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Notice

Self-Regulatory Organizations; Declaration of Effectiveness of American Stock Exchange LLC Fingerprinting Plan

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Start Preamble June 19, 2003.

On June 5, 2003, the American Stock Exchange LLC (“Amex” or “Exchange”) submitted to the Securities and Exchange Commission (“Commission” or “SEC”) an amended fingerprinting plan (“Amended Plan”) pursuant to Rule 17f-2(c) [1] under the Securities Exchange Act of 1934 (“Act”).[2] The Amended Plan [3] supersedes and replaces the Exchange's current fingerprinting plan.[4] The Exchange believes that the Amended Plan will be a significant improvement over the current Amex fingerprinting plan.

The Amended Plan establishes fingerprinting procedures in connection with the proposed amendment to Exchange Rules 340, Disapproval of Employees, and 341, Approval of Registered Employees and Officers, and adoption of new Exchange Rule 359, Application and Termination Forms (Forms U-4 and U-5). The proposed amendments to Exchange Rules 340 and 341 and the proposed adoption of Exchange Rule 359 provide for the electronic processing of the Uniform Application for Securities Industry Registration or Transfer (“Form U-4”) and the Uniform Termination Notice for Securities Industry Registration (“Form U-5”) by the National Association of Securities Dealers, Inc.”s (“NASD's”) Web Central Registration Depository (“Web CRD”) system [5] for all individuals required to be registered with or approved by the Exchange.[6] The Exchange believes that automating the review of registration applications and termination notices by transitioning all Forms U-4 and U-5 filings to Web CRD will enable the Exchange to perform more efficiently its regulatory responsibilities with respect to members and member organizations and, thereby, will ultimately enhance investor protection.

In connection with this electronic registration process, and pursuant to the Amended Plan, persons seeking registration with the Exchange will submit their fingerprints to NASD. NASD will process these fingerprints and submit them to the Attorney General. The Attorney General will, in turn, provide NASD with fingerprint processing results for the persons seeking registration, and the results will be provided to the members via Web CRD.

The Commission has reviewed the procedures detailed in the Amended Plan and believes that the Amended Plan is in the public interest and consistent with the protection of investors. The Amended Plan should significantly improve upon the efficiency of the Amex registration system by consolidating with the NASD the role of collecting and electronically displaying fingerprint information and the role of electronically collecting Form U-4 through the NASD's Web CRD system. Thus, the Commission declares the Amended Plan to be effective.

The Commission notes that securities industry fingerprinting procedures are in a state of flux due to rapidly advancing technology. In the event that an industry-wide technology standard is adopted or becomes prevalent and in the event that this Amended Plan substantially differs therefrom, the Commission may declare this Amended Plan ineffective. The Commission imposes these terms and conditions on the Amended Plan and deems that they are necessary and appropriate in the public interest, for the protection of investors, and otherwise in furtherance of the purposes of the Act pursuant to Rule 17f-2(c).[7]

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

Margaret H. McFarland,

Deputy Secretary.

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Exhibit A [9] —American Stock Exchange Fingerprint Plan

The American Stock Exchange LLC (“Exchange”) submits this Fingerprint Plan (“Plan”) pursuant to Rule 17f-2(c) under the Start Printed Page 38732Securities Exchange Act of 1934, as amended (“Act”). This Plan supersedes and replaces the Exchange's Fingerprint Plan approved by the Securities and Exchange Commission (“Commission”), on a permanent basis, on December 23, 1976 by Release No. 34-13105.

The purpose of this Plan is to facilitate compliance by members [10] of the Exchange with section 17(f)(2) of the Act and Rule 17f-2 thereunder by providing a facility for the fingerprints of individual partners, directors, officers and employees of Exchange members to be submitted to the Attorney General of the United States (“Attorney General”) and processed electronically.

