Federal Register / Vol. 65, No. 92 / Thursday, May 11, 2000 / Notices 30465

5 15 U.S.C. 78f.

6 In approving this rule, the Commission has

considered the proposed rule’s impact on

efficiency, competition, and capital formation. 15

U.S.C. 78c(f).

7 15 U.S.C. 78f(b)(5).

8See 17 CFR 240.11b–1; NYSE Rule 104.

9See Securities Exchange Act Release No. 41574,

70 S.E.C. Docket 106 (June 29, 1999).

10See id at 9.

11 15 U.S.C. 78s(b)(2).

12 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3See Letters from Michael D. Pierson, Director,

Regulatory Policy, PCX, to Michael A. Walinskas,

Associate Director, Division of Market Regulation

(‘‘Division’’), SEC, dated June 24, 1999

(‘‘Amendment No. 1’’) from Michael D. Pierson to

Jennifer Colihan, Attorney, Division, SEC, dated

January 7, 2000 (‘‘Amendment No. 2’’); from

Michael D. Pierson to Kelly Riley, Attorney,

Division, SEC, dated January 14, 2000

(‘‘Amendment No. 3’’).

4See Exchange Act Release No. 42384 (February

3, 2000), 65 FR 6675.

5See Letter from Robert Pacileo, Senior Attorney,

Regulatory Policy, PCX, to Nancy J. Sanow, Senior

Special Counsel, Division, SEC, dated April 20,

Continued

education program before such

individuals would be permitted to act as

members on the Floor; and (ii)

participation by all Floor members in an

Exchange-sponsored educational

program, conducted semi-annually, and

at such other times as may be

appropriate in connection with any

particular matter or matters. Rule 103A

would also make it mandatory for Floor

members to participate in any testing

programs the Exchange may introduce

from time to time in connection with

the mandatory education program.

d. Stock Assignments and

Reassignments and Organizational

Changes of Specialist Units

The Exchange proposes to amend rule

103A to codify the Committee’s

authority with respect to approving

stock assignments and reassignments,

assignments in special stock situations,

and organizational changes to specialist

units. Such situations typically involve

(i) changes in a specialist unit’s

organizational structure effecting

control of the specialist unit, such as

split-ups and mergers; (ii) withdrawal of

individual specialists from one

specialist unit, where the specialists

propose to register with another unit

and transfer certain securities to such

other unit; and (iii) assignments of

newly-listed securities to a specialist

unit already registered in a security with

a trading relationship to the newlylisted securities (e.g., a corporate

restructuring of a listed company; stocks

involved in mergers of listed companies;

and immediate relisting of a listed

company that delisted for technical

reasons). In all of these situations, the

MPC will review the proposal, and

approve the matter if the Committee

believes that market quality in the

securities subject to the proposal will

not be eroded.

III. Discussion

The Commission finds that the

proposed rule change, as amended, is

consistent with the requirements of

Section 6 of the Act 5 and the rules and

regulations thereunder applicable to a

national security exchange.6 In

particular, the Commission finds the

proposed rule change is consistent with

Section 6(b)(5) of the Act 7 which

requires, among other things, that the

rules of an exchange be designed to

prevent fraudulent and manipulative

acts and practices, to remote

impediments to and perfect the

mechanism of a free and open market,

and to protect investors and the public

interest.

Specialists play a crucial role in

providing stability, continuity, and

liquidity to the trading of securities.

Specialists are obligated by the NYSE

and the Act and rules thereunder, 8 to

maintain fair and orderly markets in

designated securities. The Commission

supports effective NYSE oversight of the

specialist’s activities and performance,

including comparing a specialist’s score

on the quarterly Specialist Evaluation

Questionnaire with other specialist’s

scores in an effort to provide an

incentive to increase specialist

performance. The Commission believes

that giving the MPC the discretion to

impose an allocation freeze should

provide the Exchange with the means to

identify and correct poor specialist

performance and to ascertain whether

specialists are maintaining fair and

orderly markets in their assigned

securities.

