Self-Regulatory Organizations; New York Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 To Allow Certain Institutional Customers To Elect Not To Receive Account Statements, 30211-30213 [E6-8053]

Download as PDF Federal Register / Vol. 71, No. 101 / Thursday, May 25, 2006 / Notices 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 rulecomments@sec.gov. Please include File Number SR–NASD–2006–059 on the subject line. Paper Comments cchase on PROD1PC60 with NOTICES • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.14 Nancy M. Morris, Secretary. [FR Doc. E6–7996 Filed 5–24–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53826; File No. SR–NYSE– 2005–90] Self-Regulatory Organizations; New York Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 To Allow Certain Institutional Customers To Elect Not To Receive Account Statements May 18, 2006. Pursuant to section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’),2 and Rule 19b–4 thereunder,3 notice is hereby given that on December 21, 2005, the New York Stock Exchange, Inc. (‘‘NYSE’’ or the All submissions should refer to File ‘‘Exchange’’) filed with the Securities Number SR-NASD–2006–059. This file and Exchange Commission (‘‘SEC’’ or number should be included on the the ‘‘Commission’’) the proposed change subject line if e-mail is used. To help the to NYSE Rule 409 (Statements of Commission process and review your Accounts to Customers) as described in comments more efficiently, please use Items I, II, and III below, which Items only one method. The Commission will have been prepared by the Exchange. post all comments on the Commission’s On March 28, 2006, the NYSE filed Internet Web site (http://www.sec.gov/ Amendment No. 1 to the proposed rule rules/sro.shtml). Copies of the change.4 The Commission is publishing submission, all subsequent this notice to solicit comments on the amendments, all written statements proposed rule change from interested with respect to the proposed rule persons. change that are filed with the I. Self-Regulatory Organization’s Commission, and all written Statement of the Terms of Substance of communications relating to the the Proposed Rule Change proposed rule change between the The Exchange is proposing to amend Commission and any person, other than NYSE Rule 409 to allow institutional those that may be withheld from the customers conducting a Delivery versus public in accordance with the Payment and Receive versus Payment provisions of 5 U.S.C. 552, will be (‘‘DVP/RVP’’) business to elect not to available for inspection and copying in receive account statements. the Commission’s Public Reference The text of the proposed rule change Section, 100 F Street, NE., Washington, is set forth below. Italics indicate new DC 20549. Copies of such filing also will text that would be added to the current be available for inspection and copying text of NYSE Rule 409. at the principal office of Nasdaq. All Rule 409. comments received will be posted without change; the Commission does Statements of Accounts to Customers not edit personal identifying (a) Except with the permission of the information from submissions. You Exchange, or as otherwise provided by should submit only information that this paragraph, member organizations you wish to make available publicly. All 14 17 CFR 200.30–3(a)(12). submissions should refer to File 1 15 U.S.C. 78s(b)(1). Number SR–NASD–2006–059 and 2 15 U.S.C. 78a et seq. should be submitted on or before June 3 17 CFR 240.19b–4. 15, 2006. 4 In Amendment No. 1, a partial amendment, the NYSE proposed additional changes to the text of proposed amended Rule 409, which are incorporated in the proposed rule text below. VerDate Aug<31>2005 16:42 May 24, 2006 Jkt 208001 PO 00000 Frm 00099 Fmt 4703 Sfmt 4703 30211 shall send to their customers statements of account showing security and money positions and entries at least quarterly to all accounts having an entry, money or security position during the preceding quarter. Quarterly statements need not be sent to a customer pursuant to Rule 409(a) if: (1) The customer’s account is carried solely for the purpose of execution on a Delivery versus Payment/Receive versus Payment basis (DVP/RVP); (2) All transactions effected for the account are done on a DVP/RVP basis in conformity with Rule 387; (3) The account does not show security or money positions at the end of the quarter; (4) The customer consents to the suspension of such statements in writing. Such consents must be maintained by the member organization in a manner consistent with Exchange Rule 440 and Rule 17a–4 under the Securities Exchange Act of 1934; (5) The member organization undertakes to provide any particular statement or statements to the customer promptly upon request; and (6) The member organization undertakes to promptly reinstate the delivery of such statements to the customer upon request. Nothing in this rule shall be seen to qualify or condition the obligations of a member organization under SEC Rule 15c3–2 concerning quarterly notices of free credit balances on statements. For purposes of this rule, a DVP/RVP account is an arrangement whereby payment for securities purchased is to be made to the selling customer’s agent and/or delivery of securities sold is to be made to the buying customer’s agent in exchange for payment at time of settlement, usually in the form of cash. (b) through (g)—No change. Supplementary Material—No change. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In filing the proposed rule change and Amendment No. 1 with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change, as amended. 