[Federal Register Volume 67, Number 104 (Thursday, May 30, 2002)]
[Notices]
[Page 37891]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-13483]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45980; File No. SR-ISE-2002-07]


Self-Regulatory Organizations; International Securities Exchange 
LLC; Order Granting Approval to Proposed Rule Change Relating to 
Mandatory System Testing

May 23, 2002.
    On February 13, 2002, the International Securities Exchange LLC 
(the ``Exchange'' or the ``ISE'') 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 relating to mandatory systems 
testing. Specifically, the ISE proposed a new rule, ISE Rule 419 
(``Mandatory Systems Testing''), to allow the Exchange to designate 
certain systems tests as mandatory for specified classes of members and 
to discipline members that failed to engage in a mandatory test. In 
addition, the Exchange proposed modifications to ISE Rule 1614 
(``Imposition of Fines for Minor Rule Violations'') to set forth the 
applicable fines for a member's failure to engage in a mandatory 
systems test under ISE Rule 419.
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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 April 17, 2002.\3\ The Commission received no comments on 
the proposal.
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    \3\ Securities Exchange Act Release No. 45726 (April 10, 2002), 
67 FR 18964.
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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. Specifically, the Commission believes that 
the proposed rule change is consistent with Section 6(b)(5) of the 
Act,\6\ which requires, among other things, that the Exchange's rules 
be designed to promote just and equitable principles of trade, to 
remove impediments to and perfect the mechanism for a free and open 
market and a national market system and, in general, to protect 
investors and the public interest. In addition, the Commission believes 
that the proposal is consistent with Section 6(b)(6) of the Act,\7\ 
which requires the Exchange's rules to provide that its members and 
persons associated with its members be appropriately disciplined for 
violation of the provisions of the Act, the rules or regulations 
thereunder, or the rules of the Exchange.
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    \4\ In approving this proposed rule change, the Commission notes 
that it 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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    The Commission believes that the rule change should improve ISE's 
ability to work closely with its members in testing new systems changes 
in a timely manner. In addition, the Commission believes that the rule 
change should allow the Exchange to ascertain whether its members' 
systems are compatible with the Exchange's systems, which should 
benefit ISE's members as well as investors that transact business on 
the Exchange.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (File No. SR-ISE-2002-07) be, and 
it hereby is, approved.
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    \8\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-13483 Filed 5-29-02; 8:45 am]
BILLING CODE 8010-01-P