Document ID: SEC-2009-1846-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Order Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Amend Rules Relating to Conduct of Business on the Exchange
Posted Date: 2009-12-30T05:00Z

[Federal Register: December 30, 2009 (Volume 74, Number 249)]
[Notices]               
[Page 69185-69186]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30de09-137]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61207; File No. SR-Phlx-2009-84]

 
 Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Order 
Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto, 
To Amend Rules Relating to Conduct of Business on the Exchange

December 18, 2009.

    On October 29, 2009, NASDAQ OMX PHLX, Inc. (``Phlx'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change that would: (i) Create an expedited hearing 
process for members posing an immediate threat to the safety of persons 
or property, seriously disrupting Exchange operations, or who are in 
possession of a firearm on the Exchange trading floor; (ii) increase 
the time period a member may be physically excluded from the trading 
floor; (iii) increase the maximum amount a member may be fined pursuant 
to Rule 60; (iv) amend language applicable to contesting citations and 
create a forum fee of $100 for contesting citations; (v) add language 
to explicitly prohibit alcohol and illegal controlled substances on the 
trading floor; (vi) increase fines for various regulations; (vii) 
require non-member visitors who are performing contract work at the 
Exchange on behalf of members to provide a certificate of insurance and 
add fines for failure to provide proof of insurance; (viii) add a rule 
to limit exchange liability and require reimbursement of certain 
expenses; (ix) amend the disciplinary rules to allow Enforcement Staff 
to request a hearing; and (x) increase the

[[Page 69186]]

limit on fines from $5,000 to $10,000 and add clarifying language to 
Rule 970.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    On November 6, 2009, Phlx filed Amendment No. 1. The proposed rule 
change, as amended, was published for comment in the Federal Register 
on November 17, 2009.\3\ The Commission received no comments on the 
proposal. This order approves the proposed rule change.
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    \3\ Securities Exchange Act Release No. 60961 (November 6, 
2009), 74 FR 59279.
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    After careful consideration, 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.\4\ In particular, the Commission believes that the proposed 
rule change is consistent with Section 6(b)(5) of the Act \5\ in that 
it is designed to promote just and equitable principles of trade, to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and, in general to protect 
investors and the public interest. The Commission believes the proposed 
rule change may facilitate prompt, appropriate, and effective 
discipline for violations of Rule 60 and the regulations thereunder 
designed to maintain order on the Exchange.
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    \4\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(5).
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    With regard to the proposed rule change's amendments to the Phlx's 
Minor Rule Plan (``MRP''), the Commission also believes that the 
proposed rule change is consistent with Sections 6(b)(1) and 6(b)(6) of 
the Act,\6\ which require that the rules of an exchange enable the 
exchange to enforce compliance with, and provide appropriate discipline 
for, violations of Commission and Exchange rules. Furthermore, the 
Commission believes that the proposed changes to the MRP should 
strengthen the Exchange's ability to carry out its oversight and 
enforcement responsibilities as a self-regulatory organization in cases 
where full disciplinary proceedings are unsuitable in view of the minor 
nature of the particular violation. Therefore, the Commission finds 
that the proposed rule change amending the MRP is consistent with the 
public interest, the protection of investors, or otherwise in 
furtherance of the purposes of the Act, as required by Rule 19d-1(c)(2) 
under the Act,\7\ which governs minor rule violation plans.
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    \6\ 15 U.S.C. 78f(b)(5) and 78f(b)(6).
    \7\ 17 CFR 240.19d-1(c)(2).
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    In approving this proposed rule change, the Commission in no way 
minimizes the importance of compliance with Phlx rules and all other 
rules subject to the imposition of fines under the MRP. The Commission 
believes that the violation of any self-regulatory organization's 
rules, as well as Commission rules, is a serious matter. However, the 
MRP provides a reasonable means of addressing rule violations that do 
not rise to the level of requiring formal disciplinary proceedings, 
while providing greater flexibility in handling certain violations. The 
Commission expects that Phlx will continue to conduct surveillance with 
due diligence and make a determination based on its findings, on a 
case-by-case basis, whether a fine of more or less than the recommended 
amount is appropriate for a violation under the MRP or whether a 
violation requires formal disciplinary action.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\8\ and Rule 19d-1(c)(2) under the Act,\9\ that the proposed rule 
change (SR-Phlx-2009-84), as amended, be, and hereby is, approved and 
the minor rule plan amendment is declared effective.
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    \8\ 15 U.S.C. 78s(b)(2)
    \9\ 17 CFR 240.19d-1(c)(2).
    \10\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(44).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30912 Filed 12-29-09; 8:45 am]

BILLING CODE 8011-01-P