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. E:\FR\FM\25MYN1.SGM 25MYN1 30212 Federal Register / Vol. 71, No. 101 / Thursday, May 25, 2006 / Notices A. Self-Regulatory Organization’s Statement of Purpose of, and Statutory Basis for, the Proposed Rule Change cchase on PROD1PC60 with NOTICES (1) Purpose Waiving of Customer Statements for Institutional DVP/RVP Accounts. NYSE Rule 409, in pertinent part, specifies the obligations of member organizations with respect to customer statements, including frequency of delivery and elements of content. NYSE Rule 409(a) requires that, except with the permission of the Exchange, members and member organizations shall send statements at least quarterly to customers for accounts showing security and money positions and entries during the preceding quarter. The Exchange proposes amendments to the Rule that would provide relief from this requirement for customer accounts that are carried solely for the purpose of DVP/RVP transactions. A DVP/RVP account is an arrangement whereby delivery of securities sold is made to the buying customer’s bank in exchange for payment, usually in cash, at settlement. Such accounts must comply with the requirements outlined in NYSE Rule 387 (COD Orders).5 Due to the nature of DVP/RVP accounts, their statements do not generally reflect any cash balance or security position at the end of a quarter. Consequently, DVP/RVP customers (chiefly institutional customers) generally rely on confirmations (issued pursuant to SEC Rule 10b–10) or trade runs for transaction-related information. Such records provide critical transactional information (such as security name and price, commission or markup, trade date, settlement date, etc.) in a timely fashion (trade date +1). According to the NYSE, such records are preferred by institutional investors, who have no desire to receive voluminous quarterly statements. Accordingly, the Exchange proposes amendments to Rule 409 that would relieve member organizations of the obligation to send quarterly statements to customers with such accounts if: (1) The customer’s account is carried solely 5 NYSE Rule 387 sets out specific prerequisites for the acceptance of such orders: (1) The member or member organization must have previously received the name and address of the agent, together with its customer number; (2) The order must note the payment on delivery or collect on delivery nature of the trade; (3) The member or member organization must deliver to the customer a confirmation in the specified form; and (4) The member organization must have obtained an agreement from the customer regarding the furnishing of appropriate instructions for the settlement of the trade. VerDate Aug<31>2005 16:42 May 24, 2006 Jkt 208001 for the purpose of execution on a DVP/ RVP basis; (2) all transactions effected for the account are done on a DVP/RVP basis in conformity with Rule 387; (3) the account does not show security or money positions at the end of the quarter; (4) the customer consents to the suspension of such statements in writing and such consents are maintained by the member organization in a manner consistent with Exchange Rule 440 and Rule 17a–4 under the Exchange Act; (5) the member organization undertakes to provide any particular statement or statements to the customer promptly upon request; and (6) the member organization undertakes to promptly reinstate the delivery of such statements to the customer upon request. Nothing in the proposed amended rule would be seen to qualify or condition the obligations of a member organization under SEC Rule 15c3–2 concerning quarterly notices of free credit balances on statements. For purposes of the proposed amended rule, a DVP/RVP account is an arrangement whereby payment for securities purchased is to be made to the selling customer’s agent and/or delivery of securities sold is to be made to the buying customer’s agent in exchange for payment at time of settlement, usually in the form of cash. By requiring affirmative consent, the ability of the customer to receive quarterly statements is preserved, and the member organization is precluded from unilaterally terminating delivery of such statements. The customer would also retain the right to reinstate the delivery of statements at any time, and to resume receipt of statements promptly upon request. In sum, the Exchange believes that the proposed amended rule would provide reasonable regulatory flexibility by allowing customers to decline delivery of statements that are of little or no use to them. Correspondingly, the proposed amended rule would result in substantial cost savings to member organizations in that they would no longer be required to produce and deliver unwanted and unnecessary records.6 (2) Statutory Basis The Exchange believes that the proposed rule change is consistent with 6 In correspondence dated October 26, 2004, and May 22, 2003, that the NYSE received from Mr. Lawrence Morillo, Chairman of the Securities Industry Association STP Legal and Regulatory Subcommittee, it was estimated that it would not be unreasonable to expect a firm to realize savings of $100,000 per year in statement production and mailing costs. PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 the requirements of the Exchange Act and the rules and regulations thereunder applicable to a national securities exchange, and in particular, with the requirements of section 6(b)(5) of the Exchange Act.7 Section 6(b)(5) 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. The Exchange believes the proposed rule change is designed to promote just and equitable principles of trade, perfect the mechanism of a free an open market, and protect investors by permitting DVP/RVP customers to avoid receiving unwanted, voluminous quarterly account statements. