SEC Open Meeting Agenda
|Item 1:||Fair Administration and Governance of Self-Regulatory Organizations; Disclosure and Regulatory Reporting by Self-Regulatory Organizations; Recordkeeping Requirements for Self-Regulatory Organizations; Ownership and Voting Limitations for Members of Self-Regulatory Organizations; Ownership Reporting Requirements for Members of Self-Regulatory Organizations; Listing and Trading by a Self-Regulatory Organization of Affiliated Securities|
Office: Division of Market Regulation
Staff: Geraldine Idrizi (Governance Standards Proposal); Susie Cho or Leah Mesfin (Transparency Proposal); Richard Holley (SRO Reporting Proposal); Sonia Trocchio (SRO Self-Listing Proposal, SRO Ownership Proposal, and Books and Records Proposal); and Christopher Stone (Concept Release)
|Item 2:||Leslie A. Arouh|
Office: Division of Investment Management
Staff: Office of the General Counsel
The Commission will consider whether to publish for public comment a release setting forth the following proposals that relate to national securities exchanges and registered securities associations that are self-regulatory organizations (“SROs”). In particular, the Commission will consider whether to propose the following:
A. New Rules 6a-5 and 15Aa-3 under the Exchange Act, which would require SROs to implement certain minimum governance standards, including a majority independent board, fully independent Nominating, Governance, Audit, Compensation, and Regulatory Oversight Committees, and the separation of an SRO’s regulatory functions from its market operations and other business interests (“Governance Standards Proposal”).
B. Amendments to Rules 6a-2, 15Aa-1, and Rule 15Aa-2 (redesignated Rule 15Aj-1) and to Form 1 and to new Form 2 (redesignated Form X-15AA-1) and repeal of Forms X-15Aj-1 and X-15Aj-2 under the Exchange Act, which would require the SROs to provide to the Commission, and publicly disclose, greater and more current information about their operation and structure, including their governance processes, regulatory programs, financial condition, and ownership (“Transparency Proposal”).
C. New Rule 17a-26 under the Exchange Act, which would require SROs to file with the Commission quarterly and annual reports containing specified information on the operation of their regulatory programs, including their examination, investigation, and enforcement activities (“SRO Reporting Proposal”).
D. New Rules 6a-5(o) and 15Aa-3(o), new Rule 17a-27, and amendments to Form 1 and new Form 2, which would require SROs to (i) restrict ownership and voting levels of individual members to no more than 20% and (ii) report significant accumulations of ownership by any person, and would require SRO members to report significant ownership interest information as well (“SRO Ownership Proposal”).
E. New Regulation AL, which would impose reporting and notification requirements on an SRO that lists or trades its own securities or those of its trading facilities or affiliates (“SRO Self-Listing Proposal”).
F. Amendment to Rule 17a-1 under the Exchange Act, which would codify the current practice of the SROs to keep at least one copy of their required books and records in the United States (“Books and Records Proposal”).
The Commission also will consider whether to publish for public comment a Concept Release, which would request public comment on a variety of issues relating to the efficacy of the current self-regulatory system, including the possibility of implementing specified enhancements to the current SRO system or pursuing one of several possible alternative regulatory models.
For further information, please contact Geraldine Idrizi at (202) 942-7317 (Governance Standards Proposal); Susie Cho at (202) 942-0748 or Leah Mesfin at (202) 942-0196 (Transparency Proposal); Richard Holley at (202) 942-8086 (SRO Reporting Proposal); Sonia Trocchio at (202) 942-0753 (SRO Self-Listing Proposal, SRO Ownership Proposal, and Books and Records Proposal); and Christopher Stone at (202) 942-7938 (Concept Release).
The Commission will hear oral argument on appeals by Leslie A. Arouh and the Division of Enforcement of an initial decision of an administrative law judge. Arouh was formerly an associated person with First Union Capital Markets (“First Union”), a registered broker-dealer. The law judge concluded that Arouh participated in an adjusted trading scheme which consisted of First Union's (1) buying $100 million of corporate bonds at prices above the prevailing market price from a group of accounts at ARM Capital Advisors LLC (“ARM”), a registered investment adviser, (2) selling the same bonds, at market price, to a different group of ARM accounts shortly thereafter, resulting in a $1.376 million loss to First Union, and (3) selling to ARM accounts bonds that were marked up sufficiently above the prevailing market price to reimburse First Union's losses on the first two legs.
The law judge found Arouh willfully violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5. The law judge suspended Arouh from association with a broker or dealer for ninety days and ordered Arouh to pay a civil money penalty of $330,000.
Arouh argues that the record does not support the law judge's findings of violation, that the sanctions imposed by the law judge are excessive, and that no sanctions are warranted. The Division has appealed the sanctions, arguing that, in addition to the civil money penalty, the Commission should bar Arouh permanently from association with any broker or dealer and impose a cease-and-desist order against him.
Among the issues likely to be considered are:
A. whether respondent committed the alleged violations; and
B. if so, whether sanctions should be imposed in the public interest.
|Home | Previous Page||