32852 Federal Register / Vol. 66, No. 117 / Monday, June 18, 2001 / Notices

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

2 17 CFR 240.19b–4.

3See Amex Rule 1000(b) for the definition of

Portfolio Depositary Receipts.

4See Amex Rule 1000A(b) for the definition of

Index Fund Shares.

5See Amex Rule 1200(b) for the definition of

Trust Issued Receipts.

6See Amex Equity Fee Schedule.

7A ‘‘competing market maker’’ is defined in the

Exchange Equity Fee Schedule as a specialist or

market maker registered as such as on a registered

stock exchange (other than the Amex) or a market

maker bidding and offering over-the-counter in an

Amex-traded security.

8 15 U.S.C. 78f(b).

9 15 U.S.C. 78f(b)(4).

Dated: June 13, 2001.

Steven W. Williams,

Acting Secretary.

[FR Doc. 01–15318 Filed 6–15–01; 8:45 am]

BILLING CODE 7710–FW–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44410; File No. SR–Amex–

2001–26]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the American Stock Exchange LLC

Relating To an Increase in the

Exchange Regulatory Fee

June 12, 2001.

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 May 7,

2001, the American Stock Exchange LLC

(‘‘Amex’’ 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. 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 Amex proposes to amend the

Amex Equity Fee Schedule to increase

the Regulatory Fee from .0005 × Total

Value to .00075 × Total Value for orders

entered electronically into the Amex

Order File from off the Floor (‘‘System

Orders’’) by a member or member

organization trading as an agent for the

account of a non-member competing

market maker. Below is the text of the

proposed rule change. Text in italics

indicates material to be added.

* * * * *

Amex Equity Fee Schedule

I. Transaction Charges

No change

II. Regulatory Fee

.00005 × Total Value (for all equity

securities except Portfolio Depositary

Receipts, Index Fund Shares and Trust

Issued Receipts).

000075 × Total Value (for System Orders in

Portfolio Depositary Receipts, Index Fund

Shares and Trust Issued Receipts entered by

a member or member organization trading as

agent for the account of a non-member

competing market maker).

Notes:

1. All trades executed on the Exchange in

Portfolio Depositary Receipts, Index Fund

Shares and Trust Issued Receipts will be

exempt from the regulatory fee. This

provision does not apply to System Orders of

a member or member organization trading as

agent for the account of a non-member

competing market maker.

2. System Orders for up to 2,099 shares

will not be assessed a regulatory fee. This

provision does not apply to System Orders of

a member or member organization trading as

an agent for the account of a non-member

competing market maker. (Orders in Portfolio

Depositary Receipts, Index Fund Shares and

Trust-Issued Receipts are covered under Note

1 above.)

* * * * *

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

Amex included statements concerning

the purpose of an 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 Amex 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 Amex proposes to amend the

Exchange Equity Fee Schedule to

increase the Regulatory Fee for certain

orders in Portfolio Depositary Receipts 3

(e.g. SPDRs Nasdaq 100 Index Tracking

Stock (sm)), Index Fund Shares 4 (e.g.,

iShares(sm) Select Sector SPDRs), and

Trust Issued Receipts 5 (e.g., HOLDRs)

(referred to collectively herein as the

‘‘Products’’). The Exchange does not

assess a transaction charge for orders in

the Products entered electronically into

the Amex Order File from off the

Exchange Floor (‘‘System Orders’’) up to

5,099 shares.6 This provision, however,

does not apply to System Orders of a

member or member organization trading

as an agent for the account of a nonmember competing market maker.7 The

Exchange also imposes a Regulatory Fee

for equities transactions of .00005 ×

Total Value. Transactions executed on

the Amex in the Products are exempt

from the Regulatory Fee, except for

System Orders of a member or member

organization trading as an agent for the

account of a non-member competing

market maker, which continue to be

subject to the Regulatory Fee.

The Exchange proposes to increase

the Regulatory Fee from .00005 × Total

Value to .000075 × Total Value for

System Orders in the Products entered

by members acting as an agent for nonmember competing market makers. The

Exchange is undertaking the proposed

revision in fees to offset increased

Exchange expenses and costs associated

with the continued development, listing

and trading of additional Portfolio

Depositary Receipts, Index Fund Shares

and Trust Issued Receipts. Because the

proposed revision in fees will better

enable the Exchange to further develop,

list, and trade new Products, the

Exchange believes it is appropriate and

necessary to implement a revised

Regulatory Fee for the Products.