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes that the proposed rule change would not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Exchange Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange neither solicited nor received written comments on 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 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, as amended, is consistent with the Exchange Act. Comments may be submitted by any of the following methods: 7 15 U.S.C. 78f(b)(5). E:\FR\FM\25MYN1.SGM 25MYN1 Federal Register / Vol. 71, No. 101 / Thursday, May 25, 2006 / Notices Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NYSE–2005–90 on the subject line. Paper Comments cchase on PROD1PC60 with NOTICES • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53831; File No. SR–Phlx– 2006–26] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Regulatory Services Agreements May 18, 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 April 28, 2006, the Philadelphia Stock Exchange, All submissions should refer to File Inc. (‘‘Exchange’’ or ‘‘Phlx’’) filed with Number SR–NYSE–2005–90. This file the Securities and Exchange number should be included on the Commission (‘‘Commission’’) the subject line if e-mail is used. To help the proposed rule change as described in Commission process and review your Items I and II below, which Items have comments more efficiently, please use been prepared by the Exchange. The only one method. The Commission will Exchange filed the proposed rule change post all comments on the Commission’s as a ‘‘non-controversial’’ rule change Internet Web site (http://www.sec.gov/ under Rule 19b–4(f)(6) under the Act,3 rules/sro.shtml). Copies of the which rendered the proposal effective submission, all subsequent upon filing with the Commission. The amendments, all written statements Commission is publishing this notice to with respect to the proposed rule solicit comments on the proposed rule change that are filed with the change from interested persons. Commission, and all written I. Self-Regulatory Organization’s communications relating to the Statement of the Terms of Substance of proposed rule change between the the Proposed Rule Change Commission and any person, other than The Exchange proposes to adopt a those that may be withheld from the rule concerning regulatory services public in accordance with the agreements (‘‘RSAs’’), in which the provisions of 5 U.S.C. 552, will be Exchange would contract with another available for inspection and copying in self-regulatory organization (‘‘SRO’’) for the Commission’s Public Reference the performance of certain of the Section, 100 F Street, NE., Washington, Exchange’s regulatory functions. The DC 20549. Copies of such filing also will text of the proposed rule change is be available for inspection and copying available on the Phlx’s Web site, http:// at the principal office of the NYSE. All www.phlx.com, at the Phlx’s Office of comments received will be posted the Secretary, and at the Commission’s without change; the Commission does Public Reference Room. not edit personal identifying II. Self-Regulatory Organization’s information from submissions. You Statement of the Purpose of, and should submit only information that you wish to make available publicly. All Statutory Basis for, the Proposed Rule Change submissions should refer to File In its filing with the Commission, the Number SR–NYSE–2005–90 and should be submitted on or before June 15, 2006. Exchange included statements concerning the purpose of, and basis for, For the Commission, by the Division of the proposed rule change and discussed Market Regulation, pursuant to delegated any comments it received on the 8 authority. proposed rule change. The text of these Nancy M. Morris, statements may be examined at the Secretary. places specified in Item IV below. The [FR Doc. E6–8053 Filed 5–24–06; 8:45 am] Exchange has prepared summaries, set forth in Sections A, B, and C below, of BILLING CODE 8010–01–P 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 purpose of the proposed rule change is to enhance the Phlx’s ability to carry out its regulatory obligations under the Act by clarifying the Phlx’s ability to contract with another SRO for regulatory services. Under any RSA with another SRO, the Phlx would remain an SRO registered under Section 6 of the Act 4 and therefore would continue to have statutory authority and responsibility for enforcing compliance by its members, and persons associated with its members, with the Act, the rules thereunder, and the rules of the Exchange. This rule change would have immediate applicability with respect to an RSA between the Phlx, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’), and other options markets participating in the proposed Options Regulatory Surveillance Authority national market system plan (‘‘ORSA’’). The Phlx has determined that to best discharge its SRO responsibilities, it will contract with CBOE, which is subject to Commission oversight pursuant to Sections 6 and 19 of the Act,5 for CBOE to provide certain regulatory services to the Phlx, as set forth in the ORSA RSA. In performing services under the ORSA RSA, CBOE will be operating pursuant to the statutory SRO responsibilities of the Phlx under Sections 6 and 19, as well as performing for itself its own SRO responsibilities. The proposed rule change specifically states that any action taken by another SRO, or its employees or authorized agents, operating on behalf of the Phlx pursuant to an RSA with the Exchange (e.g., CBOE under the ORSA RSA) will be deemed an action taken by the Exchange. The Phlx will retain ultimate responsibility for performance of its SRO duties under the RSA, and the proposed rule change states that the Exchange shall retain ultimate legal responsibility for and control of its SRO responsibilities. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act 6 in general, and furthers the objectives of Sections 1 15 CFR 200.30–3(a)(12). VerDate Aug<31>2005 16:42 May 24, 2006 Jkt 208001 4 15 2 17 8 17 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 5 15 PO 00000 Frm 00101 Fmt 4703 U.S.C. 78f. U.S.C. 78f and 15 U.S.C. 78s. 6 15 U.S.C. 78f(b). Sfmt 4703 30213 E:\FR\FM\25MYN1.SGM 25MYN1

