Federal Register / Vol. 60, No. 19 / Monday, January 30, 1995 / Notices 5743

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

changes are proposed to the renumbered

rule.

Rule 18.25, Interpretation of the Code

and Enforcement of Arbitrator Rulings

Consistent with the Uniform Code,

the Exchange proposes to amend Rule

18.25 in order to clarify and codify the

arbitrators’ existing authority to enforce

the rulings in the event of noncompliance by a party. Appropriate

arbitral action under this provision

could include the assessment of fees or

costs, preclusion of documents or

witnesses, or initiation of a disciplinary

referral. Currently, such sanctions for

non-compliance with the arbitrator’s

rulings are infrequently ordered or

requested because the arbitrators and

parties may be unaware of an

arbitrator’s power. It is expected that the

arbitrators will exercise such power

primarily in the area of failure to

comply with discovery requests. As

amended, Rule 18.25 will specify that

such arbitral rulings, as well as

interpretations of the Uniform Code,

will be final and binding upon the

parties.

Rule 18.29, Amendments

Currently, Rule 18.29 requires the

Director of Arbitration to serve amended

pleadings. Consistent with the Uniform

Code and existing policy and

procedures under Rules 18.4 and 18.15

that require the parties to serve

pleadings after the initial service of the

Statement of Claim by the Director of

Arbitration, the Exchange proposes to

amend this Rule to require that parties

directly serve all other parties with any

new or amended pleading.

Concurrently, the Rule will require

filing of the new or amended pleading

with the Director of Arbitration, along

with sufficient copies for the panel of

arbitrators. Similarly, the Rule will

require that parties directly serve any

responsive pleadings on all other parties

and the Director of Arbitration. As

amended, the Rule will conserve arbitral

administrative time and expenses.

Rule 18.31, Awards

Consistent with the Uniform Code,

the Exchange is proposing to amend

paragraph (e) to Rule 18.31 and adopt

new paragraph (h). Exchange Rule

18.31(e) currently requires that an

arbitration award include the name of

the parties, a summary of the issues, the

relief awarded, the names of the

arbitrators, the date the claim was filed

and the award rendered, the number

and dates of hearing sessions, the

location of the hearing and the

signatures of the arbitrators concurring

in the award. In order to conform this

Rule with the Uniform Code, the

Exchange proposes to amend Rule

18.31(e) to require that an award also

include: the names of counsel

representing the parties, the type of

product or security involved, the

damages and/or other relief requested,

and a statement of any other issues

resolved.

New paragraph 18.31(h) will specify

when interest is payable on an award.

Currently, arbitrators may award

interest as they deem appropriate. As

amended, the Rule will provide that all

awards shall bear interest from the date

of the award: (i) If the award is not paid

within 30 days of receipt, (ii) if the

award is the subject of a motion to

vacate that is denied, or (iii) as specified

by the arbitrator(s). Paragraph 18.31(h)

will also specify that the arbitrator(s)

may set the interest rate. If not specified

by the arbitrator(s), the rate will be the

legal rate, if any, then prevailing in the

state where the award was rendered.

The proposed rule change is

consistent with Section 6(b) of the Act,

in general, and furthers the objectives of

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

is designed to promote just and

equitable principles of trade and the

protection of investors and the public

interest by improving the administration

of an impartial arbitration forum for the

resolution of disputes between

members, persons associated with

members and public investors.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

CBOE does not believe that the

proposed rule change will impose any

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 with respect to the proposed

rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

CBOE has requested that the proposed

rule change be given accelerated

effectiveness pursuant to Section

19(b)(2) of the Act. In that regard, 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, the requirements of Section

6(b)(5) thereof. Specifically, the

Commission concludes that accelerated

effectiveness of the proposal is

appropriate because all of the

substantive amendments proposed

therein were previously proposed by

other SROs and have been approved by

the Commission. Because the proposal

is designed to protect investors and the

public interest by providing for

uniformity in the rules governing the

administration of arbitration facilities

offered by the SROs, the Commission

finds good cause for approving the

foregoing rule change on an accelerated

basis prior to the thirtieth day after the

date of publication thereof in the

Federal Register.

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 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

Room. Copies of the filing will also be

available for inspection and copying at

the principal office of CBOE. All

submissions should refer to the file

number in the caption above and should

be submitted by February 21, 1995.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act2 that the

proposed rule change SR-CBOE–94–51,

amending various Exchange rules in

Chapter XVIII, ‘‘Arbitration,’’ in order to

conform these rules to the Uniform

Code, is hereby approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority, 17 CFR 200.30–3(a)(12).

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–2138 Filed 1–27–95; 8:45 am]

BILLING CODE 8010–01–M