[Federal Register Volume 72, Number 208 (Monday, October 29, 2007)]
[Notices]
[Pages 61193-61195]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-21219]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56686; File No. SR-NYSE-2007-53]
Self-Regulatory Organizations; The New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change, as Modified by Amendments
Nos. 1 and 2 Thereto, To Amend NYSE Rule 342.13 (``Acceptability of
Supervisors'')
October 23, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on June 20, 2007, The New York Stock Exchange LLC (``NYSE'' or
``Exchange''), filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been substantially prepared by NYSE. On
September 27, 2007, NYSE filed Amendment No. 1 to the proposed rule
change.\3\ On October 15, 2007, NYSE filed Amendment No. 2 to the
proposed rule change.\4\ The Commission is publishing this notice to
solicit comments on the proposed rule change, as amended, from
interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 replaced and superseded the original filing
in its entirety.
\4\ Amendment No. 2 replaced and superseded Amendment No. 1 in
its entirety.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange is filing this proposed rule change to amend NYSE Rule
342.13 (``Acceptability of Supervisors'') to eliminate the current
requirement in that rule that the General Securities Principal
Examination (``Series 24 Examination'') be passed after July 1, 2001 in
order to be recognized by the Exchange as an acceptable alternative to
the General Securities Sales Supervisor Qualification Examination
(``Series 9/10 Examination'').
The text of the proposed rule change is available on NYSE's Web
site (http://www.nyse.com), at NYSE, and at the Commission's public
reference room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NYSE included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. NYSE has prepared summaries, set forth in Sections A, B,
and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Rule 342 (``Offices--Approval, Supervision and Control'')
prescribes the Exchange's general supervisory requirements for member
organizations. Among these requirements, Rule 342.13 (``Acceptability
of Supervisors'') prescribes the Exchange's qualification standards for
personnel delegated supervisory responsibility. Prior to 2001, this
provision provided, in part, that a person delegated supervisory
responsibility must pass the General Securities Sales Supervisor
Qualification Examination (``Series 9/10 Examination'') or an
historical equivalent (e.g., the Series 8 Examination).
In 2002, the Exchange amended Rule 342.13 \5\ to recognize the
National Association of Securities Dealers, Inc. (``NASD'')'s \6\
General Securities Principal Examination (``Series 24 Examination''),
if taken and passed after July 1, 2001, as an alternative to the Series
9/10 Examination requirement for persons whose duties do not include
supervision of options or municipal securities sales activities.\7\
When proposing this amendment, the Exchange represented that NASD, as
of July 2, 2001, had enhanced the Series 24 Examination by including
test questions sufficient to provide appropriate coverage of the NYSE
Rules. The Commission approved the proposed rule change on October 17,
2002.\8\
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\5\ See Securities Exchange Act Release No. 46425 (August 28,
2002), 67 56863 (September 5, 2002) (SR-NYSE-2002-24).
\6\ NASD is now know as the Financial Industry Regulatory
Authority, Inc. (``FINRA'').
\7\ The Series 24 Examination does not address these activities.
\8\ See Securities Exchange Act Release No. 46631 (October 9,
2002), 67 FR 64187 (October 17, 2002) (order approving SR-NYSE-2002-
24). See also NYSE Information Memo 02-51 (November 12, 2002).
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[[Page 61194]]
The Exchange is now proposing to amend Rule 342.13 to eliminate the
requirement that the Series 24 Examination be passed after July 1, 2001
in order for it to be recognized by the Exchange as an acceptable
alternative to the Series 9/10 Examination. The proposed amendment to
Rule 342.13 would simply provide that ``[t]he General Securities
Principal Examination (Series 24) is an acceptable alternative for
persons whose duties do not include the supervision of options or
municipal securities sales activity.'' \9\
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\9\ Prospectively, persons may continue to qualify to supervise
options or municipal securities sales activity by taking and passing
the Series 24 Examination and also taking and passing the Registered
Options Principal (Series 4) and/or Municipal Securities Principal
(Series 53) Examinations.