The Exchange has established an arrangement with the National Association of Securities Dealers, Inc. (“NASD”) to permit all individuals that must be registered with, or approved by, the Exchange (“registered persons”) to be electronically registered with the Exchange through the NASD's Web Central Registration Depository system (“Web CRD”).[11] The Web CRD is a Web-based system that provides broker-dealers and their associated persons with “one-stop filing” with the Commission, NASD and other self-regulatory organizations and regulators. The Web CRD is operated by NASD and is used by participating regulators in connection with registering and licensing broker-dealers and their associated persons.

In connection with this registration process, persons seeking registration with the Exchange will submit their fingerprints to NASD. NASD will process these fingerprints and submit them to the Attorney General. The Attorney General will provide NASD with fingerprint processing results for the persons seeking registration, and the results will be provided to the members via Web CRD. NASD will notify the Exchange if the fingerprint processing results received by NASD for one of these registered persons contains information that would subject the person to a statutory disqualification. In such an instance, the Exchange will review the fingerprint processing results to determine the possible existence of a statutory disqualification as defined in Section 6(c) of the Act, and will take appropriate action, if necessary, concerning eligibility or continued eligibility of the individual for employment or association with an Exchange member. Copies of fingerprint processing results made available by NASD with respect to fingerprints submitted by the Exchange pursuant to this Plan will be maintained by the Exchange in accordance with the Exchange's Record Retention Plan on file with the Commission. Any maintenance of fingerprint records by the Exchange shall be for the Exchange's own administrative purposes, and the Exchange is not undertaking to maintain fingerprint records on behalf of Exchange members pursuant to Rule 17f-2(d)(2).

The Exchange will advise Exchange members and Exchange member applicants of the availability of fingerprint services and any fees charged by the Exchange and NASD in connection with those services and the processing of fingerprints pursuant to this Plan. The Exchange shall file any such Exchange fees with the Commission pursuant to section 19(b)(3)(A) of the Act.

The Exchange shall not be liable for losses or damages of any kind in connection with the fingerprinting services, as a result of a failure to follow, or properly to follow, the procedures described above, or as a result of lost or delayed fingerprint cards, fingerprint records, or fingerprint processing results, or as a result of any action by the Exchange or the Exchange's failure to take action in connection with this Plan.

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Footnotes

3.  Attached hereto as Exhibit A.

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4.  The Exchange's current fingerprinting plan was approved by the Commission on December 23, 1976. See Securities Exchange Act Release No. 13105, 42 FR 753 (January 4, 1977).

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5.  The Web CRD is a Web-based system that provides broker-dealers and their associated persons with “one-stop filing” with the Commission, NASD and other self-regulatory organizations and regulators. The Web CRD is operated by NASD and is used by participating regulators in connection with registering and licensing broker-dealers and their associated persons.

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6.  See Securities Exchange Act Release No. 48067 (File No. SR-Amex-2003-48) (effective on filing proposal related to amendments to Exchange Rules 340 and 341, and the adoption of Exchange Rule 359, filed May 22, 2003), and Securities Exchange Act Release No. 48066 (File No. SR-Amex-2003-49) (effective on filing proposal related to fee schedule changes for Form U-4 and Form U-5 processing, filed May 27, 2003).

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8.  17 CFR 200.30-3(a)(17)(iii).

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9.  The Exchange requested that the Commission make a technical, non-substantive change to the Amended Plan language concerning the attachment of copies of certain Commission releases to the Amended Plan. Teleconference between William Floyd-Jones, Associate General Counsel, Exchange, and Christopher B. Stone, Special Counsel, Division of Market Regulation, Commission (June 18, 2003).

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10.  As used herein, the term “member” shall have the same meaning as set forth in section 3(a)(3)(A) of the Securities Exchange Act of 1934.

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11.  See Exchange Rules 340, 341 and 359, as amended.

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[FR Doc. 03-16393 Filed 6-27-03; 8:45 am]

BILLING CODE 8010-01-P