Self-Regulatory Organizations; Order Approving Proposed Rule Change and Amendment No. 1 Thereto by the American Stock Exchange LLC to Amend Its Minor Rule Violation Plan, 6741-6742 [E5-495]
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Federal Register / Vol. 70, No. 25 / Tuesday, February 8, 2005 / Notices
revised the ODD to, among other things,
reflect the CDCC’s new automatic
exercise parameters for equity and bond
options, to add an Annex to the ODD
setting forth the holidays and early
´
closings of the Bourse de Montreal, to
update the discussion of Canadian
federal income tax considerations
applicable to non-residents, and to
indicate that the S&P/TSE 60 Index is
now named the S&P/TSX 60 Index.
Rule 9b–1 under the Act provides that
an options market must file five
preliminary copies of an amended ODD
with the Commission at least 30 days
prior to the date when definitive copies
of the amended ODD are furnished to
customers, unless the Commission
determines otherwise, having due
regard to the adequacy of the
information disclosed and the public
interest and protection of investors.4
The Commission has reviewed the
amended ODD and finds, having due
regard to the adequacy of the
information disclosed, that it is
consistent with the protection of
investors and in the public interest to
allow the distribution of the amended
ODD as of the date of this order.5
It is therefore ordered, pursuant to
Rule 9b–1 under the Act,6 that the
distribution of the revised ODD (SR–
ODD–2004–03) as of the date of this
order, is approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.7
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–511 Filed 2–7–05; 8:45 am]
BILLING CODE 8010–01–P
2) (amending the ODD to include, among other
things, a discussion of Government of Canada
Treasury Bill Price Index options; and 22349
(August 21, 1985), 50 FR 34956 (August 28, 1985)
(File No. SR–ODD–85–1) (amending the ODD to
include, among other things, a discussion of the
risks and uses of stock index and bond options).
4 This provision is intended to permit the
Commission either to accelerate or extend the time
period in which definitive copies of a disclosure
document may be distributed to the public.
5 Rule 9b–1 under the Act provides that the use
of an ODD shall not be permitted unless the options
class to which the documents relates is the subject
of an effective registration statement on Form S–20
under the Securities Act of 1933. On April 19, 2004,
the Commission, pursuant to delegated authority,
declared effective the CDCC’s most recent PostEffective Amendment to its Form S–20 registration
statement. See File No. 2–69458.
6 17 CFR 240.9b–1.
7 17 CFR 200.30–3(a)(39)(i).
VerDate jul<14>2003
18:12 Feb 07, 2005
Jkt 205001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51119; File No. SR–Amex–
2004–72]
Self-Regulatory Organizations; Order
Approving Proposed Rule Change and
Amendment No. 1 Thereto by the
American Stock Exchange LLC to
Amend Its Minor Rule Violation Plan
February 1, 2005.
On August 23, 2004, the American
Stock Exchange LLC (‘‘Amex’’ 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 to
amend Exchange Rule 590, its Minor
Rule Violation Fine Plan (‘‘Plan’’). On
November 23, 2004, Amex filed
Amendment No. 1 to the proposed rule
change. The proposed rule change, as
amended, was published for comment
in the Federal Register on December 22,
2004.3 The Commission received no
comments regarding the proposal.
The Exchange proposed to make the
following actions subject to its Plan:
• Failure to comply with trade
reporting requirements for options
(Amex Rule 992);
• Violation of Exchange rules
regarding the deactivation of quote
assist as it pertains to options (Amex
Rules 950(g), Commentary .01 and 950–
ANTE(g), Commentary .01);
• Violation of Exchange rules
regarding the Options Linkage Program
relating to the responding to, and
receiving of, Linkage Orders (Amex Rule
941(d) and (e)), Avoidance and
Satisfaction of Trade-Throughs (Amex
Rule 942(a)), and Locked Markets
(Amex Rule 943);
• Violation of Exchange policy
regarding affirmative determination of
the availability for borrowing of shares
of Amex-listed issues prior to effecting
short sale transactions (Circular 90–25);
and
• Effecting or causing to be effected a
transaction outside of business hours
through the Intermarket Trading System
(Amex Rules 1, 100, and 233).