Furthermore, the proposed floor

member qualification and continuing

education requirements are a result of

NYSE’s undertakings.9 The NYSE

pledged to design and implement a

mandatory, regular education program

for Floor members that would address

Floor members’ obligations and

prohibitions under the federal securities

laws and NYSE rules.10 The

Commission believes that NYSE’s

proposal to require Floor members to

participate in an education program

prior to being permitted to act as

members is appropriate and consistent

with this undertaking. Also, the semiannual, or more frequent as the NYSE

deems appropriate, educational

programs for all Floor members satisfies

the NYSE’s undertaking to provide

regular, mandatory education programs.

The Exchange also proposed mandatory

testing programs that should ensure that

Floor members are aware of Floor

members’ obligations and prohibitions

under the federal securities laws and

NYSE rules.

As a result, because the proposed

amendment of NYSE Rule 103A

promotes increased specialist

performance and creates mandatory and

regular training for all floor members,

the Commission believes that NYSE’s

proposed amendment to Rule 103A is

consistent with the provisions of the Act

discussed above.

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,11 that the

proposed rule change (SR–NYSE–99–

42), including amendments Nos. 1 and

2, is approved.

By the Commission, for the Division of

Market Regulation, pursuant to delegated

authority.12

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–11803 Filed 5–10–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42756; File No. SR–PCX–

99–10]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change and

Notice of Filing and Order Granting

Accelerated Approval to Amendment

Nos. 4 and 5 to the Proposed Rule

Change by the Pacific Exchange, Inc.

Amending Its Disciplinary Procedures

May 4, 2000.

I. Introduction

On April 2, 1999, the Pacific

Exchange, Inc. (‘‘PCX’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’ or ‘‘SEC’’)

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 its

disciplinary procedures. On June 25,

1999, January 18, 2000, and January 19,

2000, respectively, the PCX filed

Amendment Nos. 1, 2 and 3 to the

proposed rule change.3 The proposed

rule change including Amendments

Nos. 1, 2 and 3 were published for

comment in the Federal Register on

February 10, 2000.4 On April 21, 2000,

the PCX filed Amendment No. 4 to the

proposal. 5 On April 28, 2000, the PCX

30466 Federal Register / Vol. 65, No. 92 / Thursday, May 11, 2000 / Notices

2000 (‘‘Amendment No. 4’’). Among other things,

Amendment No. 4 added language to prohibit

interested PCX staff with knowledge of a pending

Exchange investigation or disciplinary proceeding

from making ex parte communications. Amendment

No. 4 also proposed language to permit an Exchange

disciplinary committee to issue to interested PCX

staff responsible for an ex parte communication, or

the party who benefited from the communication to

show cause why the claim of the interested PCX

staff should not be adversely affected by reason for

the ex parte communication, including, but not

limited to the entry of an adverse summary

decision.

6See Letter from Robert Pacileo, Senior Attorney,

Regulatory Policy, PCX, to Nancy J. Sanow, Senior

Special Counsel, Division, SEC, dated April 27,

2000 (‘‘Amendment No. 5’’). In Amendment No. 5,

the Exchange proposed to add Rule 10.3(e) which

would require a member of a Hearing Panel, or the

disciplinary committee with jurisdiction over a

proceeding, to recuse himself or herself in the event

a conflict of interest exists.

7The Commission notes that the Exchange has

proposed a similar disciplinary structure and

procedures for the Pacific Equities, Inc. See

Exchange Act Release No. 42178 (Nov. 24, 1999),

64 FR 68136 (Dec. 6, 1999) (File No. SR–PCX–99–

39).

8See Amendment No. 4, supra note 5.

9See Amendment No. 4, supra note 5.

10See Amendment No. 4, supra note 5.

