[Federal Register Volume 70, Number 70 (Wednesday, April 13, 2005)]
[Notices]
[Pages 19535-19536]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-1742]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51502; File No. SR-Amex-2005-009]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change by the American Stock Exchange LLC To Require Members To 
Complete Systems Training and To Include Violations of This Requirement 
in Its Minor Rule Violation Plan

April 7, 2005.
    On February 1, 2005, the American Stock Exchange LLC (``Amex'' 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 new Amex Rule 51 to require its members 
to complete training in such systems as the Exchange may require and to 
amend its Minor Rule Violation Plan (``Plan'') to allow the Exchange to 
issue minor fines for non-compliance with this rule. The proposed rule 
change was published for comment in the Federal Register on March 8, 
2005.\3\ The Commission received no comments regarding the proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 51294 (March 2, 
2005), 70 FR 11282.
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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\ In 
particular, the Commission believes that the proposal is consistent 
with Section 6(b)(5) of the Act,\5\ because a rule that is reasonably 
designed to require Exchange members to complete necessary systems 
training should protect investors and the public interest. The 
Commission also believes that handling violations of Amex Rule 51 
pursuant to the Exchange's Plan is consistent with Sections 6(b)(1) and 
6(b)(6) of the Act \6\ which require that the rules of an exchange 
enforce compliance with, and provide appropriate discipline for, 
violations of Commission and Exchange rules. In addition, because 
existing Amex Rule 590 provides procedural rights to a person fined 
under the Plan to contest the fine and permits a hearing on the matter, 
the Commission believes the Plan, as amended by this proposal, provides 
a fair procedure for the disciplining of members and persons associated 
with members, consistent with Sections 6(b)(7) and 6(d)(1) of the 
Act.\7\
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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. See 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 15 U.S.C. 78f(b)(1) and 78f(b)(6).
    \7\ 15 U.S.C. 78f(b)(7) and 78f(d)(1).
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    Finally, the Commission finds that the proposal is consistent with 
the public interest, the protection of investors, or otherwise in 
furtherance of the purposes of the Act, as required by Rule 19d-1(c)(2) 
under the Act \8\ which governs minor rule violation plans. The 
Commission believes that the change to Amex's Plan will strengthen its 
ability to carry out its oversight and enforcement responsibilities as 
a self-regulatory organization in cases where full disciplinary 
proceedings are unsuitable in view of the minor nature of the 
particular violation.
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    \8\ 17 CFR 240.19d-1(c)(2).
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    In approving this proposed rule change, the Commission in no way 
minimizes the importance of compliance with Amex rules and all other 
rules subject to the imposition of fines under the Exchange's Plan. The 
Commission believes that the violation of any self-regulatory 
organization's

[[Page 19536]]

rules, as well as Commission rules, is a serious matter. However, the 
Exchange's Plan provides a reasonable means of addressing rule 
violations that do not rise to the level of requiring formal 
disciplinary proceedings, while providing greater flexibility in 
handling certain violations. The Commission expects that Amex will 
continue to conduct surveillance with due diligence and make a 
determination based on its findings, on a case-by-case basis, whether a 
fine of more or less than the recommended amount is appropriate for a 
violation under the Plan or whether a violation requires formal 
disciplinary action.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\9\ and Rule 19d-1(c)(2) under the Act,\10\ that the proposed rule 
change (SR-Amex-2005-009) be, and hereby is, approved and declared 
effective.
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    \9\ 15 U.S.C. 78s(b)(2).
    \10\ 17 CFR 240.19d-1(c)(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); 17 CFR 200.30-3(a)(44).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-1742 Filed 4-12-05; 8:45 am]
BILLING CODE 8010-01-P