2. Statutory Basis

The proposed rule change is

consistent with section 6(b) of the Act 8

in general, and furthers the objectives of

section 6(b)(4) of the Act 9 in particular,

in that it is intended to assure the

equitable allocation of reasonable dues,

fees, and other charges among its

members, issuers, and other persons

using the Exchange facilities.

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.

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

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

Federal Register / Vol. 66, No. 117 / Monday, June 18, 2001 / Notices 32853

10 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3CBOE Rule 18.1, Interpretation and Policy .01

provides, among other things, that former members

and associated persons are subject to Exchange

arbitration proceedings with respect to any dispute

claim or controversy arising out of the Exchange

business of such former member or associated

person that took place while such member or

associated person was still a member or associated

person.

(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 rule

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 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 Amex. All

submissions should refer to File SR–

Amex–2001–26 and should be

submitted by July 9, 2001.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.10

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–15221 Filed 6–15–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44408; File No. SR–CBOE–

2001–14]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Board Options Exchange,

Inc. To Amend Its Rules Regarding

Jurisdiction Over Former Members and

Associated Persons for Failure To

Honor an Exchange Arbitration Award

June 11, 2001.

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 March 27,

2001, the Chicago Board Options

Exchange, Inc. (‘‘CBOE’’ 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 CBOE. 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 CBOE proposes to amend its rules

regarding jurisdiction over former

members and associated persons for

failure to honor an Exchange arbitration

award.

The text of the proposed rule change

is available at the Office of the

Secretary, CBOE and at the Commission.

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

CBOE 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 CBOE 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 proposed to amend its

rules to provide that the failure to honor

a CBOE arbitration award by a former

Exchange member or associated person

would subject such former member or

associated person to the disciplinary

jurisdiction of the Exchange regardless

of the date of termination of

membership.

Chapter 18 of the Exchange’s rules

governs the CBOE’s arbitration process.

CBOE Rule 18.37 provides that any

member or person associated with a

member who fails to honor an Exchange

arbitration award shall be subject to

CBOE disciplinary proceedings.

Furthermore, CBOE Rule 18.1,

Interpretation and Policy .02 states that

it may be deemed conduct inconsistent

with just and equitable principles of

trade to fail to honor a CBOE arbitration

award. Conduct inconsistent with just

and equitable principles of trade is a

violation of Exchange Rule 4.1, and is

thus subject to CBOE disciplinary

proceedings.

Chapter 17 of the Exchange’s rules

governs the CBOE disciplinary process.

Generally, the Exchange maintains

disciplinary jurisdiction over its

members, and persons associated with

its members, with respect to instances

where members or associated persons

are alleged to have violated or aided and

abetted a violation of any provision of

the Act, the rules and regulations

promulgated thereunder, or any

constitutional provisions, by-laws or

rules of the Exchange or any

interpretation thereof or resolution of

the Board of the Exchange regulating the

conduct of business on the Exchange.

Thus, a member or person associated

with a member who fails to honor an

Exchange arbitration award has violated

CBOE Rule 18.37 and CBOE Rule 4.1

and is subject to disciplinary

proceedings under Chapter 17.

Currently, however, such failure to

honor a CBOE arbitration award by a

former member, or former person

associated with a member, may not

always be subject to the Exchange’s

disciplinary jurisdiction.

CBOE Rule 17.1(b) provides that

members (or associated persons) shall

continue to be subject to the

disciplinary jurisdiction of the

Exchange following such member’s

(associated person’s) termination of

membership (association with a

member) with respect to matters that

occurred prior to such termination,

provided that written notice of the

commencement of an inquiry into such

matters is given by the Exchange to such

former member (person) within one year

of the Exchange’s receipt of notice of

such termination. This provision allows

for certain anomalies in the context of

failure to pay arbitration awards. For

example, the following scenario is

possible: A customer is involved in a

trading dispute with a CBOE member.

Months later, the CBOE member

terminates its membership on the

Exchange. Weeks after the membership

termination, the customer files an

arbitration claim with the CBOE

Arbitration Department against the

former member.3 One and one-half years

after the membership termination, the

customer prevails in the arbitration

proceeding, and a monetary award is