[Federal Register Volume 75, Number 102 (Thursday, May 27, 2010)]
[Notices]
[Pages 29795-29797]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-12745]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62142; File No. SR-NYSE-2010-38]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Deleting NYSE Rule 413 To Correspond With Rule Changes Filed by the
Financial Industry Regulatory Authority, Inc.
May 20, 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 May 12, 2010, New York Stock Exchange LLC (``NYSE'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change 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 delete NYSE Rule 413 to correspond with
rule changes filed by the Financial Industry Regulatory Authority, Inc.
(``FINRA'') and approved by the Commission.\4\ The text of the proposed
rule change is available at the Exchange, the Commission's Public
Reference Room, and http://www.nyse.com.
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\4\ See Securities Exchange Act Release No. 61542 (February 18,
2010), 75 FR 8768 (February 25, 2010) (order approving SR-FINRA-
2009-093).
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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 purpose of the proposed rule changes is to delete NYSE Rule 413
(Uniform Forms) to correspond with rule changes filed by FINRA and
approved by the Commission.
Background:
On July 30, 2007, FINRA's predecessor, the National Association of
Securities Dealers, Inc. (``NASD''), and NYSE Regulation, Inc.
(``NYSER'') consolidated their member firm regulation operations into a
combined organization, FINRA. Pursuant to Rule 17d-2 under the Act,
NYSE, NYSER and FINRA entered into an agreement (the ``Agreement'') to
reduce regulatory duplication for their members by allocating to FINRA
certain regulatory responsibilities for certain NYSE rules and rule
interpretations (``FINRA Incorporated NYSE Rules''). NYSE Amex LLC
(``NYSE Amex'') became a party to the Agreement effective December 15,
2008.\5\
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\5\ See Securities Exchange Act Release Nos. 56148 (July 26,
2007), 72 FR 42146 (August 1, 2007) (order approving the Agreement);
56147 (July 26, 2007), 72 FR 42166 (August 1, 2007) (SR-NASD-2007-
054) (order approving the incorporation of certain NYSE Rules as
``Common Rules''); and 60409 (July 30, 2009), 74 FR 39353 (August 6,
2009) (order approving the amended and restated Agreement, adding
NYSE Amex LLC as a party). Paragraph 2(b) of the Agreement sets
forth procedures regarding proposed changes by FINRA, NYSE or NYSE
Amex to the substance of any of the Common Rules.
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As part of its effort to reduce regulatory duplication and relieve
firms that are members of FINRA, NYSE and NYSE Amex of conflicting or
unnecessary regulatory burdens, FINRA is now engaged in the process of
reviewing and amending the NASD and FINRA Incorporated NYSE Rules in
order to create a consolidated FINRA rulebook.\6\
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\6\ FINRA's rulebook currently has three sets of rules: (1) NASD
Rules, (2) FINRA Incorporated NYSE Rules, and (3) consolidated FINRA
Rules. The FINRA Incorporated NYSE Rules apply only to those members
of FINRA that are also members of the NYSE (``Dual Members''), while
the consolidated FINRA Rules apply to all FINRA members. For more
information about the FINRA rulebook consolidation process, see
FINRA Information Notice, March 12, 2008.
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Proposed Conforming Amendments to NYSE Rules:
FINRA recently deleted FINRA Incorporated NYSE Rule 413 (Uniform
Forms), which required that each member had to adopt such uniform forms
as may be prescribed by the Exchange to facilitate the orderly flow of
transactions within the financial community.\7\
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\7\ See Securities Exchange Act Release No. 61542 (February 18,
2010), 75 FR 8768 (February 25, 2010).
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In deleting FINRA Incorporated NYSE Rule 413, FINRA noted that
several provisions in its By-Laws required its members to provide
certain information in the manner and form prescribed by FINRA,
including membership applications, registration of branch offices,
registration of registered representatives and associated persons, and
termination of registered employees. FINRA also noted its proposal to
adopt a new Rule 4540 governing information and data reporting and
filing requirements.\8\
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\8\ See Securities Exchange Act Release No. 61542 (February 18,
2010), 75 FR 8768 (February 25, 2010).
