Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing of the Plan for Allocation of Regulatory Responsibilities Between NYSE Arca, Inc. and the National Association of Securities Dealers, Inc., 43823-43828 [E6-12429]
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43823
Federal Register / Vol. 71, No. 148 / Wednesday, August 2, 2006 / Notices
Document
ADAMS accession No.
Revised License Amendment Request for Changing the Method of Determining Exceedances of the
Combined Radium Groundwater Protection Standard in Source Materials License SUA–1475.
Revised License Amendment Request for Changing the Method of Determining Exceedances of the
Combined Radium Groundwater Protection Standard in Source Materials License SUA–1475.
Environmental Assessment of License Amendment Request for Changing Ground Water Protection
Standards in Source Materials License SUA–1475.
ML060730043
February 22, 2006.
ML061220286
April 7, 2006.
ML061870630
July 21, 2006.
If you do not have access to ADAMS or
if there are problems in accessing the
documents located in ADAMS, contact
the NRC’s Public Document Room (PDR)
Reference staff at 800–397–4209, 301–
415–4737, or by e-mail, to pdr@nrc.gov.
These documents may also be viewed
electronically on the public computers
located at the NRC’s PDR, O1 F21, One
White Flint North, 11555 Rockville
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reproduction contractor will copy
documents for a fee.
Dated at Rockville, Maryland this 26th day
of July, 2006.
For The Nuclear Regulatory Commission.
Paul Michalak,
Project Manager, Fuel Cycle Facilities Branch,
Division of Fuel Cycle Safety and Safeguards,
Office of Nuclear Material Safety and
Safeguards.
[FR Doc. E6–12445 Filed 8–1–06; 8:45 am]
BILLING CODE 7590–01–P
RAILROAD RETIREMENT BOARD
Proposed Collection; Comment
Request
In accordance with the
requirement of Section 3506 (c)(2)(A) of
the Paperwork Reduction Act of 1995
which provides opportunity for public
comment on new or revised data
collections, the Railroad Retirement
Board (RRB) will publish periodic
summaries of proposed data collections.
Comments are invited on: (a) Whether
the proposed information collection is
necessary for the proper performance of
the functions of the agency, including
whether the information has practical
utility; (b) the accuracy of the RRB’s
estimate of the burden of the collection
of the information; (c) ways to enhance
the quality, utility, and clarity of the
information to be collected; and (d)
ways to minimize the burden related to
the collection of information on
respondents, including the use of
automated collection techniques or
other forms of information technology.
Title and purpose of information
collection: Vocational Report; OMB
3220–0141. Section 2 of the Railroad
Retirement Act (RRA) provides for
payment of disability annuities to
wwhite on PROD1PC61 with NOTICES
SUMMARY:
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qualified employees and widow(ers).
The establishment of permanent
disability for work in the applicants
‘‘regular occupation’’ or for work in any
regular employment is prescribed in 20
CFR 220.12 and 220.13 respectively.
The RRB utilizes Form G–251,
Vocational Report, to obtain an
applicant’s work history. This
information is used by the RRB to
determine the effect of a disability on an
applicant’s ability to work. Form G–251
is designed for use with the RRB’s
disability benefit application forms and
is provided to all applicants for
employee disability annuities and to
those applicants for a widow(er)’s
disability annuity who indicate that
they have been employed at some time.
Completion is required to obtain or
retain a benefit. One response is
requested of each respondent. The RRB
proposes no changes to Form G–251.
The completion time for Form G–251 is
estimated at between 30 and 40 minutes
per response. The RRB estimates that
approximately 6,000 Form G–251’s are
completed annually.
Additional Information or Comments:
To request more information or to
obtain a copy of the information
collection justification, forms, and/or
supporting material, please call the RRB
Clearance Officer at (312) 751–3363 or
send an e-mail request to
Charles.Mierzwa@RRB.GOV. Comments
regarding the information collection
should be addressed to Ronald J.
Hodapp, Railroad Retirement Board, 844
North Rush Street, Chicago, Illinois
60611–2092 or send an e-mail to
Ronald.Hodapp@RRB.GOV. Written
comments should be received within 60
days of this notice.
