[Federal Register Volume 70, Number 222 (Friday, November 18, 2005)]
[Notices]
[Pages 70014-70015]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-6378]


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SECURITIES AND EXCHANGE COMMISSION



[Release No. 34-52768; File No. SR-NYSE-2005-64]


Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Order Approving Proposed Rule Change to Add Rules Regarding Time 
Tracking Requirements of Specialists and Specialist Organizations to 
Its Minor Rule Violation Plan

November 10, 2005.
    On September 22, 2005, 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

[[Page 70015]]

of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule 
change to amend its Minor Rule Violation Plan (``MRVP'') to include 
NYSE Rule 103.12, which requires specialists and specialist 
organizations to record and report the actual time spent working as a 
specialist or clerk while on the trading floor of the Exchange. The 
proposed rule change was published for comment in the Federal Register 
on October 7, 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. 52550 (October 3, 
2005), 70 FR 58770.
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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 encourage specialists and clerks to report accurately the 
time they work on the trading floor should help the Exchange carry out 
its supervisory responsibilities and thereby help protect investors and 
the public interest. The Commission also believes that handling 
violations of NYSE Rule 103.12 pursuant to the MRVP 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 NYSE Rule 476A provides procedural rights to 
a person fined under the MRVP to contest the fine and permits a hearing 
on the matter, the Commission believes the MRVP, 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 the MRVP 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 NYSE rules and all other 
rules subject to the imposition of fines under the MRVP. The Commission 
believes that the violation of any self-regulatory organization's 
rules, as well as Commission rules, is a serious matter. However, the 
MRVP 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 NYSE 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 MRVP or whether a 
violation requires formal disciplinary action under NYSE Rule 476.
    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-NYSE-2005-64) 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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Jonathan G. Katz,
Secretary.
[FR Doc. E5-6378 Filed 11-17-05; 8:45 am]
BILLING CODE 8010-01-P