Federal Register / Vol. 60, No. 32 / Thursday, February 16, 1995 / Notices 9067

1 15 U.S.C. 78s(b)(1) (1988).

2 17 CFR 240.19b–4 (1994).

3CBOE Rule 17.2(c), ‘‘Report,’’ requires the CBOE

staff to submit a written report of an investigation

to the Exchange’s Business Conduct Committee

(‘‘BCC’’) in every case where an investigation

results in a finding that there are reasonable

grounds to believe that a violation of the Act or the

CBOE’s rules has been committed. CBOE Rule

17.2(d) requires the CBOE staff to notify the subject

of the report of the general nature of the allegations

and of the specific provisions of the Act or of the

CBOE’s rules that appear to have been violated, and

the subject has 15 days from the date of the

notification to submit a written statement to the

Continued

II. To advance Objective 1, 2, and 3,

the NPC will collect, analyze, and

utilize information concerning existing

barriers and other impediments (legal

and other) to the formation and success

of labor-management partnerships, how

parties have overcome the barriers,

including training activities, incentives

to create successful partnerships, and

how parties manage conflict. Priority:

help overcome selected common

problems.

A. Collect

1. Utilize the same sources, including

focus groups, that are being used to

obtain data and information about

success stories to reveal legal and other

barriers and impediments to parties

achieving NPR goals.

2. Request parties in successful

partnerships to indicate whether further

progress is being impeded by legal or

other barriers.

3. Obtain information from the parties

during NPC meetings.

4. Meet with management groups,

such as Federal Managers Association,

the Senior Executives Association, and

the Coalition for Effective Change, to

identify ways to achieve NPR goals.

5. Consider a partnership facilitation

simulation with NPC Members.

6. Extract and summarize legal

barriers to partnership from the NPC

Report to the President and existing

GAO studies.

B. Analyze and Use

1. Compile a list of barriers to

partnership, methods to overcome

barriers, incentives to partnership and

methods to manage conflict.

2. Provide guidance on how to

overcome common barriers to

partnership at different levels.

3. Problem-solve to help overcome

common selected problems, including

‘‘people’’ issues (such as how to deal

with resistant managers and union

representatives); ‘‘how to’’ issues (such

as meaning of ‘‘employee’’, how to deal

with unrepresented employees, and

compliance with Federal Advisory

Committee Act requirements); and other

problems where a more consultative

role would facilitate the formation and

success of partnerships.

4. Identify cost-effective ways of

obtaining training.

5. Develop an instrument for parties

to determine their training needs.

6. Develop an instrument to evaluate

various training resource alternatives.

7. Integrate partnership training into

existing training programs, such as

union steward training, supervisory

training, total quality program training,

etc.

8. Develop resources for addressing

partners’ needs, such as: (1) enhancing

the clearinghouse’s information

concerning trainers/providers/change

promoters; (2) assisting resolution of

resource and resource allocation issues;

and (3) creating incentives by working

with established awards programs to

integrate labor/management partnership

as an eligibility or ranking criterion.

9. Develop and implement plans

which support NPC-recommended

changes necessary to achieve the

principles of Executive Order 12871.

III. To advance Objectives 1 and 3, the

NPC will engage in efforts designed to

measure the formation, conduct, and

achievements in partnership. Priority:

stimulate assessment.

A. Collect

Collect information on how parties

are assessing whether success has been

achieved; whether partnerships or

partnership agreements exist; what

activities are being undertaken by

partnerships; the impact of partnership

on productivity; the impact of

partnership on quality of work and

customer service; and information

concerning various aspects of training

activities undertaken under Executive

Order 12871.

1. Utilize the same sources for the

data and information collection,

including focus groups, to identify

criteria related to the assessment of

partnership activity, and to identify

training activities undertaken.

2. Request specific information

concerning the measurement of

partnership activities; the amount and

types of training activities undertaken;

who has been trained; who was the

provider; how has training been

evaluated; has training had desired

results; what skills have been identified

as necessary for successful partnerships;

and whether there is a partnership

training plan.

B. Analyze and Use

1. Identify and highlight good

assessment techniques already in place.

2. Provide guidance on the tiers of

success during the various stages of

partnership.

3. Issue guidance on skills needed for

partnership and high performance

workplace.

Responsibility for NPC Activities

1. The foregoing NPC activities will be

undertaken by NPC Members and by

action teams, composed of

representatives of NPC Member

organizations.

2. The Executive Secretariat, Office of

Personnel Management, will provide

logistical and administrative support to

the action teams.

3. The NPC Members will specifically

charge the action teams with definitive

objectives and time frames for

completion of the objectives.

