Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving Proposed Rule Change Pertaining to the Imposition of Fines for Minor Rule Violations, 40646-40647 [E8-16061]
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Federal Register / Vol. 73, No. 136 / Tuesday, July 15, 2008 / Notices
or otherwise in furtherance of the
purposes of the Act.
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.
Comments may be submitted by any of
the following methods:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–16060 Filed 7–14–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–58119; File No. SR-CBOE–
2008–53]
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–CBOE–2008–69 on the
subject line.
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Order Approving
Proposed Rule Change Pertaining to
the Imposition of Fines for Minor Rule
Violations
mstockstill on PROD1PC66 with NOTICES
Paper Comments
July 8, 2008.
On May 19, 2008, the Chicago Board
Options Exchange, Incorporated
• Send paper comments in triplicate
(‘‘CBOE’’ or ‘‘Exchange’’) filed with the
to Secretary, Securities and Exchange
Securities and Exchange Commission
Commission, 100 F Street, NE.,
(‘‘Commission’’), pursuant to Section
Washington, DC 20549–1090.
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
All submissions should refer to File
thereunder,2 a proposed rule change to
Number SR–CBOE–2008–69. This file
amend CBOE Rule 17.50 (Imposition of
number should be included on the
subject line if e-mail is used. To help the Fines for Minor Rule Violations) and to
revise the provisions of CBOE
Commission process and review your
17.50(g)(1) (Violations of Position Limits
comments more efficiently, please use
only one method. The Commission will Rules). The proposed rule change was
post all comments on the Commission’s published for comment in the Federal
Register on June 5, 2008.3 The
Internet Web site (https://www.sec.gov/
Commission received no comments
rules/sro.shtml). Copies of the
regarding the proposal. This order
submission, all subsequent
approves the proposed rule change.
amendments, all written statements
The proposal would, in connection
with respect to the proposed rule
with any member or customer who
change that are filed with the
exceeds the Exchange’s position limit in
Commission, and all written
accordance with CBOE Rule 4.11,
communications relating to the
increase the fine levels specified in the
proposed rule change between the
Minor Rule Violation Plan (‘‘MRVP’’);
Commission and any person, other than consolidate individual members,
those that may be withheld from the
member organizations, and customers
public in accordance with the
into one category; and lengthen the
provisions of 5 U.S.C. 552, will be
surveillance period from a 12-month
available for inspection and copying in
period to a rolling 24-month period.
the Commission’s Public Reference
The Commission finds that the
Room on official business days between proposed rule change is consistent with
the requirements of the Act and the
the hours of 10 a.m. and 3 p.m. Copies
rules and regulations thereunder
of such filing also will be available for
applicable to a national securities
inspection and copying at the principal
exchange.4 In particular, the
office of the Exchange. All comments
received will be posted without change; Commission believes that the proposal
is consistent with Section 6(b)(5) of the
the Commission does not edit personal
identifying information from
10 17 CFR 200.30–3(a)(12).
submissions. You should submit only
1 15 U.S.C. 78s(b)(1).
information that you wish to make
2 17 CFR 240.19b–4.
available publicly. All submissions
3 See Securities Exchange Act Release No. 57883
should refer to File Number SR–CBOE–
(May 29, 2008), 73 FR 32065.
4 In approving this proposed rule change, the
2008–69 and should be submitted on or
Commission notes that it has considered the
before August 5, 2008.
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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15:01 Jul 14, 2008
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Act,5 which requires that the rules of an
exchange be designed to promote just
and equitable principles of trade, to
facilitate transactions in securities, 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 further
believes that CBOE’s proposal is
consistent with Sections 6(b)(1) and
6(b)(6) of the Act,6 which require that
the rules of an exchange enforce
compliance with, and provide
appropriate discipline for, violations of
Commission and Exchange rules. In
addition, because existing CBOE Rule
17.50 provides procedural rights to a
person fined under the MRVP to contest
the fine and permits a hearing on the
matter, the Commission believes that
the MRVP, as amended by this proposal,
provides a fair procedure for the
disciplining of members and persons
associated with members, consistent
with Sections 6(b)(7) and 6(d)(1) of the
Act.7 In addition, 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,8 which
governs minor rule violation plans. The
Commission believes that the proposed
rule change should strengthen the
Exchange’s ability to carry out its
oversight and enforcement
responsibilities as an SRO 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
minimizes the importance of
compliance with CBOE rules and all
other rules subject to the imposition of
fines under the MRVP. The Commission
believes that the violation of any SRO
rules, as well as Commission rules, is a
serious matter. However, the MRVP
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 CBOE would 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 CBOE MRVP or
whether a violation requires formal
5 15
U.S.C. 78f(b)(5).
