Federal Register / Vol. 65, No. 230 / Wednesday, November 29, 2000 / Notices 71193

4Review 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, Special Counsel, Division of Market

Regulation, Commission, on October 3, 2000.

5 15 U.S.C. 78f(b)(6) and (b)(7).

6 17 CFR 200.30–3(a)(12).

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

2 17 U.S.C. 240.19b–4.

proceedings by the Exchange’s Business

Conduct Committee pursuant to Phlx

Rules 960.6(c) and 960.8. Currently,

decisions made in disciplinary

proceedings are appealed in accordance

with Phlx By-Law Article XI. The

procedures set forth in the Phlx’s ByLaws, however, were not strictly

formulated for disciplinary matters, and,

as a result, are often silent on unique

issues that apply to disciplinary matters.

To ensure that appeals in disciplinary

proceedings are accomplished in a

consistent and orderly manner, the

Exchange expanded the procedures in

Phlx Rule 960.9 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.

The proposed amendment to

paragraph (a) of Phlx Rule 960.9 is

intended to provide time guidelines for

requesting an appeal. 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 to file a written response. The

Respondent may then file a reply within

15 days after service of the Enforcement

Staff’s response.

Paragraph (b) of the proposed rule,

‘‘Conduct of Review,’’ provides that the

review shall 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.

Unless the Board of Governors or

Advisory Committee hearing the review

allows oral argument, the review will be

based solely on the record below. If an

Advisory Committee hears the review, it

must submit a written report to the

Board.

Sub-paragraphs (b)(ii) and (iii) of the

proposed rule set forth the standard of

review for the Board or Advisory

Committee. 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.

However, neither the Board nor the

Advisory Committee may reverse or

modify 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.

In paragraph (c), the proposed rule

change includes procedures for a review

by the Board of Governors on its own

initiative. The review would follow the

procedure set forth in paragraph (b) of

the proposed rule. Together, these

provisions are intended to establish a

standard and process of review.

Finally, paragraph (d) of the proposed

rule sets forth the procedures by which

the Exchange’s Enforcement staff may

petition the Board for permission to

appeal. The petition must specify the

findings and conclusions that are the

subject of the petition, along with the

reasons the staff is petitioning for

review. If the Board grants permission,

the Exchange’s Enforcement staff must

serve a copy of the petition on the

Respondent within 5 days. The

respondent then has 15 days to file a

written response with the Board, and

the staff would have 15 days to file a

reply.4

II. Discussion

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 and, in particular, with the

requirements of Sections 6(b)(6) and

6(b)(7).5 Section 6(b)(6) requires that

members and persons associated with

members be appropriately disciplined

for violation of any provision of the Act,

the rules and regulations thereunder, or

the rules of the Exchange. Section

6(b)(7) of the Act requires, among other

things, that the rules of the Exchange

provide a fair procedure for the

disciplining of members and persons

associated with the members.

Currently, the Phlx does not have

detailed procedures for appeals from

decisions in summary and regular

disciplinary proceedings. The

Commission believes that the proposed

procedures in Phlx Rule 960.9 could

provide for a more appropriate and fair

disciplinary procedure. For example,

paragraphs (b) and (c) of revised Rule

960.9 set forth a standard of review the

Board of Governors or the Advisory

Committee must follow in deciding

whether to affirm, reverse or modify the

decision of the Business Conduct

Committee. The Commission believes

that explicit standards will help ensure

that decisions in disciplinary

proceedings are not rendered arbitrarily.

The Commission also believes that the

clear time guidelines set forth in

paragraphs (a), (c), and (d) enhance the

fairness of the disciplinary procedure.

Currently, Phlx Rule 960.9 only dictates

the time a respondent has to file an

appeal. Under the proposal, the

expanded procedures in Rule 960.0

layout the timetable for responses and

replies to be filed. Thus, respondents

and the Exchange’s Enforcement staff

will not be subjected to unnecessary

delays. The Commission believes this is

a more fair procedure because it brings

a measure of finality to disciplinary

proceedings.

III. Conclusion

It is therefore ordered, pursuant to

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

proposed rule change (SR–PHLX–00–

52) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30382 Filed 11–28–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43585; File No. SR–Phlx–

00–98]

Self-Regulatory Organizations; Notice

of Filing of Proposed By-Law Change

by the Philadelphia Stock Exchange,

Inc., Relating to Allocation, Evaluation

and Securities Committee

November 17, 2000.