Coordination with PMC

The NPC recognizes the importance of

the support of the President’s

Management Council in achieving the

foregoing objectives.

[FR Doc. 95–3820 Filed 2–15–95; 8:45 am]

BILLING CODE 6325–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–35350; File No. SR–CBOE–

94–35]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change by

the Chicago Board Options Exchange,

Inc., Relating to Expedited

Proceedings and Offers of Settlement

February 9, 1995.

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

Securities Exchange Act of 1934

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

the Chicago Board Options Exchange,

Inc. (‘‘CBOE’’ or ‘‘Exchange’’) submitted

to the Securities and Exchange

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

a proposal to amend CBOE Rules 17.3,

‘‘Expedited Proceeding,’’ and 17.8,

‘‘Offers of Settlement,’’ to (1) specify

that the subject of an Exchange

investigation must notify the CBOE staff

in writing within 15 days of the date of

notification under CBOE Rule 17.2(d),

‘‘Notice, Statement and Access,’’ that he

elects to proceed in an expedited

manner pursuant to CBOE Rule 17.3; (2)

reduce the time period during which

settlement offers may be submitted by a

subject in an Exchange disciplinary

matter who seeks to resolve the matter

through expedited proceedings pursuant

to CBOE Rule 17.3; and (3) allow either

the subject or the Exchange staff to end

the negotiations for a letter of consent at

any point during the negotiations.3
9068 Federal Register / Vol. 60, No. 32 / Thursday, February 16, 1995 / Notices

BCC concerning why no disciplinary action should

be taken. Under CBOE Rule 17.3, the subject of a

report written pursuant to CBOE Rule 17.2 may

seek to dispose of the matter through a letter of

consent prior to the issue of a statement of charges.

4Under CBOE Rule 17.4(b), ‘‘Initiation of

Charges,’’ when it appears to the BCC from the

report of the exchange staff that there is probable

cause for finding a violation within the disciplinary

jurisdiction of the Exchange and that further

proceedings are warranted, the BCC directs the

Exchange staff to prepare a statement of charges

against the person or organization alleged to have

committed a violation (the ‘‘respondent’’)

specifying the acts in which the Respondent is

charged to have engaged and setting forth the

specific provisions of the Act, as amended, and the

rules and regulations promulgated thereunder,

constitutional provisions, by-laws, rules,

interpretations or resolutions of which such acts are

in violation. Under CBOE Rule 17.8, at any time

during the 120-day period following the date of

service of a statement of charges, a respondent may

submit a written offer of settlement to the BCC. The

offer of settlement must contain a proposed

stipulation of facts and consent to a specified

sanction.

5The CBOE states that it will terminate the

negotiations for a letter of consent if, among other

things, it appears to the Exchange that the subject

is not negotiating in good faith. Telephone

conversation between Arthur Reinstein, Attorney,

CBOE, and Yvonne Fraticelli, Staff Attorney,

Options Branch, Division of Market Regulation,

Commission, on February 8, 1995. 6 15 U.S.C. 78f(b)(5) (1988).

The proposal was published for

comment in the Federal Register in

Securities Exchange Act Release No.

34987 (November 18, 1994), 59 FR

60858 (November 28, 1994). No

comments were received on the

proposed rule change.

CBOE Rule 17.3 establishes an

expedited process under which the

subject of an Exchange investigation

may seek to resolve a disciplinary

matter through a letter of consent with

the Exchange prior to the issuance of a

statement of charges against the

subject.4 Under CBOE Rule 17.3, a letter

of consent must contain a description of

the facts, violation, and sanction, and

must be agreed upon by the Exchange

staff, the subject of the investigation,

and the BCC. If the Exchange staff and

the subject are unable to agree upon a

letter of consent or if they agree upon

a letter of consent and the letter is

rejected by the BCC, the matter proceeds

as if no letter of consent had been

submitted to the BCC (i.e., the BCC may

decide to authorize the issuance of a

statement of charges against the subject;

the subject is then entitled to submit

settlement offers to the BCC pursuant to

CBOE Rule 17.8 during the 120-day

settlement period).

The CBOE proposes to amend CBOE

Rule 17.3 to (1) require that any subject

who desires to resolve a disciplinary

matter through the expedited

proceedings using a letter of consent to

submit a written notice of this fact to the

Exchange staff within 15 days from the

date of service of a notification letter;

and (2) permit either the Exchange staff

or the subject of an investigation to

declare an end to the negotiations

regarding a letter of consent at any point

in the negotiations by providing written

notice to the other party.5 Thereafter,

the subject will have 15 days to submit

a notification response pursuant to

CBOE Rule 17.2(d) and the Exchange

staff will then be permitted to bring the

matter to the BCC. The CBOE states that

these new procedures will establish a

start and end date for expedited

proceedings so that the number of days

a subject spends in the expedited

process can be calculated and deducted

accordingly from the 120-day settlement

period, as proposed under CBOE Rule

17.8.

