

[Federal Register: June 19, 2006 (Volume 71, Number 117)]
[Notices]               
[Page 35314-35315]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19jn06-95]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53973; File No. SR-Amex-2006-34]

 
Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Approving Proposed Rule Change Relating to Minor Rule Violations and 
the Bunching of Odd-Lot Orders

June 12, 2006.
    On April 12, 2006, 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 include violations of its rule governing the 
bunching of odd-lot orders (Amex Rule 208) in Amex Rule 590, its Minor 
Rule Violation Plan (``Plan''). The proposed rule change was published 
for comment in the Federal Register on May 10, 2006.\3\ The Commission 
received no comments regarding the proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 53749 (May 2, 2006), 
71 FR 27298.
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    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\ In 
particular, the Commission believes that the proposal is consistent 
with Section 6(b)(5) of the Act,\5\ because handling violations of Amex 
Rule 208 pursuant to the Plan would enable prompt resolution of such 
violations in the interest of protecting investors and the public 
interest. The Commission also believes that the proposal is consistent 
with Sections 6(b)(1) and 6(b)(6) of the Act,\6\ which require that the 
rules of an exchange enforce compliance with, and provide appropriate 
discipline for, violations of Commission and Exchange rules. In 
addition, because existing Amex Rule 590 provides procedural rights to 
a person fined under the Plan to contest the fine and permits a hearing 
on the matter, the Commission believes the Plan, as amended by this 
proposal, provides a fair procedure for the disciplining of members and 
persons associated with members, consistent with Sections 6(b)(7) and 
6(d)(1) of the Act.\7\
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    \4\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 15 U.S.C. 78f(b)(1) and 78f(b)(6).
    \7\ 15 U.S.C. 78f(b)(7) and 78f(d)(1).
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    Finally, the Commission finds that the proposal is consistent with 
the public interest, the protection of investors, or otherwise in 
furtherance of the purposes of the Act, as required by Rule 19d-1(c)(2) 
under the Act \8\ which governs minor rule violation plans. The 
Commission believes that the change to the Plan will strengthen the 
Exchange's ability to carry out its oversight and enforcement 
responsibilities as a self-regulatory organization in cases where full 
disciplinary proceedings are unsuitable in view of the minor nature of 
the particular violation.
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    \8\ 17 CFR 240.19d-1(c)(2).
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    In approving this proposed rule change, the Commission in no way 
minimizes the importance of compliance with Amex rules and all other 
rules subject to the imposition of fines under the Plan. The Commission 
believes that the violation of any self-regulatory organization's 
rules, as well as Commission rules, is a serious matter. However, the 
Plan provides a reasonable means of addressing rule violations that do 
not rise to the level of requiring formal disciplinary proceedings, 
while providing greater flexibility in handling certain violations. The 
Commission expects that Amex will continue to conduct surveillance with 
due diligence and make determinations based on its findings, on a case-
by-case basis, as to whether a fine of more or less than the 
recommended amount is appropriate for a violation of Amex Rule 208 
under the Plan or whether such a violation requires formal disciplinary 
action.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\9\ and Rule 19d-1(c)(2) under the Act,\10\ that the proposed rule 
change (SR-Amex-2006-34) be, and hereby is, approved and declared 
effective.
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    \9\ 15 U.S.C. 78s(b)(2).
    \10\ 17 CFR 240.19d-1(c)(2).


[[Page 35315]]


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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(44).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-9579 Filed 6-16-06; 8:45 am]

BILLING CODE 8010-01-P
