61014 Federal Register / Vol. 65, No. 199 / Friday, October 13, 2000 / Notices

17 15 U.S.C. 78s(b)(2).

18 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

available for inspection and copying at

the Commission’s Public Reference

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the Association.

All submissions should refer to the File

No. SR–NASD–00–16 and should be

submitted by November 3, 2000.

V. Conclusion

For the reasons discussed above, the

Commission finds that the proposal is

consistent with the Act and the rules

and regulations thereunder.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,17 that the

proposed rule change, SR–NASD–00–

16, as amended, be and hereby is

approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.18

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–26281 Filed 10–12–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43415; File No. SR–PHLX–

00–52]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.

Relating to Review of Decisions of the

Exchange’s Business Conduct

Committee

October 4, 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 August

18, 2000, the Philadelphia Stock

Exchange Inc. (‘‘PHLX’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

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

the proposed rule change as described

in Items I, II, and III below, which Items

have been prepared by the Exchange.

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 Phlx proposes to amend the text

of Phlx Rule 960.9 to incorporate

procedures for the hearing of appeals in

disciplinary matters. Specifically, the

procedures would be divided into four

categories: (a) Petition by Respondent;

(b) Conduct of Review, (c) Review on

Motion by Board of Governors; and (d)

Petition by Enforcement Staff.

First, with respect to petitions by a

Respondent, the proposed rule provides

that a Respondent’s petition for appeal

must be in writing and filed with the

Secretary of the Exchange within 10

days after service of notice and a copy

of the decision of the Business Conduct

Committee, and that it specify the

findings and conclusions that are the

subject of the petition along with the

reasons for review thereof. Exchange

Enforcement Staff will then have 15

days to file a written response, with the

Respondent receiving 15 days after

service of the Enforcement Staff’s

response to file a response thereto.

Second, paragraph (b) of the proposed

rule, ‘‘Conduct of Review,’’ provides

that the review is to be conducted by the

Exchange’s Board of Governors

(‘‘Board’’), or an Advisory Committee

made up of three Governors, with at

least one being a non-industry Governor

appointed by the Chairman of the

Board. No Governor who was a member

of the hearing panel below may

participate in the hearing on review.

The review shall be based solely on the

record below, unless the Board of

Governors or Advisory Committee

hearing the review allows oral argument

after receiving a written request for one.

If an Advisory committee hears the

review, it is to submit a written report

to the Board.

The proposed rule sets forth

guidelines that the Board or an Advisory

committee must follow in making the

decision on review. The decision of the

business Conduct Committee can be

affirmed, reversed or modified, in whole

or in part. A modification may include

an increase or decrease of the sanction.

The findings, conclusions, and decision

of the Business Conduct Committee may

not be reversed, or modified, in whole

or in part, if the factual conclusions in

the decision are supported by

substantial evidence, and such decision

is not arbitrary, capricious or an abuse

of discretion. The Board must serve its

written decision on the petitioner.

Paragraph (c) of the proposed rule

includes procedures for a review by the

Board of Governors on its own

initiative. The review would follow the

previously described procedure.

Finally, paragraph (d) of the proposed

rule sets forth procedures by which the

Exchange’s Enforcement Staff, within 10

days after service of notice and a copy

of the decision of the Business Conduct

Committee, may petition the Board for

permission to appeal, by presenting to

the Board a petition specifying the

findings and conclusions that are

subject of the petition, along with the

reasons the staff is petitioning for

review. Should the Board grant

permission, Exchange Enforcement Staff

shall serve a copy of the petition on the

Respondent within 5 days. Respondent

then has 15 days to file a written

response with the Board, and Exchange

Enforcement Staff then has 15 days to

file a reply.

The proposed rule language follows.

Additions are italicized; deletions are

bracketed.

Rule 960.9. Review

(a) Petition by Respondent. A Respondent

shall have 10 days after service of notice and

a copy of a decision made pursuant to Rules

960.6(c) and 960.8 to appeal such decision to

the Board of Governors in accordance with

By-Law Article XI, Section [11–1] 11–3. Such

petition shall be in writing and shall specify

the findings and conclusions of the Business

Conduct Committee which is the subject of

the petition, together with the reasons that

Respondent petitions for review of these

findings and conclusions. Any objections to

a decision not specified in the petition for

review shall be thereafter waived. Within 15

days after a Respondent’s petition for review

has been filed with the Secretary of the

Exchange pursuant By-Law Article XI,

Section 11–1(a), Enforcement staff may

submit to the Secretary a written response to

the petition. A copy of the response must be

served upon the Respondent. A Respondent

has 15 days from the service of the response

to file a reply with the Secretary and the

Enforcement staff.

