Federal Register / Vol. 62, No. 218 / Wednesday, November 12, 1997 / Notices 60739

10 15 U.S.C. 78f(b)(5).

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

12 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1)(1994). 2 15 U.S.C. 78aaa–78111(1994).

necessary in the interests of a fair and

orderly market.

Specifically, the Commission believes

that it is reasonable to declare a trading

halt in a particular security for a period

exceeding two consecutive business

days without requiring the specific

approval of a majority of the Exchange’s

Board. The Commission recognizes that

it may be impractical to convene the

Board each time a determination must

be made as to whether to extend a

trading halt in a particular security

beyond two consecutive business days.

The Commission notes that in

eliminating the Board’s participation in

the decisionmaking process, the

proposed rule change, as amended, does

not provide unbridled discretion to the

Exchange’s Floor Officials to declare a

trading halt of such duration. Instead,

the Commission notes that the proposal,

as amended, requires two procedures

which the Commission believes will

provide some assurances that a decision

to halt trading in a security for longer

than two consecutive business days will

receive proper consideration. First, the

Commission believes that the

involvement of a senior Exchange

official should ensure that the interests

of all market participants are carefully

considered in determining the propriety

of a trading halt. Second, the review of

each trading halt declared exceeding

two consecutive business days by the

Exchange’s Floor Officials Committee

should ensure that the CBOE’s

management structure remains apprised

of the manner in which the proposed

rules are applied. In the event that the

Exchange’s Floor Officials Committee

determines that the rules are not being

applied in an even-handed and fair

manner, the Commission expects the

Exchange to reevaluate the process and

propose changes, as necessary.

The Commission finds good cause for

approving proposed Amendment No. 1

prior to the thirtieth day after the date

of publication of notice of filing thereof

in the Federal Register. The

Commission notes that Amendment No.

1 further clarifies the process by which

a determination is made to halt trading

in a particular security for more than

two consecutive business days. The

Commission believes that requiring the

consultation of a senior Exchange

official and review by the Exchange’s

Floor Officials Committee clarifies the

discretion granted to Floor Officials

with respect to trading halts and raises

no new regulatory issues. Accordingly,

the Commission believes that it is

consistent with Section 6(b)(5) of the

Act 10 to approve Amendment No. 1 to

CBOE’s proposed rule change on an

accelerated basis.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning Amendment No.

1. Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 20549. 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

Section, 450 Fifth Street, NW.,

Washington, DC 20549. Copies of all

such filings will also be available for

inspection and copying at the principal

office of CBOE. All submissions should

refer to File No. SR–CBOE–97–35 and

should be submitted by December 3,

1997.

V. Conclusion

It Is Therefore Ordered, pursuant to

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

proposed rule change (SR–CBOE–97–

35), including Amendment No. 1, is

approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.12

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–29700 Filed 11–10–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39295; File No. SR–PCX–

97–38]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Pacific Exchange, Inc. Relating to

Charges and Recommended Fines for

Late SIPC Reports

November 4, 1997.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’) 1, notice is hereby given that on

October 14, 1997, the Pacific Exchange,

Inc. (‘‘PCX’’ or ‘‘Exchange’’) filed with

the Securities and Exchange

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

the proposed rule change as described

in Items, I II and III below, which Items

have been prepared by the PCX. The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Exchange is proposing to modify

the late charges and recommended fines

applicable to members’ late filing of

forms and assessments with the

Exchange pursuant to the Securities

Investor Protection Act of 1970

(‘‘SIPA’’).2 The text of the proposed rule

change is below. Additions are

italicized; deletions are bracketed.

Text of the Proposed Rule Change

Financial Reports

¶3405

Rule 2.12(a)—(b)(1)—No change.

Rule 2.12(b)(2). Each member

organization for which the Exchange is

the designated collection agent must

[shall] file with the Exchange such

forms and assessments as are required

pursuant to the Securities Investor

Protection Act of 1970. Any member

organization that fails to file such form

or assessment in a timely manner will

[shall] be subject to a late filing charge

as follows:

Number of days late Amount of charge

1–30 ................................ [$200] $100

31–60 .............................. [400] 200

61–90 .............................. [800] 300

Provided however: (A) If a member

organization files its SIPC form and

assessment after its receipt of SIPC’s

final late notice, but files within five

business days after its receipt of SIPC’s

final late notice, such member

organization will [shall] be subject to a

fine pursuant to Rule 10.13; and (B) if

a member organization fails to file its

SIPC form and assessment within five

business days after its receipt of SIPC’s

final late notice, such member

organization will [shall] be subject to

formal disciplinary action pursuant to

Rule 10.3.

Commentary:

.01–.02—No change.