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The Exchange's rationale for the proposed amendment is that persons
who took the Series 24 Examination prior to July 1, 2001 have been
subject to regulatory and firm element continuing education,\10\ which
the Exchange believes provides ongoing practical training with respect
to current regulatory requirements, including NYSE Rules, applicable to
duties and responsibilities of those persons. Further, the NYSE and the
NASD rulebooks have converged significantly in the last six years.
Thus, the persons who took the Series 24 prior to July 1, 2001 have
been subject to regulatory standards that have, to a large degree, been
harmonized.\11\ Therefore, the July 1, 2001 cut-off date is no longer
necessary or appropriate as FINRA works towards achieving a single
rulebook.
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\10\ See NYSE Rule 345A.
\11\ Convergence between the NYSE Rules and FINRA Rules has
included, in part, standards relating to anti-money laundering,
supervision, research and internal controls, etc.
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The proposed amendment is consistent with the Exchange's and
FINRA's continuing Rule Harmonization Initiative \12\ in that it would
more closely align the requirements under Rule 342.13 with the
corresponding supervisory requirements under FINRA's regulatory
scheme.\13\ The purpose of the Rule Harmonization Initiative is to
achieve, to the extent practicable, substantive harmonization of the
two regulatory schemes in an effort to reduce regulatory duplication
and streamline regulation of self-regulatory organizations.
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\12\ In anticipation of the approval of the NYSE-Archipelago
Holdings, Inc. (``Arca'') merger by the Commission, the Exchange
agreed to initiate a comparison of its ``non-unique'' regulatory
requirements to corresponding NASD regulatory provisions. See
Exchange Act Release No. 53382 (February 27, 2006), 71 FR 11253
(March 6, 2006) (order approving SR-NYSE-2005-77 relating to the
NYSE's Business Combination with Arca). See also the Exchange's
recent ``Omnibus Filing'' with the Commission, Securities Exchange
Act Release No. 56142 (July 26, 2007), 72 FR 42195 (SR-NYSE-2007-
22). See also, the Report by the Exchange on the Process of
Reconciling Inconsistent Rules (February 27, 2007).
\13\ See FINRA Rule 1022(a).
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2. Statutory Basis
The statutory basis for the proposed rule change is Section 6(b)(5)
of the Act \14\ which requires, among other things, that the rules of
an exchange be designed to promote just and equitable principles of
trade, 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.
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\14\ 15 U.S.C. 78f(b)(5).
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NYSE believes the proposed amendment would bring the NYSE
regulatory scheme into greater harmony with that of FINRA, consistent
with the goal of reducing regulatory duplication, by eliminating the
requirement that the Series 24 Examination be passed after July 1, 2001
in order to be recognized by the Exchange as an acceptable alternative
to the Series 9/10 Examination for persons whose duties do not include
supervision of options or municipal securities sales activities.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
While no comments were solicited or received in response to this
filing, it is noted that the Commission received a comment letter in
response to SR-NYSE-2007-41, which eliminated the Securities Manager
Examination (Series 12).\15\ The comment letter raised the issue as to
why July 1, 2001 is used as the starting point for recognition by the
NYSE of the Series 24 Examination. As more fully discussed in the
Purpose section of this filing, the proposed rule change responds to
this issue by eliminating the date demarcation, since the Exchange
believes it no longer serves a compelling regulatory purpose.
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\15\ See Securities Exchange Act Release No. 55670 (April 25,
2007), 72 FR 24350 (May 2, 2007).
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III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding, or (ii) as to
which NYSE consents, the Commission will:
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-NYSE-2007-53 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2007-53. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m.
[[Page 61195]]
Copies of such filing also will be available for inspection and copying
at the principal office of the NYSE. All comments received will be
posted without change; the Commission does not edit personal
identifying information from submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSE-2007-53 and should be submitted on
or before November 19, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-21219 Filed 10-26-07; 8:45 am]
BILLING CODE 8011-01-P