Skip to Content

Notice

Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the Philadelphia Stock Exchange, Inc. Relating to Registration of Trading Floor Personnel

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble January 28, 2000.

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 November 19, 1999, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) Start Printed Page 5923filed with the Securities and Exchange Commission (“SEC” or “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 Phlx proposes to adopt new Phlx Rule 620, Trading Floor Registration. The proposed rule requires that all trading floor personnel be registered with the Exchange; trading floor personnel successfully complete specified examinations,[3] and all member/participant organizations notify the Exchange of any change in the status of such personnel. The Exchange also is proposing to amend Regulation 7(b), Required Filing for Floor Member Firm Employee Status Notices with the Exchange, to include members, non-members and clerks to be consistent with the test of new Phlx Rules 620.[4] Proposed new language is in italics; proposed deletions are in brackets.

* * * * *

Rule 620. Trading Floor Registration

(a) Trading Floor Member Registration—Registered Options Trader on any Exchange trading floor must register as such with the Exchange by completing the appropriate form(s) (with period updates submitted by the firm, as determined by the Exchange) and successfully complete the appropriate floor trading examination(s), if prescribed by the Exchange, in addition to requirements imposed by other Exchange rules. The Exchange may also require periodic examinations due to changes in trading rules, products or automated systems. Following the termination of, or the initiation of a change in the trading status of any such members/participant who has been issued an Exchange access card and a trading floor badge, the appropriate Exchange form must be completed, approved and dated by a firm principal, officer, or member of the firm with authority to do so, and submitted to the appropriate Exchange department as soon as possible, but no later than 9:30 A.M. the next business day by the member/participant organization employer. Every effort should be made to obtain the person's access card and trading floor badge and to submit these to the appropriate Exchange department.

(b) Non-member/Clerk Registration—All trading floor personnel, including clerks, interns, stock execution clerks and any other associated person, of member/participant organizations not required to register pursuant to Rule 620(a) must register as such with the Exchange by completing the appropriate form(s) for non-registered persons (with periodic updates submitted by the firm, as determined by the Exchange). Further, the Exchange may require successful completion of an examination, in addition to requirements imposed by other Exchange rules. The Exchange may also require periodic examinations due to changes in trading rules, products or automated systems. Following the termination of, or the initiation of a change in the status of any such personnel of a member/participant organization who has been issued an Exchange access card and a trading floor badge, the appropriate Exchange form must be completed, approved and dated by a firm principal, officer, or member of the firm with authority to do so, and submitted to the appropriate Exchange department as soon as possible, but no later than 9:30 A.M. the next business day by the member/participant organization employer. Every effort should be made to obtain the person's access card and trading floor badge and to submit these to the appropriate Exchange department.

* * * * *

Regulation 7

(a) No Change

(b) Required Filing for Floor Member Firm Employee Status Notices with the Exchange

Following the termination of, or the initiation of a change in the trading status of any member/participant or any non-member/clerk and trading floor personnel including clerks, interns, stock execution clerks and any other associated person, of member/participant organizations [employee of a member/participant firm] who have been issued an Exchange access card and trading floor badge, the appropriate Exchange form must be completed, approved and dated by a firm principal, officer, or member of the firm with authority to do so, and [a completed “Status Notice” must be] submitted to the appropriate Exchange Department [Director of Regulatory Services of the exchange] as soon as possible, but no later than 9:30 A.M. the next business day by the member/participant organization employer. Further, every effort should be made to obtain the employee's access card and trading floor badge and to submit these to the appropriate Exchange Department [Security Department].

1st Occurrence$100.00
2nd Occurrence$200.00
3rd Occurrence and ThereafterSanction is discretionary with the Business Conduct Committee.
* * * * *

II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

In its filing with Commission, the Exchange 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 III 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

The proposed rule change requires, in a single Exchange rule, all floor personnel to be registered with the Exchange and all member/participant organizations to notify the Exchange of any change in the status of such personnel. The Phlx believes that this will enable the Exchange to more efficiently monitor individuals on the Exchange's trading floors, as well as their current status.

Currently, Regulation 7(b) governs the termination of, or the initiation of change in the trading status of, an employee of a member/participant firm who has been issued an exchange access card and trading floor badge. New Phlx Rule 620 codifies Regulation 7(b) into a more comprehensive Exchange Rule. Phlx Rule 620(a) sets forth a comprehensive rule that addresses registration, examinations, termination Start Printed Page 5924and change in status of trading floor members, which includes floor brokers, specialists, and market makers, including Registered Options Traders on any Exchange trading floor. Phlx Rule 620(b) addresses non-member/clerk registration of all trading floor personnel, including clerks, interns, stock execution clerks and any other associated persons of member/participant organizations who are not required to be registered pursuant to Phlx Rule 620(a).[5]

The exchange believes that the proposal to require all floor personnel to be registered with the Exchange and to require all member/participant organizations to notify the exchange of any change in the status of such personnel is consistent with Section 6 of the Act,[6] in general, and with Sections 6(b)(5) [7] and 6(c)(3)(B),[8] in particular. Specifically, new Phlx Rule 620 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 by ensuring that all trading floor personnel are properly registered and, thus, monitored. In addition, Section 6(c)(3)(B) [9] provides that a national securities exchange may examine and verify the qualifications of an applicant to become a person associated with a member in accordance with procedures established by the rules of the Exchange and require any person associated with a member, or any class of such persons, to be registered with the Exchange in accordance with procedures so established.

B. Self-Regulatory Organization's Statement on Burden on Competition

The Exchange does not believe that the proposed rule will impose any inappropriate 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 either solicited or received.

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 (ii) as to which the self-regulatory organization consents, the Commission will:

A. by order approve the 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 20540-0609. 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 at the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of the Exchange. All submissions should refer to File No. SR-Phlx-99-46 and should be submitted by February 28, 2000.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[10]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  The Phlx's current practice is to administer an examination to specialists, market makers and other floor trading personnel before giving them access to the trading floor. This examination, developed by the Phlx, is undergoing conversion from a paper test to a computer-generated test of 100 random questions covering Phlx trading rules. Although the Phlx does not currently administer an examination to clerks and other “non-member” floor personnel, the Phlx will explore the feasibility of such a test during the current year. Telephone conversion among Adrienne Hart, First Vice President, Regulatory Group, Cynthia Hoekstra, Counsel, Phlx, and Joseph Morra and Geoffrey Pemble, Attorneys, Division of Market Regulations, SEC, December 10, 1999.

Back to Citation

4.  Regulation 7 was enacted pursuant to Phlx Rule 60, Assessments for Breach of Regulations. See Securities Exchange Act Release No. 27629 (January 16, 1990), 55 FR 2469 (Jan. 24, 1990) (File No. SR-Phlx-90-1).

Back to Citation

5.  The Exchange presently requires the completion of forms and procedures for registering new floor members pursuant to various Phlx Rules, including Rule 202, Registrant (Specialists); Rule 214, Violations of Rules (Specialists); Rule 604, Registration and Termination of Registered Person; Rule 623, Fingerprinting; Rule 1020, Registration and Functions of Options Specialists; Rule 1014, Obligations and Restrictions Applicable to Specialists and Registered Options Traders; and Rule 1061, Registration of Floor Brokers.

Back to Citation

[FR Doc. 00-2662 Filed 2-4-00; 8:45 am]

BILLING CODE 8010-01-M