(b) Conduct of Review.

(i) The review shall be conducted by the

Board of Governors or an Advisory

Committee thereof pursuant to By-Law

Article XI, Section 11–3. If an Advisory

Committee is appointed to conduct the

review, it shall be composed pursuant to ByLaw Article XI, Section 11–2. Any Board

member who participated in a matter before

the Business Conduct Committed may not

participate in any review of that matter by

the Board of Governors or an Advisory

Committee. Unless the Board of Governors or

the Advisory Committee shall decide to hear

oral argument, such review shall be based

solely upon the record and the written

exceptions filed by the parties. The review

shall be heard as soon as practicable.

(ii) Should the Board of Governors conduct

the review, then based upon such review, the

Board of Governors by a majority vote of its

members, shall decide to affirm, reverse or

modify, in whole or in part the decision of

the Business Conduct Committee. Such

modification may include any increase or

decrease of the sanction. The Board of

Governors may not reverse, or modify, in

whole or in part, the findings, conclusions

and decision of the Business Conduct

Committee if the factual conclusions in the

decision are supported by substantial

evidence and such decision is not arbitrary,

capricious or an abuse of discretion. The

decision of the Board shall be in writing,

Federal Register / Vol. 65, No. 199 / Friday, October 13, 2000 / Notices 61015

shall be promptly served on the Respondent

in accordance with Rule 960.11, and shall be

final and conclusive subject to Rule 960.9(c)

and (d), as well as the provisions of the

Securities Exchange Act of 1934.

(iii) Should the review be conducted by an

Advisory Committee, the Advisory

Committee shall submit a written report to

the Board of Governors. In such report, the

Advisory Committed shall recommend to

affirm, reverse or modify, in whole or in part,

the decision of the Business Conduct

Committee. Such modification may include

an increase or decrease of the sanction. The

Advisory Committee may not reverse, or

modify, in whole or in part, the findings,

conclusions or decision of the Business

Conduct Committee if the factual conclusions

in the decision are supported by substantial

evidence and such decision is not arbitrary,

capricious or an abuse of discretion. The

Board of Governors by a majority vote of its

members, shall decide to affirm, reject or

modify, in whole or in part the

recommendations of the Advisory

Committee. Such modification may include

an increase or decrease of the sanction. The

Board of Governors may not reverse, or

modify, in whole or in part, the findings,

conclusions and decision of the Advisory

Committee if the factual conclusions in the

decision are supported by substantial

evidence and such decision is not arbitrary,

capricious or an abuse of discretion. The

decision of the Board shall be in writing,

shall be promptly served on the Respondent

in accordance with Rule 960.11, and shall be

final and conclusive subject to Rule 960.9(c)

and (d), as well as to the provisions of the

Securities Exchange Act of 1934.

(c) Review on Motion of Board Governors.

The Board of Governors may on its own

initiative order review of a decision made

pursuant to rules 960.6(c) or 960.8 within 20

days after notice of the decision has been

served on the Respondent. Such review shall

be conducted in accordance with the

procedure set forth in paragraph (b) of this

Rule. Should the Board of Governors vote to

disapprove this modification or reversal, the

Board shall make its own findings and issue

a final decision of the Exchange. An Advisory

Committee appointed by the Board of

Governors may conduct such a review

pursuant to By-Law Article XI, Section 11–3

and in accordance with the provisions of

Rule 960.9.

(d) Petition by Enforcement Staff. An

appeal of a decision made pursuant to Rules

960.6(c) or 960.8 may also be taken by the

Enforcement staff by petitioning the Board of

Governors, within 10 days after service of

notice and a copy of a decision, for

permission to proceed with such appeal in

accordance with By-Law Article XI, Section

11–3. Such petition shall be in writing and

shall specify the findings and conclusions of

the Business Conduct Committee which are

the subject of the petition, together with the

reasons that Enforcement staff petitions for

review of these findings and conclusions.