The proposed amendments to CBOE

Rule 17.8, Interpretation and Policy .01

would reduce the time period during

which settlement offers may be

submitted to the BCC by a subject who

seeks to resolve a disciplinary matter

through expedited proceedings, is

unable to reach an agreement with

Exchange staff, and consumes over 30

days in the expedited proceedings.

Specifically, under the proposal, the

number of days in excess of 30 days that

a subject spends in the expedited

proceeding will be deducted from the

120-day settlement period applicable to

the subject under CBOE Rule 17.8.

Regardless of the amount of time spent

in unsuccessful negotiations, the

respondent will have no less than 14

days to submit a settlement offer to the

BCC pursuant to CBOE Rule 17.8(a).

The mechanism for limiting

settlement periods will apply only to a

subject who attempts to resolve a

disciplinary matter through expedited

proceedings and is unable to reach an

agreement with CBOE staff upon a letter

of consent; it will not apply to a subject

who attempts to resolve a disciplinary

matter through expedited proceedings

and who reaches an agreement with

CBOE staff upon a letter of consent but

finds that the agreed-upon letter of

consent is not accepted by the BCC. In

addition, under the proposal, the

number of days between the time that

the expedited process is deemed to end

and the time that a subject is served

with a statement of charges will not be

deducted from the 120-day settlement

period applicable to the subject.

Finally, the CBOE proposes to make

certain editorial changes to clarify CBOE

Rules 17.3 and 17.8 without affecting

their substance.

The CBOE believes that the proposal

will enhance the efficiency and

effectiveness of the Exchange’s

disciplinary process. Specifically, the

Exchange believes that the proposed

changes will minimize opportunities for

delay and thereby help to preserve

evidence and the memories of

witnesses.

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) 6 that the

rules of an exchange be designed to

prevent fraudulent and manipulative

acts and practices and to protect

investors and the public interest. In

addition, the Commission finds that the

Exchange’s proposal is consistent with

the requirement of Section 6(b)(1) of the

Act that an exchange have the capacity

to enforce compliance by its members

with the Act and the rules and

regulations thereunder and the rules of

the exchange. The Commission also

believes that the proposal is consistent

with Section 6(b)(7) of the Act because

it provides a fair procedure for

disciplining members.

The Commission believes that the

proposal strikes a reasonable balance

between the Exchange’s need to provide

prompt, effective and meaningful

discipline for violations of Exchange

rules and the federal securities laws and

the need to ensure fair procedures for

the subjects of Exchange investigations

to contest CBOE disciplinary

proceedings. By streamlining the

expedited proceedings established in

CBOE Rule 17.3 and limiting the time

allowed for the submission of settlement

offers under CBOE Rule 17.8, the

Commission believes that the proposal

should minimize opportunities for

delay, thereby helping to preserve

evidence and the availability of

witnesses. This, in turn, should enhance

the quality, consistency, and fairness of

the Exchange’s disciplinary proceedings

and enable the CBOE to better enforce

compliance by its members with the

Exchange’s rules and the federal

securities laws.

The CBOE states that the Exchange’s

current rules allow the subject of an

Exchange investigation who

unsuccessfully attempts to resolve a

disciplinary matter through expedited

proceedings to take advantage of the

entire 120-day settlement period

provided under CBOE Rule 17.8, so that

a respondent may utilize the expedited

process to circumvent the 120-day

settlement period and delay the

resolution of a case. Accordingly, the
Federal Register / Vol. 60, No. 32 / Thursday, February 16, 1995 / Notices 9069

7See note 5, supra.

8 15 U.S.C. 78s(b)(2) (1988).

9 17 CFR 200.30–3(a)(12) (1994). 1 15 U.S.C. 78s(b)(1) (1988).

Exchange proposes to amend CBOE

Rule 17.8, Interpretation and Policy .01

to deduct from the 120-day settlement

period the number of days over 30 days

which a subject spends in the expedited

process unsuccessfully attempting to

reach an agreement with the Exchange

staff.

The Commission believes that the

proposed amendments to CBOE Rule

17.8 should allow the Exchange’s

disciplinary proceedings to progress

promptly without compromising

members’ rights to ‘‘fair procedures’’ in

CBOE disciplinary proceedings.

Specifically, by deducting from the 120-

day settlement period the number of

days over 30 spent in unsuccessful

negotiations under the expedited

process, the proposal will prevent the

subject of an Exchange investigation

from using the expedited process to

delay the resolution of a case while

continuing to ensure that the subject has

adequate time to resolve the matter

through a letter of consent or settlement.