Charles Mierzwa,
Clearance Officer.
[FR Doc. E6–12431 Filed 8–1–06; 8:45 am]
Closed Meeting.
100 F Street, NE., Washington,
STATUS:
PLACE:
DC.
DATE AND TIME OF PREVIOUSLY ANNOUNCED
MEETING: August 1, 2006 at 2 p.m.
Date and Time
Change.
The Closed Meeting scheduled for
Tuesday, August 1, 2006 at 2 p.m., has
been changed to Friday, August 4, 2006
at 2 p.m.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items. For further
information and to ascertain what, if
any, matters have been added, deleted
or postponed, please contact: The Office
of the Secretary at (202) 551–5400.
CHANGE IN THE MEETINGS:
Dated: July 31, 2006.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 06–6669 Filed 7–31–06; 3:52 pm]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54224; File No. 4–523]
Program for Allocation of Regulatory
Responsibilities Pursuant to Rule 17d–
2; Notice of Filing of the Plan for
Allocation of Regulatory
Responsibilities Between NYSE Arca,
Inc. and the National Association of
Securities Dealers, Inc.
July 27, 2006.
Pursuant to Section 17(d) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 17d–2 thereunder,2
notice is hereby given that on January
20, 2006, NYSE Arca, Inc.3 (‘‘NYSE
Arca’’) and the National Association of
Securities Dealers, Inc. (‘‘NASD’’)
1 15
BILLING CODE 7905–01–P
U.S.C. 78q(d).
CFR 240.17d–2.
3 NYSE Arca, Inc. was formerly called the Pacific
Exchange, Inc. (‘‘PCX’’). On March 6, 2006, PCX
filed with the Commission a proposed rule change,
which was effective upon filing, to change the name
of the PCX, as well as several other related entities,
to reflect Archipelago Holdings, Inc.’s
(‘‘Archipelago’’) recent acquisition of PCX and the
merger of the New York Stock Exchange, Inc. with
Archipelago. See Securities Exchange Act Release
No. 53615 (April 7, 2006), 71 FR 19226 (April 13,
2006).
2 17
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
FEDERAL REGISTER CITATION OF PREVIOUS
ANNOUNCEMENT: 71 FR 42888, July 28,
2006.
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Federal Register / Vol. 71, No. 148 / Wednesday, August 2, 2006 / Notices
(together with the NYSE Arca, the
‘‘Parties’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
an amended and restated plan for the
allocation of regulatory responsibilities.
On July 25, 2006, the Parties submitted
a revised amended and restated plan.
The Commission is publishing this
notice to solicit comments on the
revised amended and restated 17d–2
plan from interested persons.
I. Introduction
Section 19(g)(1) of the Act,4 among
other things, requires every selfregulatory organization (‘‘SRO’’)
registered as either a national securities
exchange or registered securities
association to examine for, and enforce
compliance by, its members and persons
associated with its members with the
Act, the rules and regulations
thereunder, and the SRO’s own rules,
unless the SRO is relieved of this
responsibility pursuant to Section
17(d) 5 or 19(g)(2) 6 of the Act. Without
this relief, the statutory obligation of
each individual SRO could result in a
pattern of multiple examinations of
broker-dealers that maintain
memberships in more than one SRO
(‘‘common members’’). Such regulatory
duplication would add unnecessary
expenses for common members and
their SROs.
Section 17(d)(1) of the Act 7 was
intended, in part, to eliminate
unnecessary multiple examinations and
regulatory duplication.8 With respect to
a common member, Section 17(d)(1)
authorizes the Commission, by rule or
order, to relieve an SRO of the
responsibility to receive regulatory
reports, to examine for and enforce
compliance with applicable statutes,
rules, and regulations, or to perform
other specified regulatory functions.
To implement Section 17(d)(1), the
Commission adopted two rules: Rule
17d–1 and Rule 17d–2 under the Act.9
Rule 17d–1 authorizes the Commission
to name a single SRO as the designated
examining authority (‘‘DEA’’) to
examine common members for
compliance with the financial
responsibility requirements imposed by
the Act, or by Commission or SRO
rules.10 When an SRO has been named
4 15
U.S.C. 78s(g)(1).