11 In Amendment No. 4, the PCX deleted

Commentary .02 to PCX Rule 10.3 which provided

that a disciplinary proceeding will be considered to

be pending from the date that a Complaint has been

issued pursuant to Rule 10.5 until the proceeding,

including any appeals, becomes final. The PCX

represented in Amendment No. 4 that it will amend

SR–PCX–00–06 to include this as a commentary to

another PCX disciplinary rule.

filed Amendment No. 5 to the

proposal.6

The Commission received no

comments regarding the proposal. This

notice and order approves the proposed

rule change, as amended, and solicits

comments from interested persons on

Amendment Nos. 4 and 5.

II. Description of the Proposal

The PCX is proposing to amend its

disciplinary proceedings rules,7 and in

particular, to add new rules to codify

the independent function of PCX

Regulatory Staff; to clarify what

communications are improper in the

context of pending investigations or

disciplinary proceedings; and to provide

PCX Regulatory Staff with the ability to

issue formal complaints for the alleged

violation of Exchange rules.

A. Independence of Regulatory Staff

PCX proposes to amend Rule 10.2

governing the procedures for

investigating possible violations of

Exchange rules to ensure the

independence of the PCX Regulatory

Staff, and guarantee its separation from

the Exchange’s commercial interests.

The rule is being modified to explicitly

state that the Exchange’s Regulatory

Staff will function independently of the

commercial interests of the Exchange

and will have the sole discretion to

investigate possible violations within

the disciplinary jurisdiction of the

Exchange. The proposed rule further

provides that no member of the Board

of Governors or the Executive

Committee or non-Regulatory Staff may

interfere with or attempt to influence

the process or resolution of any pending

investigation or disciplinary proceeding.

The Exchange is also proposing to

make various technical and

housekeeping changes to the text of PCX

Rule 10.2, which will now cover both

Exchange investigations and regulatory

cooperation.

B. Ex Parte Communications

The Exchange is proposing to adopt

new PCX Rule 10.3 to codify specific

provisions governing ex parte

communications. The new rule codifies

what communications regarding

pending investigations and disciplinary

proceedings are improper.

The proposed ex parte rules make

clear that no person who is a subject of

a pending Exchange investigation or

pending disciplinary proceeding or any

interested PCX staff member8 may make

an ex parte communication to a member

of the Board of Governors, a member of

any committee with disciplinary

jurisdiction, or any member of the

Exchange Regulatory Staff. The

proposed rule further provides that no

person who is a member of a Hearing

Panel or the disciplinary committee

with jurisdiction over an investigation

or disciplinary proceeding or any

interested PCX staff member 9 may make

an ex parte communication to a member

of the Board of Governors, a member of

the Executive Committee, any member

of Exchange Regulatory Staff, or the

subject of a pending Exchange

investigation or disciplinary proceeding.

Next, the proposed rule prohibits

members of the Board of Governors and

the Exchange Committee, as well as

interested PCX staff members 10 from

making an ex parte communication to

any member of Exchange Regulatory

Staff, the subject of a pending Exchange

investigation or pending disciplinary

proceeding or a member of a Hearing

panel or the disciplinary committee

with jurisdiction over the investigation

or disciplinary proceeding.

With respect to the disclosure of

prohibited communications, proposed

PCX Rule 10.3(b) provides that any

person who receives or makes a

communication prohibited by the Rule

must promptly submit a copy of any

written communications and/or a

substantive description of any oral

communications to Exchange

Regulatory Staff for inclusion in the

record of the investigation or

disciplinary proceeding.

Proposed Exchange Rule 10.3(c) sets

forth remedies applicable to situations

in which prohibited communications

have been made. Specifically, the rule

provides that any member, member

organization, associated person, or

interested PCX staff member who made,

or knowingly caused to be made, a

communication prohibited by

subsection (a) will be subject to

disciplinary action. The rule further

provides that an Exchange disciplinary

committee, to the extent consistent with

the interests of justice, may issue to the

member, member organization or

associated person responsible for the

communication or who benefited from

the communication an order to show

cause why the claim, defense or interest

of the member, member organization or

associated person should not be

adversely affected by reason of such ex

parte communication, including but not

limited to the entry of an adverse

summary decision.

