[Federal Register Volume 75, Number 89 (Monday, May 10, 2010)]
[Notices]
[Pages 25887-25889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-10957]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62026; File No. SR-NYSEArca-2010-33]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change, as Modified by Amendment No. 1,
by NYSE Arca, Inc. Amending Rule 4, Capital Requirements, Financial
Reports, Margins
May 4, 2010.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on April 22, 2010, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. On April 29, 2010, the Exchange filed Amendment No. 1 to
the proposed rule change. 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\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend certain financial rules contained in
Rule 4. A copy of this filing is available on the Exchange's Web site
at http://www.nyse.com, at the Exchange's principal office and at the
Commission's Public Reference Room.
[[Page 25888]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
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 those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to update its minimum net capital
requirements in Rule 4.1. Currently, Rule 4.1 does not address OTP
Holders that are not subject to the net capital requirements of Rule
15c3-1 of the Securities Exchange Act. The Exchange proposes to amend
NYSE Arca Rule 4.1 by adding a provision that requires OTP Holders that
are not subject to the net capital requirements of Rule 15c3-1 to meet
an initial minimum ownership equity requirement of $25,000 per Market
Maker as defined by Rule 6.32. The rule will further require an OTP
Holder to meet a minimum ownership equity maintenance requirement of
$15,000 per Market Maker. The minimum ownership equity will be
calculated using Generally Accepted Accounting Principles (GAAP). The
Exchange also proposes to require firms that fail to meet the minimum
ownership equity requirement to notify the corporation in writing
promptly upon discovery of the failure. This proposed rule establishes
a minimum equity requirement for Market Maker OTP firms not subject to
the net capital requirements of Exchange Act Rule 15c3-1.
The Exchange also proposes to add to Rule 4.1 subsection (c) that
requires OTP Holders to suspend all business operations during any
period in which it is not in compliance with the net capital or minimum
ownership equity requirements of 4.1(a) or 4.1(b).\4\ This new
requirement is based in part on FINRA Rule 4110(b)(1).\5\
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\4\ The Exchange notes that Securities Exchange Act Rule 15c3-1
requires that every broker or dealer shall at all times have and
maintain certain specified levels of net capital. The Exchange
further notes that to the extent a broker-dealer fails to maintain
at least the amount of net capital specified in Rule 15c3-1, it must
cease doing a securities business. See 72 FR 12862, at 12872.
\5\ See Securities Exchange Act Release No. 60933 (November 4,
2009), 74 FR 58334 (November 12, 2009) (Order Approving of SR-FINRA-
2008-067).
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The Exchange proposes to amend NYSE Arca Rules 4.5(a) to remove the
reference to a date that has past and is no longer applicable. The
Exchange also proposes to amend the headings of Rule 4.5(b), (c), and
(d) to more accurately reflect the applicability of each subsection.
Finally, the Exchange proposes to add language to subsections (b) and
(e) of the Rule that will require OTP Holders filing those reports to
maintain original copies of such reports with manual signatures. These
changes clarify the requirements of Rule 4.5 and increase regulatory
efficiency by offering OTP Holders a uniform standard for filing FOCUS
Reports.
Finally, the Exchange will amend Rule 4.7 to eliminate a circular
rule reference. The Exchange will replace the reference in 4.7(a) to
Rule 4.1 with a reference to Exchange Act Rule 15c3-1(b).
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Exchange Act,\6\ in general, and furthers the
objectives of Section 6(b)(5) \7\ in particular in that it is 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 facilitating transactions in
securities, and to remove impediments to and perfect the mechanism of a
free and open market and a national market system. The proposed changes
create additional investor protections by enhancing the capital
requirements, notification, and recordkeeping provisions of certain
NYSE Arca rules.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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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 that is 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
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act\8\ and Rule 19b-4(f)(6) thereunder.\9\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act\10\ and Rule 19b-
4(f)(6)(iii) thereunder.\11\
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\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied the pre-filing requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, 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-NYSEArca-2010-33 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2010-33. This
[[Page 25889]]
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 Web site
viewing and printing 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. Copies of such filing also will be
available for inspection and copying at the principal office of
NYSEArca. 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-
NYSEArca-2010-33 and should be submitted on or before June 1, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-10957 Filed 5-7-10; 8:45 am]
BILLING CODE 8011-01-P