Any objections to a decision not specified in

the petition for review shall be thereafter

waived. If permission to appeal is granted,

staff shall serve a copy of the petition on the

Respondent within five days of permission to

appeal being granted. Within 15 days

Respondent may submit to the Board of

Governors a written response to the petition.

A copy of the response must be served upon

the Exchange’s Enforcement staff, who then

has 15 days from the service of the response

to file a reply with the Board of Governors

and the Respondent.

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 test of these

statements may be examined at the

places specified in Item IV below. The

Exchange 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 Exchange proposes to adopt

specific procedures for the hearing of

appeals of decisions rendered by the

Exchange’s Business Conduct

Committee pursuant to Phlx Rules

960.6(c) and 960.8 to ensure that

appeals of disciplinary matters are

accomplished in a consistent and

orderly fashion.

(a) Background

Currently, Phlx Rule 960.9 states that

a Respondent has 10 days after service

of notice and a copy of the decision of

the Business Conduct Committee within

which to request an appeal to the

Exchange Board of Governors pursuant

to Exchange By-law Article XI, Section

11–1. Exchange By-law Article XI,

Section 11–1 states that an appeal to the

Board of Governors may be taken from

a decision of a Standing Committee by

a member or member organization

interested therein by filing a written

notice of appeal with the Secretary of

the Exchange within 10 days after the

decision has been rendered. Section 11–

2 states that an appeal to the Exchange

Board of Governors from a decision of

a Standing Committee shall be heard by

an Advisory Committee of three

Governors, with at least one being a

non-industry Governor appointed by the

Chairman of the Board, and that the

Advisory Committee shall examine the

record on appeal and give an advisory

opinion to the Board of Governors.

Section 11–3 specifically addresses

appeals from decisions of the Business

Conduct Committee. Sub-section (a) of

Section 11–3 reiterates the Respondent’s

right to appeal as previously stated in

Section 11–1 (a); however, it also allows

for Exchange staff to petition the Board

of Governors within 10 days after the

decision, for permission to appeal. Subsection (b) of Section 11–3 dictates that

the appeal shall be based on the written

record; however, it gives the parties the

right to request oral argument before the

Board of Governors or the Advisory

Committee.

(b) Proposal

The proposed revisions to Phlx Rule

960.9 have been developed to apply to

disciplinary matters, which have unique

issues. The procedures currently

encompassed in Exchange by-laws were

not formulated strictly for disciplinary

matters, and, as a result, were often

silent to those unique issues. The

proposed revisions to Phlx Rule 960.9

set forth detailed procedures for hearing

of an appeal from a Business Conduct

Committee decision.

The proposed amendment to subparagraph (a) of Phlx Rule 960.9 states

that the Respondent’s petition for

appeal must be in writing and filed with

the Secretary of the Exchange within 10

days after service of notice and a copy

of the decision of the Business Conduct

Committee. The petition must specify

the findings and conclusions that are

the subject of the petition, along with

the reasons the Respondent is

petitioning for review. Exchange

Enforcement Staff will have 15 days

after a Respondent files its petition to

file a written response. The Respondent

may file a reply within 15 days after

service of the Enforcement Staff’s

response. These provisions are intended

to provide time guidelines for

requesting an appeal.

Sub-paragraph (b)(i) of the proposed

rule provides that the review shall be

conducted by the Exchange’s Board of

Governors, or an Advisory Committee

made up of three Governors, with at

least one being a non-industry Governor

appointed by the Chairman of the

Board. No Governor who was a member

of the hearing panel below may

participate in the hearing on review.

This is intended to establish who hears

the appeal.

Unless the Board of Governors or

Advisory Committee hearing the review

allows oral argument, the review shall

be based solely on the record below. If

an Advisory Committee hears the

review, it shall submit a written report

to the Board. Sub-paragraphs (b)(ii) and

(iii) of the proposed rule set forth the

guidelines that the Board or an Advisory

61016 Federal Register / Vol. 65, No. 199 / Friday, October 13, 2000 / Notices

3Review of appeals initiated by the Exchange’s

Enforcement staff will be conducted in accordance

with the procedure set forth in paragraph (b) of the

proposed rule. Telephone conversation between

Charles Falgie, Director of Enforcement, Phlx, and

Anitra Cassas, Attorney, Division of Market

Regulation, Commission, on October 3, 2000.

