Self-Regulatory Organizations; New York Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Supplementary Material .26 to Exchange Rule 301 To Waive the Posting Requirements in Relation to Transfers for Nominal Consideration Between Employees of the Same Member Organization and New Leases, 10738-10740 [E6-2931]
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10738
Federal Register / Vol. 71, No. 41 / Thursday, March 2, 2006 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.21
Nancy M. Morris,
Secretary.
[FR Doc. 06–1962 Filed 3–1–06; 8:45 am]
BILLING CODE 8010–01–M
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53354; File No. SR–NYSE–
2006–08]
Self-Regulatory Organizations; New
York Stock Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
Supplementary Material .26 to
Exchange Rule 301 To Waive the
Posting Requirements in Relation to
Transfers for Nominal Consideration
Between Employees of the Same
Member Organization and New Leases
February 23, 2006.
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 February
17, 2006, the New York Stock Exchange,
Inc. (‘‘Exchange’’ or ‘‘NYSE’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Exchange filed the proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6) thereunder,4
which renders the proposal effective
upon filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
wwhite on PROD1PC61 with NOTICES
The Exchange proposes to amend
Supplementary Material .26 to Exchange
Rule 301 to waive the posting
requirements in relation to transfers for
nominal consideration between
employees of the same member
organization and new leases.
The text of the proposed rule changes
is available on the Exchange’s Web site
(https://www.nyse.com), at the
Exchange’s Office of the Secretary, and
at the Commission’s Public Reference
Room.
21 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
1 15
VerDate Aug<31>2005
17:54 Mar 01, 2006
Jkt 208001
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
Exchange 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. The
Exchange 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
The Exchange proposes to amend
Supplementary Material .26 to Exchange
Rule 301 to waive the posting
requirements in relation to transfers for
nominal consideration between
employees of the same member
organization and new leases.
Article II, section 10, of the Exchange
Constitution authorizes the Exchange’s
board of directors to (i) approve the
transfer of membership of a regular
member and the lease of such a
membership and (ii) adopt, amend and
repeal such rules as it may deem
necessary or proper relating to the
posting of notice of the proposed
transfer or lease of a membership and
other similar matters. Supplementary
Material .26 to Exchange Rule 301 sets
forth the current posting requirements
for transfers and leases of seats,
requiring that a proposed transfer or
lease of a membership must be posted
on the Exchange’s bulletin board and in
the Exchange’s Weekly Bulletin at least
10 days before board consideration of
such transfer or lease.
A large percentage of Exchange
memberships and leases of
memberships are held on behalf of
member organizations by individuals
who are employees of those member
organizations. When an employee who
owns a membership on behalf of a
member organization leaves that
member organization, the member
organization may instruct the employee
to transfer such membership to another
employee of the member organization
for a nominal consideration (‘‘nominal
transfer’’). Similarly, if a lessee member
leaves his member organization, the
member organization may cause another
employee to sign a new lease to enable
the member organization to retain the
departed employee’s floor trading rights.
PO 00000
Frm 00105
Fmt 4703
Sfmt 4703
On December 6, 2005, the members of
the Exchange and the shareholders of
Archipelago Holdings, Inc.
(‘‘Archipelago’’) voted to approve a
merger between the Exchange and
Archipelago. Upon consummation of
the merger, all membership interests in
the Exchange will be exchanged for a
combination of cash and common stock
of NYSE Group, Inc. After the merger,
the right to trade on the floor of the
Exchange will be pursuant to a system
of trading licenses. In light of the fact
that memberships will cease to exist
upon consummation of the merger and
the time and resources it takes to
process transfers and leases of
membership, the Exchange announced
that it would not process any transfers
or new leases of memberships entered
into after the close of business on
Friday, December 30, 2005.
At the time the Exchange announced
its decision to cease processing transfers
of memberships and new leases, the
Exchange believed that the merger
would be completed before the end of
January 2006. As completion of the
merger has taken longer than
anticipated, a backlog has developed of
memberships beneficially owned by
member organizations that are not
available for use by such member
organizations. This problem is a
consequence of the inability of those
member organizations to cause the
nominal transfer to continuing
employees of memberships held by
departed employees so as to allow those
continuing employees to transact
business on the trading floor. Similarly,
member organizations have been unable
to execute new leases in the names of
continuing employees when the
employee who had been a lessee
member on behalf of the member
organization has departed. In addition,
member organizations frequently meet
their expanding needs for trading floor
personnel by causing employees to enter
into new leases. The Exchange’s
decision not to process new leases has
prevented member firms from
expanding their floor trading capacity in
this manner and has forced them to
operate with fewer floor trading
personnel than they consider desirable.