Proposed PCX Rule 10.3(d) clarifies

that nothing in the rule on ex parte

communications prohibits the members

of a disciplinary committee or Exchange

Regulatory Staff from discussing a

pending investigation or disciplinary

proceeding at a meeting of the

committee in connection with: (1) The

adjudication of the investigation

pursuant to the Minor Rule Plan; (2) the

determination of whether to impose

informal discipline; (3) the

determination of whether to authorize a

complaint or take no further action; or

(4) the determination of whether to

accept an offer of settlement.

Proposed Commentary .01 to

Exchange Rule 10.3 defines an ‘‘ex parte

communication’’ as an oral or written

communication made without notice to

all parties, i.e., Exchange Regulatory

Staff and the subjects of investigations

or respondents in disciplinary

proceedings. The Commentary further

states that a written communication is

ex parte unless a copy has been

previously or simultaneously delivered

to all interested parties. It further

provides that an oral communication is

ex parte unless it is made in the

presence of all interested parties except

those who, on adequate prior notice,

declined to be present.11

C. Complaints

PCX Rule 10.3, which the PCX

proposes to renumber as Rule 10.4,

currently provides that formal

complaints for alleged violations of

Federal Register / Vol. 65, No. 92 / Thursday, May 11, 2000 / Notices 30467

12 In approving this proposal, the Commission has

considered the proposed rules’ impact on

efficiency, competition and capital formation. 15

U.S.C. 78c(f).

13 15 U.S.C. 78f(b).

14 15 U.S.C. 78f(b)(5). 15 15 U.S.C. 78f(b)(6). 16 15 U.S.C. 78f(b)(7). 17 15 U.S.C. 78f(b)(5). 18 15 U.S.C. 78f(b)(6). 19 15 U.S.C. 78f(b)(7). 20 15 U.S.C 78f(b)(7).

Exchange rules (and other provisions)

may be authorized by the PCX Board of

Governors, by the Executive Committee

of the Exchange, or by any standing

committee designated by the Board of

Governors to review disciplinary

proceedings. The Exchange is proposing

to modify that provision so that only

Exchange Regulatory Staff designated by

the Exchange and any standing

committee designated by the Board of

Governors to review disciplinary

proceedings has the authority to

determine whether there is probable

cause to issue a formal complaint, i.e.,

probable cause for finding that a

violation within the disciplinary

jurisdiction of the Exchange has

occurred and that further proceedings

are warranted. The PCX also proposes to

make certain technical changes to the

text of current Exchange Rule 10.3 for

clarification purposes, e.g., changing the

term ‘‘charged’’ to ‘‘alleged.’’

Further, PCX proposes to amend its

rule governing complaints to provide

that at any time prior to service of the

written answer to the Complaint, the

Complaint may be amended to allege

new matters of fact or law. However,

after service of the written answer, the

Complaint may only be amended if the

Hearing Panel concludes that good

cause exists for the amendment based

upon the submission of a written

motion by the Exchange.

Finally, the Exchange is proposing to

adopt new Commentary .01 to new PCX

Rule 10.4 to provide that the term

‘‘probable cause’’ means facts and

circumstances that establish a

reasonable likelihood that the person

committed the violation at issue.

D. Summary Determinations

The Exchange proposes to renumber

PCX Rule 10.5 to Rule 10.4(c).

III. Discussion

For the reasons discussed below, the

Commission finds that the proposed

changes to the PCX Rules governing

investigations and regulatory

cooperation, ex parte communications

and complaints are consistent with the

Act, improve the current disciplinary

system, and should provide fair and

efficient procedures for conducting

investigations.12 Therefore, the

Commission finds that the proposed

rule change is consistent with Section

6(b) of the Act,13 and in particular with

Sections 6(b)(5),14 6(b)(6) 15 and Section

6(b)(7) 17 of the Act.