* * * * *
60740 Federal Register / Vol. 62, No. 218 / Wednesday, November 12, 1997 / Notices

3PCX rule 10.13(j)(2).

4PCX Rule 10.13(k)(iii)(2).

5Securities Exchange Act Release No. 32510

(June 24, 1993) 58 FR 35491 (July 1, 1993) (order

approving File No. SR–PSE–92–15).

6Securities Exchange Act Release Nos. 33347

(December 15, 1993) 58 FR 67888 (December 22,

1993) (order approving File No. SR–PSE–93–

21)(adopting late charges); and 32510 (June 24,

1993) 58 FR 35491 (July 1, 1993) (order approving

File No. SR–PSE–92–15)(amending the Exchange’s

Minor Rule Plan and adopting recommended fines).

7 15 U.S.C. 78s(b)(3)(A)(ii) (1994).

8 17 CFR 240.19b–4(e)(2) (1997).

9 17 CFR 200.30–3(a)(12) (1997).

Minor Rule Plan

¶6133

Rule 10.13(a)—(j)—No change.

(k) Minor Rule Plan: Recommended

Fine Schedule

(i)–(ii)—No change.

(iii) Record Keeping and Other Minor

Rule Violations

1. No change.

2. Failure to file a Securities Investors

Protection Corporation form and

assessment in a timely manner. (Rule

2.12(b))

[$1,200.00] [$1,800.00] [$2,400.00]

$500 $1,000 $1,500

3.–6. No change.

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

Exchange 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

PCX 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

(a) Purpose

PCX Rule 2.12(b)(2) provides that

each member organization is required to

file with the Exchange such forms and

assessments as are required pursuant to

SIPA. Rule 2.12(b)(2) further provides

that any member organization that fails

to file such form or assessment will be

subject to a late charge of $200 if 1–30

days late; $400 if 31–60 days late; and

$800 if 61–90 days late. The Exchange

is proposing to reduce these charges to

$100, $200 and $300, respectively.

PCX Rule 2.12(b)(2) further provides

that, if a member organization files its

form and assessment after its receipt of

the final late notice from the Securities

Investor Protection Corporation

(‘‘SIPC’’), but files within five business

days after its receipt of SIPC’s final late

notice, such member organization will

be subject to a fine pursuant to the

Exchange’s Minor Rule Plan.3 The

current recommended fines for such

violations are $1,200 for a first violation,

$1,800 for a second violation and $2,400

for a third violation.4 The Exchange is

proposing to reduce these recommended

fines to $500, $1,000 and $1,500 for

first, second and third violations,

respectively.

(b) Basis

The Exchange believes that the

proposal is consistent with Section 6(b)

of the Act, in general, and Section

6(b)(5) of the Act, in particular, in that

it is designed to promote just and

equitable principles of trade and to

protect investors and the public interest.

The Exchange notes that the amounts of

the charges and fines were originally

based upon proposed fines and charges

for late FOCUS Reports.5 However, after

reconsidering the levels of these fines,

the Exchange believes that the filing of

late FOCUS reports raises more serious

investor protection concerns and

warrants a higher fine than the filing of

late SIPC reports.

The Exchange also believes that the

proposal is consistent with Section

6(b)(4) in that it provides for the

equitable allocation of reasonable

charges among its members and it is

consistent with Section 6(b)(7) in that it

provides a fair procedure for the

disciplining of members. The late

charges and fines applicable to late SIPC

reports were adopted originally in 1992

and 1993, respectively.6 Since that time,

the Exchange has reconsidered the

levels of these recommended fines and

has determined that the penalties are

too severe for the violations at issue.

The Exchange notes that SIPC has

determined, for the years 1996 and

1997, to assess all of its members a flat

minimum assessment of $150 (rather

than a percentage of net revenues). In

that regard, the Exchange believes that

a reduction in charges and

recommended fines for lateness is

warranted.

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

Written comments on the proposed

rule change were neither solicited nor

received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The proposed rule change establishes

or changes a due, fee, or other charge

imposed by the Exchange and therefore,

has become effective on October 14,

1997, pursuant to Section

19(b)(3)(A)(ii) 7 of the Act and Rule 19b–

4(e)(2) 8 thereunder. At any time within

60 days of the filing of such proposed

rule change, the Commission may

summarily abrogate such rule change if

it appears to the Commission that such

action is necessary or appropriate in the

public interest, for the protection of

investors, or otherwise in furtherance of

the purposes of the Act.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning the foregoing.

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. 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, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such

filing will also be available for copying

at the principal office of the PCX. All

submissions should refer to File No.

SR–PCX–97–38 and should be

submitted by December 3, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H.McFarland,

Deputy Secretary.

[FR Doc. 97–29747 Filed 11–10–97; 8:45 am]

BILLING CODE 8010–01–M