Some member organizations have
experienced difficulty in effectively
conducting their business as a result of
this inability either to have employees
admitted as members in place of
departed employees or to acquire
memberships by entering into new
leases to expand their trading floor
capacity. The Exchange has responded
to this problem by recommencing the
processing of nominal transfers and new
E:\FR\FM\02MRN1.SGM
02MRN1
Federal Register / Vol. 71, No. 41 / Thursday, March 2, 2006 / Notices
wwhite on PROD1PC61 with NOTICES
leases.5 However, member organization
personnel needs make it important to
process these transfers and leases as
quickly as possible. Therefore, the
Exchange proposes to amend
Supplementary Material .26 to Exchange
Rule 301 to waive the posting
requirements in relation to nominal
transfers and new leases, so as to
shorten the process where an applicant
is otherwise acceptable to the Exchange
and ready for approval.
The Exchange believes that waiving
the ten day notice period prior to
Exchange approval of a transfer will
provide significant relief to member
organizations that need to replace
departed employees on the trading floor,
or expand their trading floor personnel,
as quickly as possible. The Exchange
intends this waiver for nominal
transfers and leases to be of a limited
duration and will reimpose the
‘‘posting’’ requirement if at any time the
conditions that make such waiver
necessary, as discussed above, no longer
exist.
The purposes of the ‘‘posting’’
requirement are (i) to enable members to
raise objections to the suitability of a
proposed new member and (ii) to give
notice to any member who may have a
claim against the proceeds of the sale of
the membership. As the ‘‘posting’’
process has not given rise to any
objections to a proposed new member in
many years and the Exchange performs
a thorough background check as part of
its approval process, the Exchange
believes that waiving the ‘‘posting’’
requirement in the limited
circumstances proposed by this filing
will not meaningfully diminish the
stringency of the new member approval
process. Furthermore, the Exchange
notes that there will be no ‘‘posting’’
procedure with respect to applicants for
trading licenses under the rules that will
be in effect after the consummation of
the merger. In addition, since the only
membership transfers that will be
permitted are nominal transfers between
employees of the same member
organization, no true sale is occurring
and there are therefore no proceeds for
a third party to make claims against.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the requirement under section 6(b)(5) 6
of the Act that an Exchange have rules
that are designed 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.
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
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (1) Significantly affect
the protection of investors or the public
interest; (2) impose any significant
burden on competition; and (3) become
operative for 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 7 and Rule 19b–4(f)(6)
thereunder.8
A proposed rule change filed under
Rule 19b–4(f)(6) 9 normally may not
become operative prior to 30 days after
the date of filing. However, Rule 19b–
4(f)(6)(iii) 10 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the five-day prefiling
requirement and the 30-day operative
delay, and designate the proposed rule
change immediately operative. The
Commission believes that waiving the
five-day prefiling requirement and the
30-day operative delay is consistent
with the protection of investors and the
public interest.11 The Commission notes
that the Exchange represented that the
posting process has not resulted in
objections to a proposed new member in
many years and the Exchange performs
a thorough background check as part of
7 15
8 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
9 Id.
10 17
5 All
new leases are required to contain a
provision specifying that they will terminate by
their terms upon closing of the merger.
6 15 U.S.C. 78f(b)(5).
VerDate Aug<31>2005
17:54 Mar 01, 2006
Jkt 208001
CFR 240.19b–(f)(6)(iii).
purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
11 For
PO 00000
Frm 00106
Fmt 4703
Sfmt 4703
10739
its approval process for new members.
The Commission also notes that the
Exchange represented that the proposed
waiver of the 10-day posting period
should provide relief to member
organizations that, as a consequence of
the backlog in processing membership
transfers, need to replace departed
employees on the trading floor, or
expand their trading floor personnel, as
quickly as possible to enable them to
effectively conduct their business.
Accordingly, the Commission
designates that the proposal become
operative immediately.
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2006–08 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–2006–08. 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 (https://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
E:\FR\FM\02MRN1.SGM
02MRN1
10740
Federal Register / Vol. 71, No. 41 / Thursday, March 2, 2006 / Notices
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room. 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 available publicly. All
submissions should refer to File
Number SR–NYSE–2006–08 and should
be submitted on or before March 23,
2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.12
Nancy M. Morris,
Secretary.
[FR Doc. E6–2931 Filed 3–1–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53361; File No. SR–PCX–
2006–13]
Self-Regulatory Organizations; Pacific
Exchange, Inc; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to its Fees and
Charges
February 24, 2006.
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 February
14, 2006, the Pacific Exchange, Inc.
