[Federal Register Volume 75, Number 58 (Friday, March 26, 2010)]
[Notices]
[Pages 14650-14652]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-6679]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61743; File No. SR-NYSE-2010-23]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by New York Stock Exchange LLC Deleting NYSE Rule 446 and
Adopting New Rule 4370 To Correspond With Rule Changes Filed by the
Financial Industry Regulatory Authority, Inc.
March 19, 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 March 11, 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,
II, and III 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 446 and adopt new Rule
4370 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. 60534 (August 19,
2009), 74 FR 44410 (August 28, 2009) (order approving SR-FINRA-2009-
036).
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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 446
(Business Continuity and Contingency Plans) and adopt new Rule 4370
(Business Continuity Plans and Emergency Contact Information) 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
In 2008, FINRA deleted FINRA Incorporated NYSE Rule 446 (Business
[[Page 14651]]
Continuity and Contingency Plans) as substantively duplicative of NASD
Rules 3510 (Business Continuity Plans) and 3520 (Emergency Contact
Information).\7\ Correspondingly, the Exchange amended NYSE Rule 446
(Business Continuity and Contingency Plans) to remove the existing text
and incorporate NASD Rules 3510 and 3520 by reference.\8\ Subsequently,
FINRA adopted, subject to certain amendments, NASD Rules 3510 and 3520
as consolidated FINRA Rule 4370 (Business Continuity Plans and
Emergency Contact Information).\9\
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\7\ See Securities Exchange Act Release No. 58533 (September 12,
2008), 73 FR 54652 (September 22, 2008) (order approving SR-FINRA-
2008-036).
\8\ See Securities Exchange Act Release No. 58549 (September 15,
2008), 73 FR 54444 (September 19, 2008) (order approving SR-NYSE-
2008-080).
\9\ See Securities Exchange Act Release No. 60534 (August 19,
2009), 74 FR 44410 (August 28, 2009).
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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
446 and replace it with proposed NYSE Rule 4370, which is substantially
similar to the new FINRA Rule.\10\ As proposed, NYSE Rule 4370 adopts
the same language as FINRA Rule 4370, except for substituting for or
adding to, as needed, the term ``member organization'' for the term
``member'', and making corresponding technical changes that reflect the
difference between NYSE's and FINRA's membership structures. In
addition, in paragraph (f)(2) to proposed Rule 4370, the Exchange added
a cross-reference to NYSE Rule 416A to ensure that those Exchange
members and member organizations that are not FINRA members are
required to update the contact information for emergency personnel in
accordance with NYSE Rules.
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\10\ NYSE Amex has submitted a companion rule filing amending
its rules in accordance with FINRA's rule changes. See SR-NYSE-Amex-
2010-26.
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Finally, in order to ensure that both proposed NYSE Rule 4370 and
FINRA Rule 4370 are fully harmonized, the Exchange also proposes to add
Supplementary Material .01 to NYSE Rule 4370 to provide that, for the
purposes of the rule, the term ``associated person'' shall have the
same meaning as the terms ``person associated with a member'' or
``associated person of a member'' as defined in Article I (rr) of the
FINRA By-Laws.
In addition, the Exchange respectfully requests that the effective
date for the proposed rule changes be retroactive to December 14, 2009,
the same effective date for FINRA's rule changes.\11\ Approval
retroactively effective to December 14, 2009, would ensure that the
proposed rule changes are operative and effective at the same time as
FINRA's rule changes, that there are no regulatory gaps between the
FINRA and NYSE Rules and that, as applicable, the NYSE Rules maintain
their status as Common Rules under the 17d-2 Agreement.\12\
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\11\ See FINRA Regulatory Notice 09-60 (October 15, 2009).
\12\ As provided in paragraph 2(b) of the 17d-2 Agreement, FINRA
and NYSE will amend the list of Common Rules to conform to the rule
changes proposed herein.
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2. Statutory Basis
The Exchange believes that the proposed rule changes are consistent
with Section 6(b) of the Act,\13\ in general, and further the
objectives of Section 6(b)(5) of the Act,\14\ 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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\13\ 15 U.S.C. 78f(b).
\14\ 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
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 the self-regulatory organization consents, the Commission will:
(A) By order approve the 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-2010-23 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-2010-23. 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,\15\ 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 Section, 100
F Street, NE., Washington, DC 20549-1090 between the hours of 10 a.m.
and 3 p.m. Copies of such filing will also be available for inspection
and copying at the NYSE's
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principal office and on its Internet Web site at http://www.nyse.com.
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-2010-23
and should be submitted on or before April 16, 2010.
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\15\ The text of the proposed rule change is available on the
Commission's Web site at http://www.sec.gov/.
For the Commission, by the Division of Trading and Markets,
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. 2010-6679 Filed 3-25-10; 8:45 am]
BILLING CODE 8011-01-P