Skip to Content

Notice

Self-Regulatory Organizations; Order Approving Proposed Rule Change and Amendment No. 1 Thereto by the American Stock Exchange LLC Relating to Mandatory Continuing Education for All floor Members and Mandatory Continuing Education and Initial Test Requirements for Floor Clerks of Members and Member Firms

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 July 30, 2003.

On February 3, 2003, 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 revise its performance evaluation and allocations procedures. On May 21, 2003, the Amex amended the proposed rule change.[3]

Under the proposed rule, Amex proposes to adopt Amex rule 359 titled the Mandatory Continuing Education for all Floor Members and Mandatory Continuing Education and Initial Test Requirements for Floor Clerks of Members and Member Firms. Specifically, newly hired floor clerks with no previous floor experience will be tested within a three-month on-the-job training period. Additionally, newly-hired specialist clerks with no previous experience as specialists or specialist clerks will be subject to the training and exam requirement of a floor clerk. Furthermore, a specialist clerk will be required to complete the on-the-job and classroom training related to the job of specialist clerk. The proposed rule change also institutes an annual, mandatory continuing education program for members and their employees. Failure to attend a mandatory continuing education session may result in a fine being imposed under the General Rule Violations Section of the Exchange's Minor rule Violation Fine System. Finally, the continuing education program will be financed by levying an annual fee of $50 for each participant.

The proposed rule change, as amended, was published for comment in the Federal Register on June 25, 2003.[4] The Commission received no comments on the proposal.

After careful review, the Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.[5] Specifically, the Commission finds that the proposed rule change promotes the objectives of Section 6(b)(5) of the Act,[6] which requires among other things, that the rules of the Exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and national market system, and in general, to protect investors and the public interest. In addition, the Commission finds that the proposed rule change is consistent with Section 6(b)(6) because it provides a sanction under Amex's Minor Rule Violation Fine System for failure to comply with the continuing education requirement.

The Commission also finds that the proposed rule change is consistent with the requirements of Section 6(c)(3)(B) because it provides the Exchange with a means to measure a newly hired floor clerk or specialist clerk's ability and qualifications as well as to ensure that Amex members and persons associated with members meet standards of training, experience, and competence. By requiring all current members and their employees to attend annual mandatory continuing education training, the Exchange assists the members and their employees admitted to the Exchange's trading floor to understand critical regulatory and operational issues affecting the exchange and the securities industry. The Commission believes that Amex's proposal to require members and their employees to participate in an education program before being permitted to act as members is appropriate and consistent with Section 6(c)(3)(B).

It is therefore ordered, pursuant to Section 19(b)(2) of the Act,[7] that the proposed rule change (SR-Amex-2003-06), as amended, be, and hereby is, approved.

Start Signature

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

Margaret H. McFarland

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  See Letter from Ivonne L. Natal, Associate General Counsel, Amex, to Katherine A. England, Assistant Director, Division of Market Regulation Commission, dated May 20, 2003 (“Amendment No. 1”). In Amendment No. 1, the Exchange replaced the original filing in its entirety. The exchange stated it anticipates implementing proposed Rule 359 within eight months of approval by the Commission.

Back to Citation

4.  See Securities Exchange Act Release No. 48041 (June 17, 2003), 68 FR 37882 (June 25, 2003).

Back to Citation

5.  In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).

Back to Citation

[FR Doc. 03-20027 Filed 8-5-03; 8:45 am]

BILLING CODE 8010-01-M