The Exchange also proposed to amend
the Plan as follows:
• Expand the requirement of
reporting trade comparison data (Part
2(d)(3) of Amex Rule 590) to include all
transactions effected on the Exchange
and to relocate such rule to Part 1(g) of
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 50871
(December 16, 2004), 69 FR 76801.
PO 00000
1 15
2 17
Frm 00130
Fmt 4703
Sfmt 4703
6741
Amex Rule 590 so as to subject it to
Amex Enforcement Department action
rather than Amex Floor Official action;
and
• Revise Part 3 of Amex Rule 590 to
reflect the current filing schedule for the
Form 50 (Short Position), which is now
also required to be filed at or about the
end of the month for selected derivative
products.
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 proposal
is consistent with Section 6(b)(5) of the
Act 5 which requires that the rules of an
exchange be designed to promote just
and equitable principles of trade, to
remove impediments and to 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 also
believes that the proposal is consistent
with Sections 6(b)(1) 6 and 6(b)(6) 7 of
the Act which require that the rules of
an exchange enforce compliance and
provide appropriate discipline for
violations of Commission and Exchange
rules. In addition, because Amex Rule
590 provides procedural rights to a
person fined under the Plan to contest
the fine and permit a hearing on the
matter, the Exchange believes the
proposal provides a fair procedure for
the disciplining of members and
persons associated with members,
consistent with Sections 6(b)(7) 8 and
6(d)(1) 9 of the Act.
Finally, the Commission finds that the
proposal 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 10 which governs
minor rule violation plans. The
Commission believes that these changes
to Amex’s Plan will strengthen its
ability to carry out its oversight and
enforcement responsibilities as a selfregulatory organization in cases where
full disciplinary proceedings are
unsuitable in view of the minor nature
of the particular violation.
In approving this proposed rule
change, the Commission in no way
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).
6 15 U.S.C. 78f(b)(1).
7 15 U.S.C. 78f(b)(6).
8 15 U.S.C. 78f(b)(7).
9 15 U.S.C. 78f(d)(1).
10 17 CFR 240.19d–1(c)(2).
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08FEN1
6742
Federal Register / Vol. 70, No. 25 / Tuesday, February 8, 2005 / Notices
minimizes the importance of
compliance with Amex rules and all
other rules subject to the imposition of
fines under the Exchange’s Plan. The
Commission believes that the violation
of any self-regulatory organization’s
rules, as well as Commission rules, is a
serious matter. However, the Exchange’s
Plan 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 Amex will continue to
conduct surveillance with due diligence
and make a determination based on its
findings, whether fines of more or less
than the recommended amount are
appropriate for violations under the
Plan, on case-by-case basis, or a
violation requires formal disciplinary
action.
It is therefore ordered, pursuant to
section 19(b)(2) of the Act 11 and Rule
19d–1(c)(2) under the Act,12 that the
proposed rule change (SR–Amex–2004–
72), as amended, be, and hereby is,
approved and declared effective.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5–495 Filed 2–7–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51112; File No. SR–CBOE–
2005–013]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Inc.; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change and Amendment No. 1 Thereto
To Extend a Pilot Program Relating to
Certain Limitations on Trade-Through
Liability at the End of the Options
Trading Day
January 31, 2005.
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 January
26, 2005, the Chicago Board Options
Exchange, Inc. (‘‘CBOE’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
11 15
U.S.C. 78s(b)(2).
CFR 240.19d–1(c)(2).
13 17 CFR 200.30–3(a)(12); 17 CFR 200.30–
3(a)(44).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
12 17
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18:12 Feb 07, 2005
Jkt 205001
proposed rule change as described in
items I and II below, which items have
been prepared by the CBOE. On January
28, 2005, the CBOE filed Amendment
No. 1 to the proposed rule change.3 The
Exchange has filed the proposal as a
‘‘non-controversial’’ rule change
pursuant to Section 19(b)(3)(A) of the
Act,4 and Rule 19b–4(f)(6) thereunder,5
which renders the proposal effective
upon filing with the Commission.6 The
Commission is publishing this notice to
solicit comments on the proposed rule
change, as amended, from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
CBOE proposes to extend a pilot
program relating to certain limitations
on trade-through liability at the end of
the trading day.
