[Federal Register Volume 67, Number 90 (Thursday, May 9, 2002)]
[Notices]
[Pages 31398-31399]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11542]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45869; File No. SR-NYSE-2002-06]


Self Regulatory Organizations; New York Stock Exchange, Inc.; 
Order Granting Approval to Proposed Rule Change and Amendment No. 1 
Thereto Amending Exchange Rule 351 Concerning the Reporting of Criminal 
Offenses by Members and Member Organizations to the Exchange

May 3, 2002.
    On January 9, 2002, the New York Stock Exchange, Inc. (``NYSE'' 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 amend NYSE Rule 351 in order to narrow the 
scope of criminal offenses that must be reported by members and member 
organizations to incidents that are more germane to the conduct of a 
securities related business.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    The proposed rule change was published for comment in the Federal 
Register on February 12, 2002.\3\ The Commission received one comment 
letter on the proposal,\4\ which supports the proposed rule change. On 
April 30, 2002, the Exchange filed Amendment No. 1 to the proposed rule 
change with the Commission.\5\
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    \3\ See Securities Exchange Act Release No. 45404 (February 6, 
2002), 67 FR 6565.
    \4\ See letter to Margaret H. McFarland, Deputy Secretary, 
Commission, from Selwyn J. Notelovitz, Senior Vice President, Global 
Compliance, Charles Schwab & Co., Inc., dated March 5, 2002 
(``Schwab Letter'').
    \5\ See letter to Katherine England, Assistant Director, 
Division of Market Regulation, Commission, from Susan Light, Vice 
President, Enforcement, NYSE, dated April 29, 2002 (``Amendment No. 
1''). In Amendment No. 1, the Exchange amended the proposed rule 
change to require that an arrest, arraignment, or conviction before 
a military court of any of the enumerated crimes be reported to the 
Exchange. In addition, the Exchange added the conspiracy to commit 
any one of the enumerated misdemeanors under Exchange Rule 351 to 
the list of crimes that must be reported to the Exchange. This is a 
technical amendment and is not subject to notice and comment.
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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 \6\ 
and, in particular, the requirements of section 6 of the Act \7\ 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 \8\ because narrowing the scope of criminal offenses that members 
and member organizations would be required to report to the Exchange is 
designed to foster cooperation and coordination with persons engaged in 
regulating, clearing, settling and facilitating transactions in 
securities. In particular, limiting the proposed misdemeanors that must 
be reported should minimize the number of immaterial filings and 
maximize the effective use of resources committed to fulfilling self-
regulatory responsibilities at the Exchange. Moreover, the proposed 
rule change would continue to capture the reporting of arrests for 
which any subsequent conviction would subject the individual to a 
statutory disqualification under Section 3(a)(39) of the Act.\9\
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    \6\ In approving this proposed rule change, the Commission notes 
that it has considered its impact on efficiency, competition, and 
capital formation. 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ 15 U.S.C. 78c(a)(39).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\10\, that the proposed rule change and Amendment

[[Page 31399]]

No. 1 thereto (File No. SR-NYSE-2002-06) are 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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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 02-11542 Filed 5-8-02; 8:45 am]
BILLING CODE 8010-01-P