U.S.C. 78f(b)(1) and 78f(b)(6).
7 15 U.S.C. 78f(b)(7) and 78f(d)(1).
8 17 CFR 240.19d–1(c)(2).
6 15
E:\FR\FM\15JYN1.SGM
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Federal Register / Vol. 73, No. 136 / Tuesday, July 15, 2008 / Notices
disciplinary action under CBOE Chapter
XVII.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act 9 and Rule
19d–1(c)(2) under the Act,10 that the
proposed rule change (SR-CBOE–2008–
53) be, and hereby is, approved and
declared effective.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–16061 Filed 7–14–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58118; File No. SR–FINRA–
2008–030]
Self-Regulatory Organizations:
Financial Industry Regulatory
Authority, Inc.; Notice of Filing of
Proposed Rule Change To Adopt
FINRA Rule 3130 (Annual Certification
of Compliance and Supervisory
Processes) in the Consolidated FINRA
Rulebook
July 8, 2008.
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 June 18,
2008, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) (f/k/a
National Association of Securities
Dealers, Inc. (‘‘NASD’’)) 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
substantially prepared by FINRA. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
mstockstill on PROD1PC66 with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing to adopt NASD
Rule 3013 (Annual Certification of
Compliance and Supervisory Processes)
and IM–3013 (Annual Compliance and
Supervision Certification) as a FINRA
rule in the consolidated FINRA
rulebook without material change and to
delete the corresponding provisions in
Incorporated NYSE Rule 342.30 and
NYSE Rule Interpretations 311(b)(5)/04
9 15
U.S.C. 78s(b)(2).
CFR 240.19d–1(c)(2).
11 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.
10 17
VerDate Aug<31>2005
15:01 Jul 14, 2008
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through /05 and 342.30(d)/01 through
(e)/01.3 The proposed rule change
would renumber NASD Rule 3013 and
IM–3013 as FINRA Rule 3130 in the
consolidated FINRA rulebook. The text
of the proposed rule change is at
FINRA’s Web site at https://
www.finra.org, at FINRA’s principal
office, 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,
FINRA 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. FINRA 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
As part of the process of developing
the new consolidated rulebook (the
‘‘Consolidated FINRA Rulebook’’),4
FINRA is proposing to adopt NASD
Rule 3013 (Annual Certification of
Compliance and Supervisory Processes)
and IM–3013–1 (Annual Compliance
and Supervision Certification) as a
FINRA Rule in the Consolidated FINRA
Rulebook.
NASD Rule 3013 and Incorporated
NYSE Rule 342 require each member to
designate one or more principals to
serve as a chief compliance officer
(‘‘CCO’’). These Rules further require
that the chief executive officer(s)
(‘‘CEO’’) certify annually that the
member has in place processes to
establish, maintain, review, modify and
test policies and procedures reasonably
designed to achieve compliance with
applicable NASD (or NYSE) rules and
federal securities laws and regulations.
The certification includes not only a
statement that the member has in place
3 See infra note 4 regarding ‘‘Incorporated NYSE
Rules.’’
4 The current FINRA rulebook consists of two sets
of rules: (1) NASD Rules and (2) rules incorporated
from NYSE (‘‘Incorporated NYSE Rules’’) (together
referred to as the ‘‘Transitional Rulebook’’). The
Incorporated NYSE Rules apply only to those
members of FINRA that are also members of the
NYSE (‘‘Dual Members’’). Dual Members also must
comply with NASD Rules. For more information
about the rulebook consolidation process, see
FINRA Information Notice, March 12, 2008
(Rulebook Consolidation Process).
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40647
certain compliance processes, but also
that the CEO(s) has conducted one or
more meetings with the CCO(s) in the
preceding 12 months to discuss the
processes. Incorporated NYSE Rule 342
and NASD IM–3013 explain that the
mandated meetings between the CEO(s)
and CCO(s) must include a discussion of
the member’s compliance efforts to date
and identify and address significant
compliance problems and plans for
emerging business areas. NASD IM–
3013 contains additional guidance,
including setting forth the expertise that
is expected of a CCO. The same
expertise requirements are also found in
Incorporated NYSE Rule Interpretation
342.30.
