[Federal Register Volume 66, Number 232 (Monday, December 3, 2001)]
[Notices]
[Pages 60233-60234]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-29827]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45096; File No. SR-NYSE-2001-28]


Self-Regulatory Organizations; the New York Stock Exchange, Inc.; 
Order Granting Approval to Proposed Rule Change To Administer NYSE Rule 
91.10 Pursuant to the NYSE's Minor Rule Violation Plan

November 21, 2001.
    On August 21, 2001, the New York Stock Exchange, Inc. (``NYSE'' 
``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 administer NYSE Rule 91.10, Taking or Supplying 
Securities Named in Order pursuant to the NYSE's Minor Rule Violation 
Plan (``Plan''). NYSE Rule 91.10 requires that whenever a specialist 
has elected to take or supply for his or her account the securities 
named in an order entrusted to the specialist, he or she must summon a 
representative of the firm that entered

[[Page 60234]]

the order to confirm, in written format, the acceptance or rejections 
of such transaction.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    The proposal was published for comment in the Federal Register on 
September 7, 2001.\3\ The Commission received no comments on the 
proposal.
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    \3\ See Securities Exchange Act Release No. 44752 (August 29, 
2001), 66 FR 46853.
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    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 \4\ and, in 
particular, the requirements of section 6 of the Act \5\ and the rules 
and regulations thereunder. The Commission finds specifically that the 
proposed rule change is consistent with section 6(b)(6) of the Act \6\ 
in that it will provide a procedure whereby member organizations can be 
appropriately disciplined in those instances when a rule violation is 
minor in nature, but a sanction more serious than an admonition letter 
is appropriate. Additionally, the Commission finds the proposed rule 
change is consistent with the requirements of sections 6(b)(7) \7\ and 
6(d)(1) \8\ of the Act. Section 6(b)(7) requires the rules of an 
exchange to be in accordance with the provisions of section 6(d) of the 
Act, and, in general, to provide a fair procedure for the disciplining 
of members and persons associated with members. Section 6(d)(1) 
requires an exchange to bring specific charges, notify such member or 
person of, and give him an opportunity to defend against, such charges, 
and keep a record, in any proceeding to determine whether a member or 
person associated with a member should be disciplined. Finally, the 
Commission finds the proposal is consistent with Rule 19d-1(c)(2) \9\ 
that governs minor rule violation plans.
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    \4\ 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).
    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(6).
    \7\ 15 U.S.C. 78f(b)(7).
    \8\ 15 U.S.C. 78f(d)(1).
    \9\ 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 this rule, 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 the rule violations 
that do not rise to the level of requiring formal disciplinary 
proceedings. The Commission expects that the NYSE 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,\10\ that the proposed rule change (SR-NYSE-2001-28) be, and it 
hereby is, approved.
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    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-29827 Filed 11-30-01; 8:45 am]
BILLING CODE 8010-01-M