U.S.C. 78q(d).
6 15 U.S.C. 78s(g)(2).
7 15 U.S.C. 78q(d)(1).
8 See Securities Act Amendments of 1975, Report
of the Senate Committee on Banking, Housing, and
Urban Affairs to Accompany S. 249, S. Rep. No. 94–
75, 94th Cong., 1st Session 32 (1975).
9 17 CFR 240.17d–1 and 17 CFR 240.17d–2,
respectively.
10 See Securities Exchange Act Release No. 12352
(April 20, 1976), 41 FR 18809 (May 3, 1976).
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as a common member’s DEA, all other
SROs to which the common member
belongs are relieved of the responsibility
to examine the firm for compliance with
the applicable financial responsibility
rules. On its face, Rule 17d–1 deals only
with an SRO’s obligations to enforce
member compliance with financial
responsibility requirements. Rule 17d–1
does not relieve an SRO from its
obligation to examine a common
member for compliance with its own
rules and provisions of the federal
securities laws governing matters other
than financial responsibility, including
sales practices and trading activities and
practices.
To address regulatory duplication in
these and other areas, the Commission
adopted Rule 17d–2 under the Act.11
Rule 17d–2 permits SROs to propose
joint plans for the allocation of
regulatory responsibilities with respect
to their common members. Under
paragraph (c) of Rule 17d–2, the
Commission may declare such a plan
effective if, after providing for notice
and comment, it determines that the
plan is necessary or appropriate in the
public interest and for the protection of
investors, to foster cooperation and
coordination among the SROs, to
remove impediments to, and foster the
development of, a national market
system and a national clearance and
settlement system, and is in conformity
with the factors set forth in Section
17(d) of the Act. Commission approval
of a plan filed pursuant to Rule 17d–2
relieves an SRO of those regulatory
responsibilities allocated by the plan to
another SRO.
II. Proposed Plan
The Parties currently operate
pursuant to a 17d–2 plan in which the
NASD assumed certain inspection,
examination, and enforcement
responsibility for common members
with respect to certain applicable laws,
rules, and regulations (the ‘‘current
NASD–PCX 17d–2 Plan’’).12 On
11 See Securities Exchange Act Release No. 12935
(October 28, 1976), 41 FR 49093 (November 8,
1976).
12 See Securities Exchange Act Release Nos.
14095 (October 25, 1977), 42 FR 57198 (November
1, 1977) (File No. 4–267) (notice of 1977
Agreement); 15191 (September 26, 1978), 43 FR
46093 (October 5, 1978) (File No. 4–267) (order
granting temporary approval); 15722 (April 12,
1979), 44 FR 23616 (April 20, 1979) (File No. 4–
267) (extension of time to file amendments); 15941
(June 21, 1979) (File No. 4–267), SEC Docket, Vol.
17, no. 14, page 995 (July 3, 1979) (further extension
of time to file required amendments); 16462
(January 2, 1980), 45 FR 2121 (January 10, 1980)
(File No. 4–267) (order granting temporary
approval); 16591 (February 20, 1980), 45 FR 12573
(February 26, 1980) (File No. 4–267) (notice of 1980
Amendment); 16719 (April 2, 1980), 45 FR 23841
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September 22, 2005, the Commission
approved a proposed rule change
submitted by PCX, the predecessor to
NYSE Arca,13 relating to the acquisition
of PCX Holdings, Inc. by Archipelago.14
In that filing, PCX committed to amend
the current NASD–PCX 17d–2 Plan
within 90 days of the Commission’s
approval of SR–PCX–2005–90 to expand
the scope of the NASD’s regulatory
functions under the plan so as to
encompass all of the regulatory
oversight and enforcement
responsibilities with respect to the
broker-dealer affiliate of Archipelago,
Archipelago Securities, L.L.C.15 This
time period has been extended three
times.16
On January 20, 2006, the Parties
submitted an amended and restated
17d–2 plan for review and approval by
the Commission. On July 25, 2006, the
Parties submitted a revised amended
and restated plan. The revised amended
and restated plan is intended to replace
and supersede the current NASD–PCX
17d–2 Plan and all prior amendments
thereto in their entirety. The revised
amended and restated 17d–2 plan is
intended to reduce regulatory
duplication for firms that are common
members of NYSE Arca and the NASD.