In this context, the proposal will deduct

only the portion of days above 30 spent

in unsuccessful negotiations under the

expedited process from the 120-day

settlement period, thereby limiting the

total amount of time a subject may

spend in attempts to resolve a case

through either a letter of consent under

CBOE Rule 17.3 or a settlement offer

under CBOE Rule 17.8.

The Commission also believes that it

is reasonable to allow the CBOE staff, as

well as the subject, to terminate

negotiations for a letter of consent at any

time during the negotiations. As noted

above,7 the CBOE has stated that it will

terminate the letter of consent

negotiations if, among other things, it

appears to the Exchange that a subject

is not negotiating in good faith. The

Commission believes that this provision

will help to ensure that disciplinary

matters are resolved quickly by

preventing subjects who do not

negotiate in good faith from using the

letter of consent negotiations to delay

the resolution of the matter.

At the same time, the Commission

believes that the proposal should

preserve the rights of respondents to

submit settlement offers under CBOE

Rule 17.8. By providing that

respondents will have no less than 14

days following the date of service of the

statement of charges to submit offers of

settlement to the BCC, regardless of the

amount of time spent in the expedited

process, the proposal should provide

respondents with sufficient time to

submit settlement offers under CBOE

Rule 17.8. Thus, the Commission

believes that the proposed amendments

to CBOE Rule 17.8 will help to

safeguard the procedural rights of

members while preserving the

Exchange’s ability to administer its

disciplinary proceedings in a timely and

efficient manner.

The Commission also believes that the

proposed amendments to CBOE Rule

17.3 are consistent with the Act.

Specifically, the Commission believes

that the proposed amendments will

streamline the Exchange’s expedited

proceedings by providing that a subject

of an Exchange investigation who

wishes to dispose of a matter through a

letter of consent must notify the

Exchange staff of his intent within 15

days of the receipt of notice under

CBOE Rule 17.2(d). In addition, the

proposal clarifies the requirements for

expedited proceedings by specifying

that the subject and the Exchange staff

must agree upon the terms of a letter of

consent and the letter must be signed by

the subject. The proposal also allows

either party to deliver a written notice

declaring an end to the negotiations,

thereby limiting the amount of time that

may be spent in unsuccessful

negotiations.

In summary, the Commission believes

that the proposed amendments to CBOE

Rules 17.3 and 17.8 should allow cases

to be resolved more quickly and

efficiently, while continuing to ensure

adequate due process for subjects of

disciplinary matters, consistent with

Section 6(b)(7) of the Act. Accordingly,

the changes should permit Exchange

resources to be allocated more

effectively in pursuing violations of the

Exchange’s rules and the federal

securities laws and help to ensure that

appropriate and fair discipline is

imposed for violations. This should

further the Exchange’s mandate to

protect investors and the public interest.

Finally, the Commission believes that

it is reasonable for the Exchange to

clarify its rules by making editorial

changes to CBOE Rules 17.3 and 17.8

which do not affect the substance of

those rules.

It is therefore ordered, pursuant to

section 19(b)(2) of the Act,8 that the

proposed rule change (SR–CBOE–94–

35) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–3844 Filed 2–15–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–35354; International Series

Release No. 783; File No. SR–ISCC–94–01]

Self-Regulatory Organizations;

International Securities Clearing

Corporation; Notice of Filing add

Immediate Effectiveness of a Proposed

Rule Change Regarding the Global

Clearing Network Service

February 10, 1995.

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

Securities Exchange Act of 1934

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

January 6, 1995, the International

Securities Clearing Corporation

(‘‘ISCC’’) filed with the Securities and

Exchange Commission (‘‘Commission’’)

the proposed rule change (File No. SR–

ISCC–95–01) as described in Items I, II,

and III below, which items have been

prepared primarily by ISCC. 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 proposed rule change consists of

amendments to ISCC’s Rule 50 to

expand the categories of entities with

which ISCC may establish relationships

for its foreign clearance and settlement

service.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

ISCC included statements concerning

the purpose of and basis for the

proposed rule change and discussed any

comments that it received on the

proposed rule change. The text of these

statements may be examined at the

places specified in Item IV below. ISCC

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) ISCC Rule 50 currently provides

that ISCC may establish a foreign

clearing, settlement, and custody service

in conjunction with banks and trust

companies to be known as the Global

Clearance Network (‘‘GCN’’) Service.

The proposed rule change expands the

categories of entities with whom ISCC

may enter into agreements in order to

provide the GCN Service to include any

type of entity. This change will permit