[Federal Register Volume 65, Number 122 (Friday, June 23, 2000)]
[Notices]
[Pages 39215-39216]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-15902]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42951; File No. SR-BSE-99-07]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Boston Stock Exchange, Inc. Amending its Minor Rule 
Violation Plan

June 16, 2000.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 1, 1999, the Boston Stock Exchange, Inc. (``BSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. On March 
24, 2000, the BSE submitted Amendment No. 1 to the proposed rule 
change.\3\ On May 30, 2000, the BSE submitted Amendment No. 2 to the 
proposed rule change.\4\ The Commission is publishing this notice to 
solicit

[[Page 39216]]

comments on the proposed rule change form interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the BSE proposes to incorporate the 
BSE's Minor Rule Violation Plan into the Boston Stock Exchange 
Guide, which is its rulebook. See letter with enclosures from 
William P. Cummings, Manager of Legal and Regulation, BSE, to 
Richard Strasser, Assistant Director, Division of Market Regulation 
(``Division''), Commission, dated March 12, 2000 (``Amendment No. 
1'').
    \4\ In Amendment No. 2, the BSE seeks to amend the Summary Fine 
Schedule of the Minor Rule Violation Plan to prohibit all forms of 
tobacco use. See letter with enclosures from John A. Boese, 
Assistant Vice President, Rule Development and Market Structure, 
BSE, to Richard Strasser, Assistant Director, Division, Commission, 
dated May 26, 2000 (``Amendment No. 2'').
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The BSE seeks to amend the Summary Fine Schedule of the Minor Rule 
Violation Plan by adding the violation of ``Failure to Attend Mandatory 
BEACON Training Sessions'' and amending the prohibition titled 
``Violation of the Exchange Smoking Policy'' to prohibit all forms of 
tobacco use. In addition, the Exchange proposes to incorporate the 
BSE's Minor Rule Violation Plan into the Boston Stock Exchange Guide, 
which is its rulebook.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the BSE included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The BSE has prepared summaries, set forth in Sections A, 
B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The BSE proposes to amend the Exchange's Minor Rule Violation Plan 
to include the failure to attend Market Performance Committee BEACON 
training sessions and to change the prohibition titled ``Violation of 
the Exchange Smoking Policy'' to prohibit all forms of tobacco use. The 
proposed addition to the Summary Fine Schedule will enable the Exchange 
to ensure that all floor members are fully trained on the BEACON system 
following enhancements for the handling of orders or the release of new 
versions of BEACON software. The Exchange believes that this will 
ensure that all customer orders are accorded the same professional 
attention by all specialists. The Exchange proposes a written warning 
for an initial offense, a $50 fine for the second offense, and a $100 
fine for subsequent offenses. In addition, the Exchange proposes to 
prohibit all forms of tobacco use on the Equity Trading Floor. 
Currently, only smoking is prohibited.
    The Exchange also proposes to incorporate the BSE's Minor Rule 
Violation Plan into the Boston Stock Exchange Guide, which is its 
rulebook. The Plan provides an alternative method for the Exchange to 
use to discipline members who commit minor rule violations.
2. Statutory Basis
    The BSE believes the proposed rule change is consistent with 
Section 6(b)(5) \5\ of the Act in that it is designed to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities; and is not designed to permit 
unfair discrimination between customers, issuers, brokers or dealers. 
In addition, the Exchange believes that the proposal is consistent with 
Section 6(b)(6) \6\ of the Act, which requires that its members and 
persons associated with its members be appropriately disciplined for 
violations of the rules of the exchange.\7\
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    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 15 U.S.C. 78f(b)(6).
    \7\ The Exchange added this statutory basis for the proposed 
rule change on June 5, 2000. Telephone conversation between John A. 
Boese, Assistant Vice President, Rule Development and Market 
Structure, BSE, and Joseph Corcoran, Attorney, Division, Commission, 
on June 5, 2000.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) by order approve such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
is consistent with the Act. Persons making written submissions should 
file six copies thereof with the Secretary, Securities and Exchange 
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549-0609. Copies 
of the submission, all subsequent amendments, all written statements 
with respect to the proposed rule change that are filed with the 
Commission, and all written communications relating to the proposed 
rule change 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 in the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
BSE. All submissions should refer to File No. SR-BSE-99-07 and should 
be submitted by July 14, 2000.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-15902 Filed 6-22-00; 8:45 am]
BILLING CODE 8010-01-M