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In order to harmonize the NYSE Rules with the approved consolidated
FINRA Rules, the Exchange correspondingly proposes to delete NYSE Rule
413.\9\ As with FINRA, the Exchange has a number of rules that require
members and member organizations to provide certain information in the
manner and form prescribed by the Exchange: for example, NYSE Rules
301(b) and 311-
[[Page 29796]]
313 deal with membership applications; Rule 342(c) requires filing for
branch offices (Form BR); Rule 345, particularly 345.12, covers
applications for registered representatives (Form U-4); and Rules
312(a) and 345 require reporting termination of registered persons
(Form U-5). In addition, similar to proposed consolidated FINRA Rules
4530 and 4540, NYSE Rule 351 (see 351.10) requires members and member
organizations to provide the Exchange with certain regulatory and
disciplinary information, and Rules 341 and 416A require members and
member organizations to maintain current contact information with the
Exchange.\10\
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\9\ NYSE Amex has submitted a companion rule filing amending its
rules in accordance with FINRA's rule changes. See SR-NYSEAmex-2010-
45.
\10\ See FINRA Regulatory Notices 08-71 (November 28, 2008)
(discussing proposed FINRA Rule 4530) and 09-02 (January 6, 2009)
(discussing proposed FINRA Rule 4540). Per the rule harmonization
process, the Exchange will likely adopt versions of these rules once
they are filed with and approved by the Commission.
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Notwithstanding these other rules, NYSE Rule 416(a) broadly
provides that members and member organizations must ``submit to the
Exchange at such times as may be designated in such form and within
such time period as may be prescribed such information as the Exchange
deems essential for the protection of investors and the public
interest.'' \11\ Thus, deletion of NYSE Rule 413 will not limit the
Exchange's authority to require its members and member organizations to
provide information in a prescribed manner as needed.
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\11\ FINRA has proposed to delete portions of NYSE Rule 416 as
part of its broader proposal to adopt new membership rules. See
FINRA Regulatory Notice 10-01 (January 4, 2010) (discussing proposed
FINRA Rules 1111-1190). Per the rule harmonization process, the
Exchange will likely adopt versions of these rules once they are
filed with and approved by the Commission.
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2. Statutory Basis
The Exchange believes that the proposed rule changes are consistent
with Section 6(b) of the Act,\12\ in general, and further the
objectives of Section 6(b)(5) of the Act,\13\ in particular, in that
they are designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, to protect investors and the
public interest.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule changes support the
objectives of the Act by providing greater harmonization between NYSE
Rules and FINRA Rules (including Common Rules) of similar purpose,
resulting in less burdensome and more efficient regulatory compliance
for Dual Members. To the extent the Exchange has proposed changes that
differ from the FINRA version of the Rules, such changes are technical
in nature and do not change the substance of the proposed NYSE Rules.
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 \14\ and Rule 19b-4(f)(6) thereunder.\15\
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 and Rule 19b-
4(f)(6)(iii) thereunder.
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\14\ 15 U.S.C. 78s(b)(3)(A)(iii).
\15\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.\18\ The Commission
believes that waiver of the operative delay is consistent with the
protection of investors and the public interest because the proposed
rule change is merely deleting a rule that is duplicative of other
rules in its rulebook.\19\ The Exchange has represented that the
deletion of the rule will not limit the Exchange's authority to require
its members and member organizations to provide needed information.
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\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6)(iii).
\18\ See id. Pursuant to Rule 19b-4(f)(6)(iii) under the
Exchange Act, the Exchange is required to give the Commission
written notice of its intent to file a 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 this requirement.
\19\ For purposes only of waiving the 30-day operative delay of
this proposal, 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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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 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-2010-38 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-NYSE-2010-38. 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
[[Page 29797]]
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 the Exchange. 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 publicly available. All
submissions should refer to File Number SR-NYSE-2010-38 and should be
submitted on or before June 17, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-12745 Filed 5-26-10; 8:45 am]
BILLING CODE 8010-01-P