The text of the proposed rule change
is available on the CBOE’s Web site at
https://www.cboe.com, at the Exchange’s
Office of the Secretary, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
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 Exchange 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 purpose of the filing is to
conform CBOE rules to Joint
Amendment No. 14 to the Plan for the
Purpose of Creating and Operating an
Intermarket Option Linkage (the
‘‘Linkage Plan’’) 7 to extend the pilot
provision in the CBOE rules limiting
3 In Amendment No. 1 the Exchange made certain
technical corrections to Exhibit 5 to the filing.
4 15 U.S.C. 78s(b)(3)(A).
5 17 CFR 240.19b–4(f)(6).
6 The CBOE asked the Commission to waive the
30-day operative delay. See Rule 19b–4(f)(6)(iii). 17
CFR 240.19b–4(f)(6)(iii).
7 See Joint Amendment No. 14 to the Linkage
Plan filed by the Exchange on January 27, 2005 in
a letter from Edward J. Joyce, President and Chief
Operating Officer, CBOE, to Jonathan G, Katz,
Secretary, Commission, dated January 26, 2005.
PO 00000
Frm 00131
Fmt 4703
Sfmt 4703
trade-through liability at the end of the
options trading day. Pursuant to the
Linkage Plan pilot as currently in effect,
an options exchange member’s tradethrough liability is limited to 25
contracts per Satisfaction Order 8 for the
period between five minutes prior to the
close of trading in the underlying
security and the close of trading in the
options class. The participant option
exchanges in the Linkage Plan
(‘‘Participants’’) originally proposed this
limitation on liability as a one-year pilot
in Joint Amendment No. 4 to the
Linkage Plan. The Commission
temporarily put into effectiveness the
Linkage Plan pilot on January 31, 2003,9
followed by permanent approval on
June 18, 2003.10 The Commission then
granted two extensions to the Linkage
Plan pilot, first until June 30, 200411
and then until January 31, 2005.12
The Exchange is proposing to extend
the pilot in CBOE’s rules for an
additional year, until January 31, 2006.
In addition, the Exchange proposes to
increase the limit on trade-through
liability at the end of the day from 25
contracts to 50 contracts per Satisfaction
Order. This increase in the limit on
liability would be effective on February
1, 2005, when the current pilot expires.
The period during which this limit will
apply will remain the same, from five
minutes prior to the close of trading in
the underlying security until the close
of trading in the options class.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,13 in general, and
furthers the objectives of Section
6(b)(5),14 in particular, in particular in
that it should promote just and
equitable principles of trade, serve to
remove impediments to and perfect the
mechanism of a free and open market
8 A ‘‘Satisfaction Order’’ is an order sent through
the Linkage to notify a Participant Exchange of a
Trade-Through and to seek satisfaction of the
liability arising from that Trade-Through. See
Section 2(16)(c) of the Linkage Plan.
9 See Securities Exchange Act Release No. 47298
(January 31, 2003), 68 FR 6524 (February 7, 2003)
(Temporary effectiveness of pilot program on a 120day basis).
10 See Securities Exchange Act Release No. 48055
(June 18, 2003), 68 FR 37869 (June 25, 2003) (Order
approving Joint Amendment No. 4).
11 See Securities Exchange Act Release No. 49146
(January 29, 2004), 69 FR 5618 (February 5, 2004)
(Order approving Joint Amendment No. 8).
12 As a part of this extension of the Linkage Plan
pilot program, the Participants increased the
maximum liability from 10 to 25 contracts. See
Securities Exchange Act Release No. 49863 (June
15, 2004), 69 FR 35081 (June 23, 2004) (Order
approving Joint Amendment No. 12).
13 15 U.S.C. 78f(b).
14 15 U.S.C. 78f(b)(5).
E:\FR\FM\08FEN1.SGM
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]]>Agencies
[Federal Register Volume 70, Number 25 (Tuesday, February 8, 2005)]
[Notices]
[Pages 6741-6742]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-495]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51119; File No. SR-Amex-2004-72]
Self-Regulatory Organizations; Order Approving Proposed Rule
Change and Amendment No. 1 Thereto by the American Stock Exchange LLC
to Amend Its Minor Rule Violation Plan
February 1, 2005.
