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Self-Regulatory Organizations; Pacific Exchange, Inc.; Order Granting Approval of Proposed Rule Change and Amendment No. 1 Thereto by the Pacific Exchange, Inc. Relating to the Exchange's Rules Under the Minor Rule Plan

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Information about this document as published in the Federal Register.

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Start Preamble August 22, 2003.

On April 15, 2003, the Pacific Exchange, Inc. (“PCX” 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 the Recommended Fine Schedule (“RFS”) of the Exchange's Minor Rule Plan (“MRP”) in order to increase the fines for Late Trade Reporting violations pursuant to PCX Rule 6.69(a). The Exchange amended the proposed rule change on June 6, 2003.

The proposed rule change, as amended, was published for comment in the Federal Register on July 17, 2003.[3] The Commission received no comments on the proposal.

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] and, in particular, the requirements of Section 6 of the Act [5] and the rules and regulations thereunder, and finds specifically that the proposed rule change is consistent with Section 6(b)(6) [6] of the Act. The Commission believes that the rule change should strengthen the ability of Start Printed Page 52066the Exchange to carry out its oversight and enforcement responsibilities as a self-regulatory organization. The rule should also aid the Exchange in carrying out its surveillance and enforcement functions.

In approving this proposed rule change, the Commission in no way minimizes the importance of compliance with PCX Rule 6.69(a), and all other rules subject to the imposition of fines under the Exchange's MRP. The Commission believes that the violation of any self-regulatory organization's rules, as well as Commission rules, is a serious matter. However, in an effort to provide the Exchange with greater flexibility in addressing certain violations, the Exchange's minor rule violation plan provides a reasonable means to address rule violations that do not rise to the level of requiring formal disciplinary proceedings. The Commission expects that the PCX will continue to conduct surveillance with due diligence, and make a determination based on its findings whether fines of more or less than the recommended amount are appropriate for violations of rules under the Exchange's minor rule violation plan, on a case by case basis, or if a violation requires formal disciplinary action.

It is therefore ordered, pursuant to section 19(b)(2) of the Act,[7] that the proposed rule change (SR-PCX-2003-17) be, and it hereby is, approved.

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.  See Securities Exchange Act Release No. 48158 (July 17, 2003), 68 FR 42449.

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

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[FR Doc. 03-22088 Filed 8-28-03; 8:45 am]

BILLING CODE 8010-01-P