(‘‘PCX’’ 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
prepared by the Exchange. The PCX
filed the proposed rule change pursuant
to Section 19(b)(3)(A)(ii) of the Act,3
and Rule 19b–4(f)(2) thereunder,4 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
wwhite on PROD1PC61 with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The PCX proposes to amend its
Schedule of Fees and Charges for
Exchange Services in order to eliminate
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
1 15
VerDate Aug<31>2005
17:54 Mar 01, 2006
the royalty fee that the Exchange
assesses on options contracts traded on
the NASDAQ 100 Tracking Index
(‘‘QQQQ’’). The text of the proposed
rule change is available on the PCX’s
Web site (https://www.pacificex.com), at
the PCX’s Office of the Secretary, 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, the
Exchange 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. The
PCX 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
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received from
Members, Participants, or Others
Written comments on the proposed
rule change were neither solicited nor
received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change establishes
or changes a due, fee, or other charge
applicable only to a member imposed by
the Exchange, and, therefore, has
become effective pursuant to Section
19(b)(3)(A)(ii) of the Act 7 and
subparagraph (f)(2) of Rule 19b–4
thereunder.8 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.
1. Purpose
The purpose of this proposed rule
change is to eliminate the royalty fee
that the Exchange assesses on options
contracts that have as their underlying
symbol QQQQ. The PCX presently
charges Market Makers, broker dealers,
and OTP Firms $0.05 per contract side
when trading QQQQ options. In an
effort to reduce costs associated with
trading on the PCX, the Exchange
proposes to eliminate this fee. By
offering reduced fees, the PCX hopes to
attract additional order flow and
encourage more trading by market
participants in QQQQ options. The PCX
plans to implement the fee change on
February 27, 2006.
IV. Solicitation of Comments
2. Statutory Basis
The PCX believes the proposed rule
change is consistent with Section 6(b) of
the Act,5 in general, and furthers the
objectives of Section 6(b)(4) of the Act,6
in particular, in that it is designed to
provide for the equitable allocation of
reasonable dues, fees, and other charges
among its members and issuers and
other persons using its facilities.
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
No. SR–PCX–2006–13. 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 (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The PCX does not believe that the
proposed rule change will impose any
burden on competition that is not
5 15
6 15
Jkt 208001
necessary or appropriate in furtherance
of the purposes of the Act.
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
Frm 00107
Fmt 4703
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–PCX–2006–13 on the subject
line.
Paper Comments
7 15
8 17
Sfmt 4703
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
E:\FR\FM\02MRN1.SGM
02MRN1
]]>Agencies
[Federal Register Volume 71, Number 41 (Thursday, March 2, 2006)]
[Notices]
[Pages 10738-10740]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-2931]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53354; File No. SR-NYSE-2006-08]
Self-Regulatory Organizations; New York Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Supplementary Material .26 to Exchange Rule 301 To Waive the
Posting Requirements in Relation to Transfers for Nominal Consideration
Between Employees of the Same Member Organization and New Leases
February 23, 2006.
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 February 17, 2006, the New York Stock Exchange, Inc. (``Exchange''
or ``NYSE'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The Exchange
filed the proposed rule change pursuant to Section 19(b)(3)(A) of the
Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Supplementary Material .26 to
Exchange Rule 301 to waive the posting requirements in relation to
transfers for nominal consideration between employees of the same
member organization and new leases.
The text of the proposed rule changes is available on the
Exchange's Web site (https://www.nyse.com), at the Exchange's Office of
the Secretary, 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, the Exchange 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. The Exchange 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
The Exchange proposes to amend Supplementary Material .26 to
Exchange Rule 301 to waive the posting requirements in relation to
transfers for nominal consideration between employees of the same
member organization and new leases.
Article II, section 10, of the Exchange Constitution authorizes the
Exchange's board of directors to (i) approve the transfer of membership
of a regular member and the lease of such a membership and (ii) adopt,
amend and repeal such rules as it may deem necessary or proper relating
to the posting of notice of the proposed transfer or lease of a
membership and other similar matters. Supplementary Material .26 to
Exchange Rule 301 sets forth the current posting requirements for
transfers and leases of seats, requiring that a proposed transfer or
lease of a membership must be posted on the Exchange's bulletin board
and in the Exchange's Weekly Bulletin at least 10 days before board
consideration of such transfer or lease.
A large percentage of Exchange memberships and leases of
memberships are held on behalf of member organizations by individuals
who are employees of those member organizations. When an employee who
owns a membership on behalf of a member organization leaves that member
organization, the member organization may instruct the employee to
transfer such membership to another employee of the member organization
for a nominal consideration (``nominal transfer''). Similarly, if a
lessee member leaves his member organization, the member organization
may cause another employee to sign a new lease to enable the member
organization to retain the departed employee's floor trading rights.
