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Notice

Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the Boston Stock Exchange, Inc. Amending its Minor Rule Violation Plan

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Information about this document as published in the Federal Register.

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Start Preamble June 16, 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 June 1, 1999, the Boston Stock Exchange, Inc. (“BSE” or “Exchange”) 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 prepared by the Exchange. On March 24, 2000, the BSE submitted Amendment No. 1 to the proposed rule change.[3] On May 30, 2000, the BSE submitted Amendment No. 2 to the proposed rule change.[4] The Commission is publishing this notice to solicit Start Printed Page 39216comments on the proposed rule change form interested persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

The BSE seeks to amend the Summary Fine Schedule of the Minor Rule Violation Plan by adding the violation of “Failure to Attend Mandatory BEACON Training Sessions” and amending the prohibition titled “Violation of the Exchange Smoking Policy” to prohibit all forms of tobacco use. In addition, the Exchange proposes to incorporate the BSE's Minor Rule Violation Plan into the Boston Stock Exchange Guide, which is its rulebook.

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

In its filing with the Commission, the BSE 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 BSE 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 BSE proposes to amend the Exchange's Minor Rule Violation Plan to include the failure to attend Market Performance Committee BEACON training sessions and to change the prohibition titled “Violation of the Exchange Smoking Policy” to prohibit all forms of tobacco use. The proposed addition to the Summary Fine Schedule will enable the Exchange to ensure that all floor members are fully trained on the BEACON system following enhancements for the handling of orders or the release of new versions of BEACON software. The Exchange believes that this will ensure that all customer orders are accorded the same professional attention by all specialists. The Exchange proposes a written warning for an initial offense, a $50 fine for the second offense, and a $100 fine for subsequent offenses. In addition, the Exchange proposes to prohibit all forms of tobacco use on the Equity Trading Floor. Currently, only smoking is prohibited.

The Exchange also proposes to incorporate the BSE's Minor Rule Violation Plan into the Boston Stock Exchange Guide, which is its rulebook. The Plan provides an alternative method for the Exchange to use to discipline members who commit minor rule violations.

2. Statutory Basis

The BSE believes the proposed rule change is consistent with Section 6(b)(5) [5] of the Act in that it is designed to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities; and is not designed to permit unfair discrimination between customers, issuers, brokers or dealers. In addition, the Exchange believes that the proposal is consistent with Section 6(b)(6) [6] of the Act, which requires that its members and persons associated with its members be appropriately disciplined for violations of the rules of the exchange.[7]

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

The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others

The Exchange has neither solicited nor received comments on the proposed rule change.

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 such 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 is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549-0609. 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 in the Commission's Public Reference Room. Copies of such filing will also be available for inspection and copying at the principal office of the BSE. All submissions should refer to File No. SR-BSE-99-07 and should be submitted by July 14, 2000.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[8]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  In Amendment No. 1, the BSE proposes to incorporate the BSE's Minor Rule Violation Plan into the Boston Stock Exchange Guide, which is its rulebook. See letter with enclosures from William P. Cummings, Manager of Legal and Regulation, BSE, to Richard Strasser, Assistant Director, Division of Market Regulation (“Division”), Commission, dated March 12, 2000 (“Amendment No. 1”).

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4.  In Amendment No. 2, the BSE seeks to amend the Summary Fine Schedule of the Minor Rule Violation Plan to prohibit all forms of tobacco use. See letter with enclosures from John A. Boese, Assistant Vice President, Rule Development and Market Structure, BSE, to Richard Strasser, Assistant Director, Division, Commission, dated May 26, 2000 (“Amendment No. 2”).

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7.  The Exchange added this statutory basis for the proposed rule change on June 5, 2000. Telephone conversation between John A. Boese, Assistant Vice President, Rule Development and Market Structure, BSE, and Joseph Corcoran, Attorney, Division, Commission, on June 5, 2000.

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[FR Doc. 00-15902 Filed 6-22-00; 8:45 am]

BILLING CODE 8010-01-M