4 15 U.S.C. 78f(b).

5 15 U.S.C. 78f(b) and 15 U.S.C. 78f(b)(7). 6 17 CFR 200.30–3(a)(12).

Committee must follow in making the

decision on review. The Board in its

decision, or the Advisory Committee in

its report to the Board, shall affirm,

reverse or modify, in whole or in part,

the decision of the Business Conduct

Committee. A modification may include

an increase or decrease of the sanction.

However, neither the Board nor the

Advisory Committee reverse, or modify,

in whole or in part, the findings,

conclusions, and decision of the

Business Conduct Committee, if the

factual conclusions in the decision are

supported by substantial evidence, and

such decision is not arbitrary,

capricious or an abuse of discretion. A

written decision of the Board must be

served on the petitioner.

The proposed rule change also

includes procedures for a review by the

Board of Governors on its own initiative

in sub-paragraph (c). The review would

follow the procedure set forth in subparagraph (b) of the proposed rule.

Together, these provisions are intended

to establish a standard and process of

review.

Finally, sub-paragraph (d) of the

proposed rule sets forth the procedures

by which the Exchange’s Enforcement

staff, within 10 days after service of

notice and a copy of the decision of the

Business Conduct Committee, may

petition the Board for permission to

appeal. The petition must specify the

findings and conclusions that are

subject to the petition, along with the

reasons for review thereof. If permission

is granted, the staff must serve a copy

of the petition on the Respondent

within 5 days. Respondent then has 15

days to file a written response with the

Board, and the staff would have 15 days

of service of the Respondent’s initial

response to file a reply. This paragraph

is intended to expressly cover staff

appeals.3

The Exchange believes that the

proposed revisions, which have been

developed specifically for issues unique

to disciplinary matters, should facilitate

appeals being processed in a

systematical fashion. Furthermore, the

Exchange believes that the proposed

rule should promote an objective,

consistent appeals procedure for both

members of the Exchange and for the

Exchange’s Enforcement Staff. The

provisions should also prevent undue

delay, and any inconvenience that

affects the parties as a direct result of

such a delay. Finally, the proposed

revisions will provide the Board of the

Advisory Committee with a precise

procedure to apply to such a hearing.

2. Statutory Basis

The Exchange believes that the

proposed rule change is consistent with

Section 6 of the Act,4 in general, and

Sections 6(b)(6) and 6(b)(7),5 in

particular, in that it is designed to

ensure that Exchange members and

persons associated with members are

appropriately disciplined for violations

of the provisions of the Act, the rules

and regulations thereunder, or the rules

of the Exchange, as well as providing a

fair procedure for the disciplining of

Exchange members and persons

associated with members.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any inappropriate burden on

competition.

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 written comments on the

proposed rule change.

III. Date of Effectiveness of the

Proposed Rule Change an Timing for

Commission Action

Within 35 days of the 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 Exchange consents, the

Commission will:

(A) By order approve the 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 proposal is

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

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 at

the Commission’s Public Reference

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the PHLX. All

submissions should refer to File No.

SR–PHLX–00–52 and should be

submitted by November 3, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–26280 Filed 10–12–00; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

Data Collection Available for Public

Comments and Recommendations

ACTION: Notice and request for

comments.

SUMMARY: In accordance with the

Paperwork Reduction Act of 1995, this

notice announces the Small Business

Administration’s intentions to request

approval on a new, and/or currently

approved information collection.

DATES: Submit comments on or before

December 12, 2000.

ADDRESSES: Send all comments

regarding whether this information

collection is necessary for the proper

performance of the function of the

agency, whether the burden estimate is

accurate, and if there are ways to

minimize the estimated burden and

enhance the quality of the collection, to

Delorice P. Ford, Associate

Administrator/BD, Office of Business

Development, Office of Government

Contracting and Business Development,

Small Business Administration, 409 3rd

Street, SW., Suite 8000.

FOR FURTHER INFORMATION CONTACT:

Delorice P. Ford, Associate

Administrator/BD, 202–205–5852 or

Curtis B. Rich, Management Analyst,

(202) 205–7030.

SUPPLEMENTARY INFORMATION:

Title: Small Disadvantaged

Business(SDB) Recertification

Application.

Form No.: 2179