Section 6(b)(5) requires, among other

things, that the rules of an exchange be

designed to prevent fraudulent and

manipulative acts and practices and to

protect investors and the public

interest.17 Section 6(b)(6) requires,

among other things, that the rules of an

exchange provide that its members shall

be appropriately disciplined for

violations of the Act, the rules and

regulations thereunder or the rules of an

exchange.18 Section 6(b)(7) requires that

the rules of an Exchange, among other

things, should provide a fair procedure

for disciplining members.19

A. Investigations and Regulatory

Cooperation

The Commission finds that the

proposed rule change, which removes

the authority of the Board of Governors,

Executive Committee, the Ethics and

Business Conduct Committee and the

Floor Trading Committee to review

disciplinary proceedings to be

consistent with the requirements of the

Act.

The proposal gives the Exchange’s

Regulatory Staff the authority to

determine whether to investigate

potential violations within the

disciplinary jurisdiction of the

Exchange. This provision should

prevent inappropriate commercial

interests from improperly influencing

the Exchange’s disciplinary process

consistent with the requirements of

Section 6(b)(7).20 This proposal should

help to ensure that the Exchange’s

disciplinary process operates in a fair

manner without potential improper,

unrelated business processes.

The Commission believes that the

Exchange has struck an appropriate

balance by permitting Governors and

members of the aforementioned

committees to submit complaints

alleging possible violations of Exchange

Rules and/or violations of the Act to the

Regulatory Staff for investigation, but

then prohibiting them from further

participation in the investigation or

proceedings. In this way, the Governors

and committee members continue to

have a voice and the ability to bring

potential violations to the attention of

the Regulatory Staff, but are not given

undue control and influence over the

proceedings to the disadvantage of

Exchange members.

The Commission further finds that the

Exchange’s explicit proposed rule

prohibiting members of the Board of

Governors or the Executive Committee

or other non-Regulatory Staff persons

from interfering with or attempting to

influence any pending investigation or

disciplinary proceeding is appropriate.

The Exchange’s proposed rule

accurately echoes the Commission’s

belief that persons responsible for

investigations and disciplinary

proceedings should enjoy autonomy and

independence from inappropriate

pressures. The Commission further

finds that the PCX’s initiative to

separate the investigatory functions of

the Regulatory Staff from the

commercial interests of Exchange

members is another step toward

ensuring that the PCX disciplinary

process is well insulated and fair to all

participants.

B. Ex Parte Communications

The PCX has proposed a new rule that

defines and prohibits ex parte

communications between disciplinary

committee members, the Board of

Governors, and the parties to a

disciplinary investigation or proceeding.

In the Commission’s view, it is

appropriate for the Exchange to prohibit

ex parte communications between the

disciplinary committees and panels and

the parties or their representatives

during the disciplinary proceedings.

The Commissions also finds that the

boundaries set by the Exchange in

defining the prohibited communications

should help ensure that no party can

unfairly advance his or her position in

an investigation or disciplinary

proceeding through discussion or other

communication outside of the

proceeding’s forum. In addition, the

Commission finds that the parties

subject to the prohibition on ex parte

communications include those who

reasonably would be expected to

participate in a disciplinary proceeding.

The Commission also approves of the

manner in which the Exchange proposes

to handle violations of the prohibition

on ex parte communications. First, the

proposed rule requires complete

disclosure of the communication in the

form of a written memorandum

describing any oral communication and

copies of any written communication

for inclusion in the record of the

investigation or disciplinary proceeding.