Agencies

[Federal Register Volume 71, Number 101 (Thursday, May 25, 2006)]
[Notices]
[Pages 30211-30213]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-8053]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53826; File No. SR-NYSE-2005-90]


Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Notice of Filing of Proposed Rule Change and Amendment No. 1 To Allow 
Certain Institutional Customers To Elect Not To Receive Account 
Statements

May 18, 2006.
    Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Exchange Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is 
hereby given that on December 21, 2005, the New York Stock Exchange, 
Inc. (``NYSE'' or the ``Exchange'') filed with the Securities and 
Exchange Commission (``SEC'' or the ``Commission'') the proposed change 
to NYSE Rule 409 (Statements of Accounts to Customers) as described in 
Items I, II, and III below, which Items have been prepared by the 
Exchange. On March 28, 2006, the NYSE filed Amendment No. 1 to the 
proposed rule change.\4\ 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\ 15 U.S.C. 78a et seq.
    \3\ 17 CFR 240.19b-4.
    \4\ In Amendment No. 1, a partial amendment, the NYSE proposed 
additional changes to the text of proposed amended Rule 409, which 
are incorporated in the proposed rule text below.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to amend NYSE Rule 409 to allow 
institutional customers conducting a Delivery versus Payment and 
Receive versus Payment (``DVP/RVP'') business to elect not to receive 
account statements.
    The text of the proposed rule change is set forth below. Italics 
indicate new text that would be added to the current text of NYSE Rule 
409.

Rule 409.

Statements of Accounts to Customers
    (a) Except with the permission of the Exchange, or as otherwise 
provided by this paragraph, member organizations shall send to their 
customers statements of account showing security and money positions 
and entries at least quarterly to all accounts having an entry, money 
or security position during the preceding quarter. Quarterly statements 
need not be sent to a customer pursuant to Rule 409(a) if:
    (1) The customer's account is carried solely for the purpose of 
execution on a Delivery versus Payment/Receive versus Payment basis 
(DVP/RVP);
    (2) All transactions effected for the account are done on a DVP/RVP 
basis in conformity with Rule 387;
    (3) The account does not show security or money positions at the 
end of the quarter;
    (4) The customer consents to the suspension of such statements in 
writing. Such consents must be maintained by the member organization in 
a manner consistent with Exchange Rule 440 and Rule 17a-4 under the 
Securities Exchange Act of 1934;
    (5) The member organization undertakes to provide any particular 
statement or statements to the customer promptly upon request; and
    (6) The member organization undertakes to promptly reinstate the 
delivery of such statements to the customer upon request.
    Nothing in this rule shall be seen to qualify or condition the 
obligations of a member organization under SEC Rule 15c3-2 concerning 
quarterly notices of free credit balances on statements.
    For purposes of this rule, a DVP/RVP account is an arrangement 
whereby payment for securities purchased is to be made to the selling 
customer's agent and/or delivery of securities sold is to be made to 
the buying customer's agent in exchange for payment at time of 
settlement, usually in the form of cash.
    (b) through (g)--No change.
    Supplementary Material--No change.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In filing the proposed rule change and Amendment No. 1 with the 
Commission, the Exchange included statements concerning the purpose of, 
and basis for, the proposed rule change, as amended. 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.

[[Page 30212]]

A. Self-Regulatory Organization's Statement of Purpose of, and 
Statutory Basis for, the Proposed Rule Change

(1) Purpose
    Waiving of Customer Statements for Institutional DVP/RVP Accounts. 
NYSE Rule 409, in pertinent part, specifies the obligations of member 
organizations with respect to customer statements, including frequency 
of delivery and elements of content.
    NYSE Rule 409(a) requires that, except with the permission of the 
Exchange, members and member organizations shall send statements at 
least quarterly to customers for accounts showing security and money 
positions and entries during the preceding quarter. The Exchange 
proposes amendments to the Rule that would provide relief from this 
requirement for customer accounts that are carried solely for the 
purpose of DVP/RVP transactions. A DVP/RVP account is an arrangement 
whereby delivery of securities sold is made to the buying customer's 
bank in exchange for payment, usually in cash, at settlement. Such 
accounts must comply with the requirements outlined in NYSE Rule 387 
(COD Orders).\5\
---------------------------------------------------------------------------

