level of requiring formal disciplinary proceedings. The 
Commission expects that the Phlx will continue to conduct surveillance 
with due diligence, and make a determination based on its findings 
whether fines of more or less than the recommended amount are 
appropriate for violations of rules under the Plan, on a case by case 
basis, or if a violation requires formal disciplinary action.
    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\12\ that the proposed rule change (SR-PHLX-2001-68), as amended, 
be, and it hereby is, approved.
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    \12\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-29715 Filed 11-29-01; 8:45 am]
BILLING CODE 8010-01-M