There currently are four differences in
the rules. First, NASD IM–3013 requires
that the member provide to its board of
directors and audit committees (or
equivalent bodies) the report that
evidences the processes to which the
CEO(s) certifies either prior to execution
of the certification or at the earlier of
their next scheduled meetings or within
45 days of certification. The
Incorporated NYSE rules require
submission of the report to those bodies
prior to certification. FINRA does not
intend to require the board of directors
or audit committee to review or
consider the report as a condition to the
CEO executing the certification; rather,
FINRA intends the provision to ensure
that those governing bodies remain
informed of this aspect of the member’s
compliance system in the context of
their overall responsibility for
governance and internal controls of the
member for which they serve.
Accordingly, the proposed rule change
would maintain the NASD rule
requirements.
Second, the current rules differ in the
certification deadline. Incorporated
NYSE Rule 342.30 requires certification
as part of the submission of a member’s
annual compliance report, which is due
by April 1 of each year. NASD Rule
3013 requires certification not later than
the anniversary of the prior year’s
certification. And while NASD allowed
members to execute their first
certification no later than April 1, 2006,
to accommodate Dual Members, many
FINRA-only firms executed their first
certification earlier than that and thus
have differing anniversary dates.
Moreover, new members are required to
execute their first certification within a
year of approval for membership;
therefore some firms necessarily are on
a cycle that does not correspond to
April 1. The proposed rule change
would maintain the NASD rule deadline
to provide firms the flexibility to certify
on a schedule that meets with their
E:\FR\FM\15JYN1.SGM
15JYN1
]]>Agencies
[Federal Register Volume 73, Number 136 (Tuesday, July 15, 2008)]
[Notices]
[Pages 40646-40647]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-16061]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58119; File No. SR-CBOE-2008-53]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Order Approving Proposed Rule Change Pertaining to the
Imposition of Fines for Minor Rule Violations
July 8, 2008.
On May 19, 2008, the Chicago Board Options Exchange, Incorporated
(``CBOE'' 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 CBOE Rule 17.50
(Imposition of Fines for Minor Rule Violations) and to revise the
provisions of CBOE 17.50(g)(1) (Violations of Position Limits Rules).
The proposed rule change was published for comment in the Federal
Register on June 5, 2008.\3\ The Commission received no comments
regarding the proposal. This order approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 57883 (May 29,
2008), 73 FR 32065.
---------------------------------------------------------------------------
The proposal would, in connection with any member or customer who
exceeds the Exchange's position limit in accordance with CBOE Rule
4.11, increase the fine levels specified in the Minor Rule Violation
Plan (``MRVP''); consolidate individual members, member organizations,
and customers into one category; and lengthen the surveillance period
from a 12-month period to a rolling 24-month period.
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 facilitate transactions in securities, 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 further believes that CBOE's proposal is consistent with
Sections 6(b)(1) and 6(b)(6) of the Act,\6\ which require that the
rules of an exchange enforce compliance with, and provide appropriate
discipline for, violations of Commission and Exchange rules. In
addition, because existing CBOE Rule 17.50 provides procedural rights
to a person fined under the MRVP to contest the fine and permits a
hearing on the matter, the Commission believes that the MRVP, as
amended by this proposal, provides a fair procedure for the
disciplining of members and persons associated with members, consistent
with Sections 6(b)(7) and 6(d)(1) of the Act.\7\ In addition, 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,\8\ which governs minor rule violation plans. The Commission
believes that the proposed rule change should strengthen the Exchange's
ability to carry out its oversight and enforcement responsibilities as
an SRO in cases where full disciplinary proceedings are unsuitable in
view of the minor nature of the particular violation.
---------------------------------------------------------------------------
\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) and 78f(b)(6).
\7\ 15 U.S.C. 78f(b)(7) and 78f(d)(1).
\8\ 17 CFR 240.19d-1(c)(2).
---------------------------------------------------------------------------
In approving this proposed rule change, the Commission in no way
minimizes the importance of compliance with CBOE rules and all other
rules subject to the imposition of fines under the MRVP. The Commission
believes that the violation of any SRO rules, as well as Commission
rules, is a serious matter. However, the MRVP 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
CBOE would 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 CBOE MRVP or whether a violation requires formal
[[Page 40647]]
disciplinary action under CBOE Chapter XVII.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act
\9\ and Rule 19d-1(c)(2) under the Act,\10\ that the proposed rule
change (SR-CBOE-2008-53) be, and hereby is, approved and declared
effective.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78s(b)(2).
\10\ 17 CFR 240.19d-1(c)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(44).
---------------------------------------------------------------------------
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-16061 Filed 7-14-08; 8:45 am]
BILLING CODE 8010-01-P