On August 23, 2004, the American Stock Exchange LLC (``Amex'' 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 to amend Exchange Rule 590, its Minor Rule
Violation Fine Plan (``Plan''). On November 23, 2004, Amex filed
Amendment No. 1 to the proposed rule change. The proposed rule change,
as amended, was published for comment in the Federal Register on
December 22, 2004.\3\ The Commission received no comments regarding the
proposal.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 50871 (December 16,
2004), 69 FR 76801.
---------------------------------------------------------------------------
The Exchange proposed to make the following actions subject to its
Plan:
Failure to comply with trade reporting requirements for
options (Amex Rule 992);
Violation of Exchange rules regarding the deactivation of
quote assist as it pertains to options (Amex Rules 950(g), Commentary
.01 and 950-ANTE(g), Commentary .01);
Violation of Exchange rules regarding the Options Linkage
Program relating to the responding to, and receiving of, Linkage Orders
(Amex Rule 941(d) and (e)), Avoidance and Satisfaction of Trade-
Throughs (Amex Rule 942(a)), and Locked Markets (Amex Rule 943);
Violation of Exchange policy regarding affirmative
determination of the availability for borrowing of shares of Amex-
listed issues prior to effecting short sale transactions (Circular 90-
25); and
Effecting or causing to be effected a transaction outside
of business hours through the Intermarket Trading System (Amex Rules 1,
100, and 233).
The Exchange also proposed to amend the Plan as follows:
Expand the requirement of reporting trade comparison data
(Part 2(d)(3) of Amex Rule 590) to include all transactions effected on
the Exchange and to relocate such rule to Part 1(g) of Amex Rule 590 so
as to subject it to Amex Enforcement Department action rather than Amex
Floor Official action; and
Revise Part 3 of Amex Rule 590 to reflect the current
filing schedule for the Form 50 (Short Position), which is now also
required to be filed at or about the end of the month for selected
derivative products.
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 proposal is consistent
with Section 6(b)(5) of the Act \5\ which requires that the rules of an
exchange be designed to promote just and equitable principles of trade,
to remove impediments and to 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 also believes that
the proposal is consistent with Sections 6(b)(1) \6\ and 6(b)(6) \7\ of
the Act which require that the rules of an exchange enforce compliance
and provide appropriate discipline for violations of Commission and
Exchange rules. In addition, because Amex Rule 590 provides procedural
rights to a person fined under the Plan to contest the fine and permit
a hearing on the matter, the Exchange believes the proposal provides a
fair procedure for the disciplining of members and persons associated
with members, consistent with Sections 6(b)(7) \8\ and 6(d)(1) \9\ of
the Act.
---------------------------------------------------------------------------
\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).
\6\ 15 U.S.C. 78f(b)(1).
\7\ 15 U.S.C. 78f(b)(6).
\8\ 15 U.S.C. 78f(b)(7).
\9\ 15 U.S.C. 78f(d)(1).
---------------------------------------------------------------------------
Finally, the Commission finds that the proposal 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 \10\ which governs minor rule violation plans. The
Commission believes that these changes to Amex's Plan will strengthen
its 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.
---------------------------------------------------------------------------
\10\ 17 CFR 240.19d-1(c)(2).
---------------------------------------------------------------------------
In approving this proposed rule change, the Commission in no way
[[Page 6742]]
minimizes the importance of compliance with Amex rules and all other
rules subject to the imposition of fines under the Exchange's Plan. The
Commission believes that the violation of any self-regulatory
organization's rules, as well as Commission rules, is a serious matter.
However, the Exchange's Plan 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 Amex will
continue to conduct surveillance with due diligence and make a
determination based on its findings, whether fines of more or less than
the recommended amount are appropriate for violations under the Plan,
on case-by-case basis, or a violation requires formal disciplinary
action.
It is therefore ordered, pursuant to section 19(b)(2) of the Act
\11\ and Rule 19d-1(c)(2) under the Act,\12\ that the proposed rule
change (SR-Amex-2004-72), as amended, be, and hereby is, approved and
declared effective.
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\11\ 15 U.S.C. 78s(b)(2).
\12\ 17 CFR 240.19d-1(c)(2).
\13\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(44).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-495 Filed 2-7-05; 8:45 am]
BILLING CODE 8010-01-P