The text of the plan delineates
regulatory responsibilities with respect
to the Parties, including responsibility
for NYSE Arca rules. Included in the
revised amended and restated plan is an
attachment (‘‘NYSE Arca Rules
Certification for 17d–2 Agreement with
NASD,’’ referred to herein as the
‘‘Certification’’) that lists every NYSE
Arca rule and the federal securities laws
and rules and regulations thereunder for
which, under the plan, the NASD would
bear responsibility for overseeing and
enforcing with respect to common
members. In particular, under the
revised amended and restated 17d–2
plan, the NASD would assume
examination and enforcement
responsibility relating to compliance by
dual members and persons associated
therewith with the rules of NYSE Arca
that are substantially similar to the rules
(April 8, 1980) (File No. 4–267) (order granting
temporary approval); and 16858 (May 30, 1980), 45
FR 37927 (June 5, 1980) (File No. 4–267) (approval
order).
13 See supra note 3.
14 See Securities Exchange Act Release No. 52497
(September 22, 2005), 70 FR 56949 (September 29,
2005) (approving SR–PCX–2005–90, as amended).
15 Archipelago Securities acts as the outbound
order router for the NYSE Arca Marketplace
(formerly, the Archipelago Exchange, or ArcaEx),
the equities trading facility of NYSE Arca.
16 See Securities Exchange Act Release Nos.
52995 (December 21, 2005), 70 FR 77232 (December
29, 2005); 53545 (March 23, 2006), 71 FR 16183
(March 30, 2006); and 54046 (June 26, 2006), 71 FR
37965 (July 3, 2006).
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Federal Register / Vol. 71, No. 148 / Wednesday, August 2, 2006 / Notices
of the NASD (‘‘Common Rules’’), as well
as any provisions of the federal
securities laws and the rules and
regulations thereunder delineated in the
Certification.17 Under the plan, NYSE
Arca would retain full responsibility for
surveillance and enforcement with
respect to trading activities or practices
involving NYSE Arca’s own
marketplace; registration pursuant to its
unique rules (i.e., non-common rules);
its duties as a Designated Examining
Authority pursuant to Rule 17d–1 under
the Act; and any rules that are not
substantially similar to the rules of the
NASD, except for NYSE Arca rules for
any broke-dealer subsidiary of
Archipelago.18
The text of the revised amended and
restated 17d–2 plan is as follows:
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Agreement Between the NASD and
NYSA Arca, Inc. Pursuant to Sec Rule
17d–2 Under the Securities Exchange
Act of 1934
This Agreement, between the National
Association of Securities Dealers, Inc.
(‘‘NASD’’) and the NYSE Arca, Inc.
(‘‘NYSE Arca’’), is made this 25th day of
July, 2006, pursuant to the provisions of
SEC Rule 17d–2 under the Securities
Exchange Act of 1934 which calls for
agreements between self-regulatory
organizations for plans to reduce or
eliminate regulatory duplication.
This Agreement supersedes and
replaces Agreements entered into
between the parties on May 27, 1977
and January 20, 2006, entitled
‘‘Agreement Between the National
Association of Securities Dealers, Inc.
and the Pacific Stock Exchange, Inc.
Pursuant to SEC Rule 17d–2 Under the
Securities Exchange Act of 1934,’’ and
any subsequent amendments thereafter.
Whereas, NASD and NYSE Arca are
desirous of reducing duplication in the
examination of their dual members (a
broker-dealer firm which is a member of
both NASD and NYSE Arca) and in the
filing and processing of certain
registration and membership records;
and
Whereas, NASD and NYSE Arca are
desirous of executing a plan covering
such subjects pursuant to the provisions
of Rule 17d–2 and filing such with the
Commission for its approval.
