[Federal Register Volume 66, Number 234 (Wednesday, December 5, 2001)]
[Notices]
[Pages 63270-63271]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-30142]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45117; File No. SR-CHX-2001-08]


Self-Regulatory Organizations; Order Granting Approval of 
Proposed Rule Change by the Chicago Stock Exchange, Incorporated, 
Amending Its Minor Rule Violation Plan

November 29, 2001.
    On April 23, 2001, the Chicago Stock Exchange, Incorporated 
(``CHX'' 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 that would amend CHX Article XII, 
Rule 9(h), Minor Rule Violations, to include CHX Article XX, Rule 
43(d), Trading in Nasdaq/NM Securities/Manual Executions, in the 
Exchange's Minor Rule Violation Plan (``Plan''). Specifically, a member 
who fails to manually execute a Nasdaq/NM market or marketable limit 
order at the national best bid or offer or better at the time of its 
receipt or at the best price available in another market place may be 
fined under the Plan. Notice of the proposed rule change was published 
for comment in the Federal Register on October 10, 2001.\3\ The 
Commission received no comments on the proposal. This order grants 
approval of the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 44900 (October 2, 2001), 
66 FR 51694.
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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)(5) of the Act\6\ 
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,\7\ because the proposal provides a mechanism for the 
appropriate discipline for violations of certain rules and regulations.
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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)(5).
    \7\ 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\8\ because the proposal provides a fair 
procedure for the disciplining of members and persons associated with 
members. Finally, the Commission finds the proposal is consistent with 
Securities Exchange Act Rule 19d-1(c)(2)\9\ that governs minor rule 
violation plans.
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    \8\ 15 U.S.C. 78f(b)(7).
    \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

[[Page 63271]]

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 CHX 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-CHX-2001-08), 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 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-30142 Filed 12-4-01; 8:45 am]
BILLING CODE 8010-01-M