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]
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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 (https://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 (https://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
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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 (https://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 (https://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, https://
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
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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
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]]>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]
-----------------------------------------------------------------------
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.
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\7\ 15 U.S.C. 78f(b)(5).
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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 (https://
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 (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
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\
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\8\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-8053 Filed 5-24-06; 8:45 am]
BILLING CODE 8010-01-P