Now, therefore, in consideration of
the mutual covenants contained
17 See paragraph 2 of the revised amended and
restated 17d–2 plan. The Commission notes that
there is only one federal security law rule on the
Certification, Rule 200 of Regulation SHO.
18 See id. Apparent violations of such NYSE Arca
rules by any broker-dealer subsidiary of
Archipelago will be processed by, and enforcement
proceedings will be conducted by, the NASD. See
paragraph 5 of the revised amended and restated
17d–2 plan.
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16:40 Aug 01, 2006
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hereafter, the said NASD and NYSE
Arca hereby agree as follows:
1. That NASD will assume regulatory
responsibilities for all firms who are
members of NYSE Arca and NASD
(‘‘dual members’’). NYSE Arca shall
furnish NASD with a current list of dual
members, which shall be updated no
less frequently than once each quarter.
2. For purposes of this plan, the term
‘‘regulatory responsibilities’’ shall mean
the examination and enforcement
responsibility relating to compliance by
the dual members and persons
associated therewith with the rules of
NYSE Arca that are substantially similar
to the rules of NASD in that the NYSE
Arca’s rule would not require NASD to
develop one or more new examination
standards, modules, procedures, or
criteria in order to analyze the
application of the rule, or a dual
member’s activity, conduct, or output in
relation to such rule, (the ‘‘Common
Rules’’). Prior to the effective date of
this Agreement, NYSE Arca shall
furnish NASD with a current list of
Common Rules (‘‘Certification’’), and
NASD will confirm in writing whether
the rules listed in the Certification are
Common Rules as defined in this
Agreement. Each year following the
commencement of operation of this
Agreement, or more frequently if
required by changes in either the rules
of NYSE Arca or NASD, NYSE Arca
shall submit an updated list of Common
Rules to NASD for review which shall
add NYSE Arca rules not included in
the current list of Common Rules that
qualify as Common Rules as defined in
this Agreement; delete NYSE Arca rules
included in the current list of Common
Rules that no longer qualify as Common
Rules as defined in this Agreement; and
confirm that the remaining rules on the
current list of Common Rules continue
to be NYSE Arca rules that qualify as
Common Rules as defined in this
Agreement. Within 30 days of receipt of
such updated list, NASD will confirm in
writing whether the rules listed in any
updated list are Common Rules as
defined in this Agreement. Regulatory
responsibilities under this Agreement
shall also extend to those provisions of
the federal securities laws and rules and
regulations thereunder listed in the
Certification.
The term ‘‘enforcement
responsibility’’ shall mean the conduct
of appropriate proceedings, in
accordance with the NASD Code of
Procedure (the Rule 9000 Series) and
other applicable NASD procedural
rules, to determine whether violations
of pertinent laws, rules or regulations
have occurred, and if such violations are
deemed to have occurred, the
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43825
imposition of appropriate sanctions as
specified under the NASD’s Code of
Procedure and sanctions guidelines.
Notwithstanding anything herein to the
contrary, it is explicitly understood that
the term ‘‘regulatory responsibilities’’
does not include, and NYSE Arca will
retain full responsibility for (unless
otherwise addressed by separate
agreement or rule):
(a) Surveillance and enforcement with
respect to trading activities or practices
involving NYSE Arca’s own
marketplace, including without
limitation NYSE Arca’s rules relating to
the rights and obligations of market
makers;
(b) Registration pursuant to its
applicable rules of associated persons
(i.e., registration rules that are not
Common Rules);
(c) Discharge of its duties and
obligations as a Designated Examining
Authority pursuant to Rule 17d–1 under
the Act; and
(d) Any rules of NYSE Arca that are
not substantially similar to the rules of
NASD, except for NYSE Arca rules for
any broker-dealer subsidiary of
Archipelago Holdings, Inc. as provided
in paragraph 5.
3. There shall be no charge to NYSE
Arca by NASD for performing the stated
regulatory responsibilities under this
plan except as hereinafter provided.