    \5\ NYSE Rule 387 sets out specific prerequisites for the 
acceptance of such orders:
    (1) The member or member organization must have previously 
received the name and address of the agent, together with its 
customer number;
    (2) The order must note the payment on delivery or collect on 
delivery nature of the trade;
    (3) The member or member organization must deliver to the 
customer a confirmation in the specified form; and
    (4) The member organization must have obtained an agreement from 
the customer regarding the furnishing of appropriate instructions 
for the settlement of the trade.
---------------------------------------------------------------------------

    Due to the nature of DVP/RVP accounts, their statements do not 
generally reflect any cash balance or security position at the end of a 
quarter. Consequently, DVP/RVP customers (chiefly institutional 
customers) generally rely on confirmations (issued pursuant to SEC Rule 
10b-10) or trade runs for transaction-related information. Such records 
provide critical transactional information (such as security name and 
price, commission or markup, trade date, settlement date, etc.) in a 
timely fashion (trade date +1). According to the NYSE, such records are 
preferred by institutional investors, who have no desire to receive 
voluminous quarterly statements.
    Accordingly, the Exchange proposes amendments to Rule 409 that 
would relieve member organizations of the obligation to send quarterly 
statements to customers with such accounts if: (1) The customer's 
account is carried solely for the purpose of execution on a DVP/RVP 
basis; (2) all transactions effected for the account are done on a DVP/
RVP basis in conformity with Rule 387; (3) the account does not show 
security or money positions at the end of the quarter; (4) the customer 
consents to the suspension of such statements in writing and such 
consents are maintained by the member organization in a manner 
consistent with Exchange Rule 440 and Rule 17a-4 under the Exchange 
Act; (5) the member organization undertakes to provide any particular 
statement or statements to the customer promptly upon request; and (6) 
the member organization undertakes to promptly reinstate the delivery 
of such statements to the customer upon request.
    Nothing in the proposed amended rule would be seen to qualify or 
condition the obligations of a member organization under SEC Rule 15c3-
2 concerning quarterly notices of free credit balances on statements. 
For purposes of the proposed amended rule, a DVP/RVP account is an 
arrangement whereby payment for securities purchased is to be made to 
the selling customer's agent and/or delivery of securities sold is to 
be made to the buying customer's agent in exchange for payment at time 
of settlement, usually in the form of cash.
    By requiring affirmative consent, the ability of the customer to 
receive quarterly statements is preserved, and the member organization 
is precluded from unilaterally terminating delivery of such statements. 
The customer would also retain the right to reinstate the delivery of 
statements at any time, and to resume receipt of statements promptly 
upon request.
    In sum, the Exchange believes that the proposed amended rule would 
provide reasonable regulatory flexibility by allowing customers to 
decline delivery of statements that are of little or no use to them. 
Correspondingly, the proposed amended rule would result in substantial 
cost savings to member organizations in that they would no longer be 
required to produce and deliver unwanted and unnecessary records.\6\
---------------------------------------------------------------------------

    \6\ In correspondence dated October 26, 2004, and May 22, 2003, 
that the NYSE received from Mr. Lawrence Morillo, Chairman of the 
Securities Industry Association STP Legal and Regulatory 
Subcommittee, it was estimated that it would not be unreasonable to 
expect a firm to realize savings of $100,000 per year in statement 
production and mailing costs.
---------------------------------------------------------------------------

(2) Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of the Exchange Act and the rules and regulations 
thereunder applicable to a national securities exchange, and in 
particular, with the requirements of section 6(b)(5) of the Exchange 
Act.\7\ Section 6(b)(5) 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. The Exchange believes the proposed 
rule change is designed to promote just and equitable principles of 
trade, perfect the mechanism of a free an open market, and protect 
investors by permitting DVP/RVP customers to avoid receiving unwanted, 
voluminous quarterly account statements.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change would not 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Exchange Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange neither solicited nor received written comments on 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 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, as amended, is consistent with the Exchange Act. Comments may 
be submitted by any of the following methods:

[[Page 30213]]

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2005-90 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-2005-90. 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 Section, 100 F Street, 
NE., Washington, DC 20549. 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-2005-90 and should be 
submitted on or before June 15, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
[FR Doc. E6-8053 Filed 5-24-06; 8:45 am]
BILLING CODE 8010-01-P