The proposed rule then states that the

party responsible for the ex parte

communication will be subject to

disciplinary action. The proposed rule

then grants the disciplinary committee

the authority to demand that the party

who made the ex parte communication,

30468 Federal Register / Vol. 65, No. 92 / Thursday, May 11, 2000 / Notices

21 15 U.S.C. 78s(b)(6). 22 15 U.S.C. 78f(b)(5). 23 15 U.S.C. 78s(b)(2).

or the party who benefited from the

communication, show cause why the

claim, defense or interest of that party

should not be adversely affected by

reason of such ex parte communication,

including but not limited to the entry of

an adverse summary decision. The

Commission finds that the

consequences set out by the Exchange

for violating the prohibition on ex parte

communication are appropriate and

should be an effective deterrent for

committing violations and thus, the

Commission finds that these provisions

are consistent with Section 6(b)(6) of the

Act.21

The Commission further believes that

it is appropriate to recognize certain

circumstances under which ex parte

communications are permissible. The

Exchange’s proposed rule provides that

members of a disciplinary committee or

Exchange Regulatory Staff are not

prohibited from engaging in ex parte

communications when discussing: (1)

The adjudication of the investigation

pursuant to the Minor Rule Plan; (2) the

determination of whether to impose

informal discipline; (3) the

determination of whether to authorize a

complaint or take no further action; or

(4) the determination of whether to

accept an offer of settlement. The

Commission finds that lifting the

general prohibition against ex parte

communications in these situations

should ensure that the disciplinary

process operates efficiently by providing

all persons involved in the settlement

process or the pre-complaint resolution

process with the flexibility to attempt to

dispose of a disciplinary matter without

formal proceedings being initiated.

C. Complaints

As with the proposed rule governing

investigations, the Exchange is

proposing to modify its rule governing

the initiation of formal disciplinary

proceedings following an investigation

to provide that only Exchange

Regulatory Staff and standing

committees designated by the Board of

Governors to review disciplinary

proceedings have the authority to

determine whether there is probable

cause to issue a formal complaint, i.e.,

probable cause for finding that a

violation within the disciplinary

jurisdiction of the Exchange has

occurred and that further proceedings

are warranted. Under the current rule,

both the members of the Board of

Governors and the Executive Committee

have the authority to initiate

disciplinary actions.

The Commission supports the

Exchange’s initiative to provide the

Regulatory Staff and the committee with

jurisdiction over disciplinary

proceedings independent from the

Board of Governors and Executive

Committee. The Commission believes

that this independence will allow the

Exchange to implement a vigorous and

evenhanded enforcement program.

The Exchange is also proposing to add

a section to its rule that would allow the

Exchange to amend its complaint freely

anytime before a Respondent serves his

or her answers thereto. However, the

proposed rule provides that after the

Respondent serves his or her answer,

the Exchange may only amend the

complaint with the consent of the

hearing panel upon a showing of good

cause. The Exchange finds that this

procedure is fair to both parties because

it protects those persons accused of

violating Exchange rules from facing an

unlimited number of new allegations

throughout the disciplinary process,

while also providing the Exchange with

the ability to add new claims. The

Commission believes that this provision

is consistent with both Sections 6(b)(6)

and 6(b)(7) because it enables the

Exchange to bring new actions as

information regarding potential

violations becomes known in a manner

that is fair to the subject of the

complaint. Further, this provision also

limits the Exchange’s ability to delay

proceedings by continually amending

its complaint. After an answer has been

submitted, the Exchange must show

good cause to amend a complaint. This

should ensure that disciplinary

proceedings are completed in a timely

fashion and provides respondents with

a level of certainty as to the allegations

being asserted. Moreover, by having the

hearing panel make a finding of good

cause to amend a complaint, the

Commission believes that inappropriate

and improper amendments should be

prevented. The proposal should protect

respondents from unlimited

amendments which could lead to

uncertain proceedings and undue delays

in the disciplinary process.

Finally, the Commission believes that

this amendment is consistent with

Section 6(b)(5) of the Act 22 because it

permits the Exchange, subject to

specified restrictions, to amend its

complaints to enforce its rules. This

should ensure that members are

disciplined for violations alleged to

have been committed. Thus, the rule

should assist the Exchange in seeking to

prevent fraudulent and manipulative

acts by its members to sufficiently

protect investors and the public interest.