Pursuant to Section 10(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’) 1 and Rule 19b–4 2 thereunder,

notice is hereby given that on November

7, 2000, the Philadelphia Stock

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

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed by-law 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 by-law change from interested

persons.

71194 Federal Register / Vol. 65, No. 230 / Wednesday, November 29, 2000 / Notices

3See Securities Exchange Act Release No. 43011

(July 5, 2000), 65 FR 43069 (July 12, 2000) (File No.

SR–Phlx–00–28).

4 15 U.S.C. 78f.

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

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Phlx proposes to amend its ByLaw, Article X, Section 10–7—Options

Allocation, Evaluation and Securities

Committee and Equity Allocation,

Evaluation and Securities Committee.

The proposed amendment would clarify

that references to the ‘‘Allocation,

Evaluation and Securities Committee’’

in the Exchange By-Laws and Rules may

mean either the Options Allocation,

Evaluation and Securities Committee or

the Equity Allocation, Evaluation and

Securities Committee, as the context

requires. The text of the proposed bylaw change is set forth below. New

language is in italics.

Article X, Section 10–7(e)

For purposes of these By-Laws, and

Exchange Rules, references to the

‘‘Allocation, Evaluation and Securities

Committee’’ shall mean either the

Options Allocation, Evaluation and

Securities Committee or the Equity

Allocation, Evaluation and Securities

Committee, as the context requires.

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

Phlx included statements concerning

the purpose of and basis for the

proposed by-law change and discussed

any comments it received on the

proposed by-law change. The text of

these statements may be examined at

the places specified in Item IV below.

The Phlx 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

On July 5, 2000, the Commission

approved changes to Phlx By-Law

Article X, Section 10–7, which divided

the Allocation, Evaluation and

Securities Committee into two separate

committees: The Options Allocation,

Evaluation and Securities Committee

and the Equity Allocation, Evaluation

and Securities Committee.3 Currently,

various sections of the Exchange’s bylaws and rules simply refer to the

‘‘Allocation, Evaluation and Securities

Committee.’’ The proposed amendment

to Article X, Section 10–7(e) of the

Phlx’s by-laws would provide that any

reference to the ‘‘Allocation, Evaluation

and Securities Committee’’ would mean

either the Options Allocation,

Evaluation and Securities Committee or

the Equity Allocation, Evaluation and

Securities Committee, as the context

requires.

The purpose of the proposed by-law

amendment is to clarify that references

to the ‘‘Allocation, Evaluation and

Securities Committee’’ in the

Exchange’s by-laws and rules may mean

either the Options Allocation,

Evaluation and Securities Committee or

the Equity Allocation, Evaluation and

Securities Committee, as the context

requires, and to ensure that the by-laws

and rules pertaining to each committee

remain consistent.

2. Statutory Basis

The Phlx believes the proposed rule

change is consistent with Section 6 of

the Act 4 in general and with Section

6(b)(5) 5 in particular, in that it is

designed to promote just and equitable

principles of trade and to protect

investors and the public interest by

enabling the Exchange to provide a

responsive administrative process with

respect to the operation of the Options

Allocation, Evaluation and Securities

Committee and the Equity Allocation,

Evaluation and Securities Committee,

consistent with the Exchange’s by-laws

and rules.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Phlx does not believe that the

proposed by-law change would 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

No written comments were solicited

or received.

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 with 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 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 by-law

change 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 by-law

change that are filed with the

Commission, and all written

communications relating to the

proposed by-law 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 filings will also be

available for inspection and copying at

the principal office of the Phlx. All

submissions should refer to File No.

SR–Phlx–00–98 and should be

submitted by December 20, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30383 Filed 11–28–00; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

Reporting and Recordkeeping

Requirements Under OMB Review

AGENCY: Small Business Administration.

ACTION: Notice of Reporting

Requirements Submitted for OMB

Review.

SUMMARY: Under the provisions of the

Paperwork Reduction Act (44 U.S.C.

Chapter 35), agencies are required to

submit proposed reporting and

recordkeeping requirements to OMB for

review and approval, and to publish a

notice in the Federal Register notifying

the public that the agency has made

such a submission.

DATES: Submit comments on or before

December 29, 2000. If you intend to

comment but cannot prepare comments