NASD will provide NYSE Arca with
ninety (90) days advance written notice
in the event NASD decides to impose
any charges to NYSE Arca for
performing the stated regulatory
responsibilities under this plan. If it
becomes necessary to impose a charge,
NYSE Arca shall have the right at the
time of the imposition of such to
terminate this Agreement; provided,
however, that NASD’s regulatory
responsibilities under this Agreement
shall continue until the SEC approves
the termination of this Agreement.
4. Notwithstanding any provision
hereof, this Agreement shall be subject
to any statute, or any rule or order of the
Securities and Exchange Commission,
or industry agreement, restructuring the
regulatory framework of the securities
industry or reassigning regulatory
responsibilities between self-regulatory
organizations. To the extent such is
inconsistent with this Agreement, such
shall supersede the provisions hereof to
the extent necessary for them to be
properly effectuated and the provisions
hereof in that respect shall be null and
void.
5. Should NASD become aware of
apparent violations of NYSE Arca’s
rules, which are not listed as Common
Rules, discovered pursuant to the
performance of the regulatory
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43826
Federal Register / Vol. 71, No. 148 / Wednesday, August 2, 2006 / Notices
responsibilities assumed hereunder,
NASD will notify NYSE Arca of those
apparent violations. With respect to
apparent violations of any NYSE Arca
rules by any broker-dealer subsidiary of
NYSE Arca’s parent company,
Archipelago Holdings, Inc., NASD shall
not make referrals to NYSE Arca
pursuant to this Item 5. Such apparent
violations shall be processed by, and
enforcement proceedings in respect
thereto will be conducted by, NASD as
provided in this agreement. Apparent
violations of all other applicable rules,
including violations of the various
securities acts, and rules and regulations
thereunder, will be processed by, and
enforcement proceedings in respect
thereto will be conducted by NASD as
provided hereinbefore; provided
however that in the event a covered
dual member or a person associated
therewith is the subject of an
investigation relating to a transaction on
NYSE Arca, NYSE Arca may in its
discretion assume concurrent
jurisdiction and responsibility. Each
party agrees to make available promptly
all files, records and witnesses
necessary to assist the other in its
investigation or proceedings.
6. NASD will make available to NYSE
Arca all information obtained by it in
the performance by it of the regulatory
responsibilities hereunder in respect to
the firms which are subject to this
Agreement. In particular, and not in
limitation of the foregoing, NASD will
furnish NYSE Arca any information it
obtains about dual members which
reflects adversely on their financial
condition and which should be known
by NYSE Arca or any subsidiaries
thereof. It is understood that such
information is of an extremely sensitive
nature and, accordingly, NYSE Arca
agrees to take all reasonable steps to
maintain its confidentiality. NYSE Arca
will supply NASD any information
coming to its attention that reflects
adversely on the financial condition of
dual members or indicates possible
violations of applicable laws, rules or
regulations by such firms.
7. Dual members subject to this
agreement will be required to submit,
and NASD will be responsible for
processing and acting upon all
applications submitted on behalf of
allied persons, partners, officers,
registered personnel and any other
person required to be approved by the
rules of both NYSE Arca and NASD or
associated with dual members thereof.
NASD shall advise NYSE Arca monthly
of any changes of allied members,
partners, officers, registered personnel
and other persons required to be
approved by the rules of both NYSE
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16:40 Aug 01, 2006
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Arca and NASD. Dual members will be
required to send to NASD all letters,
termination notices or other material
respecting these individuals. When as a
result of processing said submissions
NASD becomes aware of a statutory
disqualification as defined in the
Securities Exchange Act of 1934 with
respect to a dual member or person
associated with a dual member, NASD
will determine pursuant to sections
15A(g) and/or section 6(c) the
acceptability or continued applicability
of the person to whom such
disqualification applies and keep NYSE
Arca advised of its actions in this
regard.
NASD will also be responsible for
processing and, if required, acting upon
all requests for the opening, address
changes, and terminations of branch
offices by dual members and any other
applications required of dual members
under the Common Rules as they may
be amended from time to time. NASD
will advise NYSE Arca monthly of the
opening, address change and
termination of branch and main offices
of dual members and the names of such
branch office managers.