IV. Amendment No. 4

The Commission finds good cause for

approving Amendment No. 4 prior to

the thirtieth day after the date of

publication of notice thereof in the

Federal Register. In Amendment No. 4,

the Exchange added interested PCX staff

members to the category of persons who

are prohibited from engaging in ex parte

communications. The Commission

believes that this addition will provide

extra assurance to those involved in

disciplinary proceedings that the

proceedings will be conducted fairly

and impartially. Additionally, in the

event that an interested PCX staff

member does participate in an ex parte

communication in violation of the

proposed Rule, Amendment No. 4

allows an Exchange disciplinary

committee to demand that the interested

PCX Staff member show cause why the

claim of the PCX should not be

adversely affected because of the ex

parte communication, thus holding the

Exchange to the same level of

responsibility as those persons being

investigated.

Finally, Amendment No. 4 makes

technical non-substantive changes to the

proposal such as moving a commentary

to another location within the

disciplinary rules, and correcting

language to provide for parallel

construction of sentences and clarity.

The Commission finds that the PCX’s

proposed changes in Amendment No. 4

further strengthen and clarify the

proposed rule change and raise no new

regulatory issues. Further, the

Commission believes that Amendment

No. 4 does not significantly alter the

original proposal which was subject to

a full notice and comment period.

Therefore, the Commission finds that

granting accelerated approval to

Amendment No. 4 is appropriate and

consistent with Section 19(b)(2) of the

Act.23

V. Amendment No. 5

The Commission finds good cause for

approving Amendment No. 5 prior to

the thirtieth day after the date of

publication of notice thereof in the

Federal Register. In Amendment No. 5,

the Exchange seeks to adopt language

that would prohibit any member of a

disciplinary committee or a hearing

panel from participating in a proceeding

if that person has a conflict of interest

or bias, or if circumstances otherwise

exist where his or her fairness might

reasonably be questioned. The

Federal Register / Vol. 65, No. 92 / Thursday, May 11, 2000 / Notices 30469

24 15 U.S.C. 78s(b)(2).

25 17 CFR 200.30–3(a)(12).

Commission believes that the addition

of this provision is appropriate in that

it will increase the level of fairness and

impartiality in disciplinary proceedings

and will aid in the dispassionate

application of the disciplinary rules.

The Commission believes that the PCX

has proposed a reasonable standard

under which an adjudicator or

participant in the disciplinary process

must recuse him or herself or may be

disqualified by the Chief Executive

Officer of the PCX.

VI. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning Amendment Nos.

4 and 5, including whether the

proposed amendments are consistent

with the Act. Persons making written

submissions should file six copies

thereof with the Secretary, Securities

and Exchange Commission, 450 Fifth

Street, NW, Washington, DC 20549–

0609. Copies of the submission, all

subsequent amendments, all written

statements with respect to the proposed

amendment that are filed with the

Commission, and all written

communications relating to the

amendment between the Commission

and any person, other than those that

may be withheld from the public in

accordance with the provisions of 5

U.S.C. 552, will be available for

inspection and copying at the

Commission’s Public Reference Room.

Copies of such filing also will be

available for inspection and copying at

the principal office of the PCX.

All submissions should refer to File

No. SR–PCX–99–10 and should be

submitted by June 1, 2000.

VII. Conclusion

For all of the aforementioned reasons,

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.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,24 that the

proposed rule change (SR–PCX–99–10),

as amended, is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.25

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–11805 Filed 5–10–00; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

[Declaration of Economic Injury Disaster

#9H20]

State of New York (and Contiguous

Counties in the State of New Jersey)

New York County and the contiguous

counties of Bronx, Kings, and Queens in

the State of New York, and Bergen and

Hudson Counties in New Jersey

constitute an economic injury disaster

loan area as a result of a water main

break, and subsequent flooding, that

occurred on March 2, 2000. Eligible

small businesses and small agricultural

cooperatives without credit available

elsewhere may file applications for

economic injury assistance as a result of

this disaster until the close of business

on February 5, 2001 at the address listed

below or other locally announced

locations: U.S. Small Business

Administration, Disaster Area 1 Office,

360 Rainbow Blvd, South, 3rd Floor,

Niagara Falls, NY 14303.