On December 6, 2005, the members of the Exchange and the
shareholders of Archipelago Holdings, Inc. (``Archipelago'') voted to
approve a merger between the Exchange and Archipelago. Upon
consummation of the merger, all membership interests in the Exchange
will be exchanged for a combination of cash and common stock of NYSE
Group, Inc. After the merger, the right to trade on the floor of the
Exchange will be pursuant to a system of trading licenses. In light of
the fact that memberships will cease to exist upon consummation of the
merger and the time and resources it takes to process transfers and
leases of membership, the Exchange announced that it would not process
any transfers or new leases of memberships entered into after the close
of business on Friday, December 30, 2005.
At the time the Exchange announced its decision to cease processing
transfers of memberships and new leases, the Exchange believed that the
merger would be completed before the end of January 2006. As completion
of the merger has taken longer than anticipated, a backlog has
developed of memberships beneficially owned by member organizations
that are not available for use by such member organizations. This
problem is a consequence of the inability of those member organizations
to cause the nominal transfer to continuing employees of memberships
held by departed employees so as to allow those continuing employees to
transact business on the trading floor. Similarly, member organizations
have been unable to execute new leases in the names of continuing
employees when the employee who had been a lessee member on behalf of
the member organization has departed. In addition, member organizations
frequently meet their expanding needs for trading floor personnel by
causing employees to enter into new leases. The Exchange's decision not
to process new leases has prevented member firms from expanding their
floor trading capacity in this manner and has forced them to operate
with fewer floor trading personnel than they consider desirable.
Some member organizations have experienced difficulty in
effectively conducting their business as a result of this inability
either to have employees admitted as members in place of departed
employees or to acquire memberships by entering into new leases to
expand their trading floor capacity. The Exchange has responded to this
problem by recommencing the processing of nominal transfers and new
[[Page 10739]]
leases.\5\ However, member organization personnel needs make it
important to process these transfers and leases as quickly as possible.
Therefore, the Exchange proposes to amend Supplementary Material .26 to
Exchange Rule 301 to waive the posting requirements in relation to
nominal transfers and new leases, so as to shorten the process where an
applicant is otherwise acceptable to the Exchange and ready for
approval.
---------------------------------------------------------------------------
\5\ All new leases are required to contain a provision
specifying that they will terminate by their terms upon closing of
the merger.
---------------------------------------------------------------------------
The Exchange believes that waiving the ten day notice period prior
to Exchange approval of a transfer will provide significant relief to
member organizations that need to replace departed employees on the
trading floor, or expand their trading floor personnel, as quickly as
possible. The Exchange intends this waiver for nominal transfers and
leases to be of a limited duration and will reimpose the ``posting''
requirement if at any time the conditions that make such waiver
necessary, as discussed above, no longer exist.
The purposes of the ``posting'' requirement are (i) to enable
members to raise objections to the suitability of a proposed new member
and (ii) to give notice to any member who may have a claim against the
proceeds of the sale of the membership. As the ``posting'' process has
not given rise to any objections to a proposed new member in many years
and the Exchange performs a thorough background check as part of its
approval process, the Exchange believes that waiving the ``posting''
requirement in the limited circumstances proposed by this filing will
not meaningfully diminish the stringency of the new member approval
process. Furthermore, the Exchange notes that there will be no
``posting'' procedure with respect to applicants for trading licenses
under the rules that will be in effect after the consummation of the
merger. In addition, since the only membership transfers that will be
permitted are nominal transfers between employees of the same member
organization, no true sale is occurring and there are therefore no
proceeds for a third party to make claims against.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the requirement under section 6(b)(5) \6\ of the Act that an
Exchange have rules that are designed 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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\6\ 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
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (1)
Significantly affect the protection of investors or the public
interest; (2) impose any significant burden on competition; and (3)
become operative for 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
\7\ and Rule 19b-4(f)(6) thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally
may not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) \10\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the five-day prefiling requirement and the 30-day
operative delay, and designate the proposed rule change immediately
operative. The Commission believes that waiving the five-day prefiling
requirement and the 30-day operative delay is consistent with the
protection of investors and the public interest.\11\ The Commission
notes that the Exchange represented that the posting process has not
resulted in objections to a proposed new member in many years and the
Exchange performs a thorough background check as part of its approval
process for new members. The Commission also notes that the Exchange
represented that the proposed waiver of the 10-day posting period
should provide relief to member organizations that, as a consequence of
the backlog in processing membership transfers, need to replace
departed employees on the trading floor, or expand their trading floor
personnel, as quickly as possible to enable them to effectively conduct
their business. Accordingly, the Commission designates that the
proposal become operative immediately.
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\9\ Id.
\10\ 17 CFR 240.19b-(f)(6)(iii).
\11\ For purposes only of waiving the 30-day operative delay,
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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSE-2006-08 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-2006-08. 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 (https://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 10740]]
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room. 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 available publicly. All submissions should refer to
File Number SR-NYSE-2006-08 and should be submitted on or before March
23, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-2931 Filed 3-1-06; 8:45 am]
BILLING CODE 8010-01-P