The interest rate for eligible small

businesses and small agricultural

cooperatives is 4 percent.

The economic injury number for the

State of New Jersey is 9H2100.

(Catalog of Federal Domestic Assistance

Program No. 59002)

Dated: May 3, 2000.

Aida Alvarez,

Administrator

[FR Doc. 00–11869 Filed 5–10–00; 8:45 am]

BILLING CODE 8025–01–P

TENNESSEE VALLEY AUTHORITY

Addition of Electric Generation for

Peaking and Baseload Capacity at

Greenfield Sites, Haywood County,

Tennessee

AGENCY: Tennessee Valley Authority

(TVA).

ACTION: Issuance of Record of Decision.

SUMMARY: This notice is provided in

accordance with the Council on

Environmental Quality’s regulations (40

CFR parts 1500 to 1508) and TVA’s

procedures implementing the National

Environmental Policy Act. TVA has

decided to adopt the preferred

alternative identified in its Final

Environmental Impact Statement for

Addition of Electric Generation Peaking

and Baseload Capacity at Greenfield

Sites, Haywood County, Tennessee.

The Final Environmental Impact

Statement (FEIS) was made available to

the public on March 16, 2000. A Notice

of Availability (NOA) of the Final EIS

was published by the Environmental

Protection Agency in the Federal

Register on March 31, 2000. Under the

preferred alternative, TVA has decided

to construct natural gas-fired simple

cycle combustion turbine power plants

with up to 1,400 Megawatts (MW) of

capacity at the Lagoon Creek Site. The

construction will occur in two 700 MW

phases.

FOR FURTHER INFORMATION CONTACT: Greg

Askew, Senior Specialist, National

Environmental Policy Act,

Environmental Policy and Planning,

Tennessee Valley Authority, 400 West

Summit Hill Drive, mail stop WT 8C,

Knoxville, Tennessee 37902–1499;

telephone (865) 632–6418 or e-mail

gaskew@tva.gov.

SUPPLEMENTARY INFORMATION:

Background

In December 1995, TVA issued its

Energy 2020 Integrated Resource Plan

and Final Programmatic Environmental

Impact Statement. This document

projected demands for electricity in the

TVA power service area through the

year 2020 and evaluated different ways

of meeting these projected increases.

Under the forecast adopted by TVA, the

demand for electricity was projected to

exceed TVA’s 1996 generating capacity

of 28,000 (MW) by approximately 6,250

MW in the year 2005. TVA decided to

meet this demand through a

combination of supply-side options and

customer service options.

Since 1995, TVA has added about

2,700 MW of generating capacity and

1,400 MW in option-purchase

agreements to meet the increasing

power demand in the Tennessee Valley

(TVA 1999a). Incrementally, the 2,700

MW growth in capacity consists of

operational efficiencies resulting from

capital improvements at existing fossil,

nuclear and hydro power production

facilities, along with additions in

capacity at several locations.

Over the next few years, TVA plans to

further increase capacity by 2,400 MW

through improvements to existing units

and the addition of peaking units at

existing fossil plants. However, these

increases may not be enough to

maintain adequate reserve capacity.

It is reasonable to expect that the

delivery of reliable and economic power

to customers will require TVA to

continue to pursue all of the portfolio

options recommended in Energy Vision

2020, both demand-side and supplyside. Consistent with Energy Vision

2020, from which this EIS tiers, each of

the portfolio options received an

appropriate environmental review

before a decision was made to proceed

with implementation. Those actions are