8. NYSE Arca shall forward to NASD
copies of all customer complaints
involving dual members and persons
associated therewith received by it
relating to NASD’s regulatory
responsibilities under this Agreement. It
shall be NASD’s responsibility to review
and take appropriate action in respect to
such complaints.
9. NASD shall assume responsibility
to review the advertising of dual
members subject to the Agreement,
provided that such material is filed with
NASD in accordance with NASD’s filing
procedures and is accompanied with
any applicable filing fees. Such review
will be made in accordance with then
applicable NASD rules and
interpretations. In all cases of dual
members subject to this Agreement, the
advertising of dual members shall be
subject only to compliance with
appropriate NASD rules and
interpretations.
10. Nothing contained in this
Agreement shall restrict or in any way
encumber the right of NASD or NYSE
Arca to conduct special or cause
examinations of dual members and
persons associated therewith as NASD
or NYSE Arca, in their sole discretions,
shall deem appropriate.
11. NYSE Arca recognizes that,
pursuant to this Agreement, NASD will
maintain an available and appropriate
mechanism for considering and acting
upon requests by dual members for
extensions of time pursuant to Federal
Reserve Regulation T and SEC Rule
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15c3–3 of the Securities Exchange Act
of 1934. NASD will keep NYSE Arca
informed with respect to its activities in
granting extensions of time pursuant to
Regulation T and Rule 15c3–3 to dual
members in such form and content as
reasonably determined by NASD.
12. Should a dispute arise between
the parties as to the operation of this
Agreement, NYSE Arca and NASD agree
that any such dispute shall be settled by
arbitration in Washington, DC in
accordance with the rules of the
American Arbitration Association then
in effect, or such other procedures as the
parties may mutually agree upon.
Judgment on the award rendered by the
arbitrator(s) may be entered in any court
having jurisdiction.
13. This Agreement may be cancelled
by NYSE Arca or NASD at any time
with the approval of the Securities and
Exchange Commission upon one (1)
year’s written notice, except as provided
in paragraph 3.
14. This Agreement shall be effective
upon approval of the Securities and
Exchange Commission.
15. This Agreement is wholly separate
from the multiparty Agreement made
pursuant to SEC Rule 17d–2 of the
Securities Exchange Act of 1934
between the American Stock Exchange
LLC, the Boston Stock Exchange, Inc.,
the Chicago Board Options Exchange,
Inc., the International Securities
Exchange, Inc., the National Association
of Securities Dealers, Inc., the New York
Stock Exchange, Inc., the Pacific
Exchange, Inc., and the Philadelphia
Stock Exchange involving the allocation
of regulatory responsibilities with
respect to common members for
compliance with common rules relating
to the conduct by broker-dealers of
accounts for listed options or index
warrants entered into on January 14,
2004, and as may be amended from time
to time.
Limitation of Liability
Neither NASD nor NYSE Arca nor any
of their respective directors, governors,
officers or employees shall be liable to
the other party to this plan for any
liability, loss or damage resulting from
or claimed to have resulted from any
delays, inaccuracies, errors or omissions
with respect to the provision of
regulatory responsibilities as provided
hereby or for the failure to provide any
such responsibility, except with respect
to such liability, loss or damages as
shall have been suffered by one or the
other of NASD or NYSE Arca and
caused by the willful misconduct of the
other party or their respective directors,
governors, officers or employees. No
warranties, express or implied, are made
E:\FR\FM\02AUN1.SGM
02AUN1
Federal Register / Vol. 71, No. 148 / Wednesday, August 2, 2006 / Notices
by NASD or NYSE Arca with respect to
any of the responsibilities to be
performed by each of them hereunder.
Relief From Responsibility
Pursuant to Sections 17(d)(1)(A) and
19(g) of the Securities Exchange Act of
1934 and Rule 17d–2 promulgated
pursuant thereto, NASD and NYSE Arca
join in requesting the Commission,
upon its approval of this plan or any
part thereof, to relieve NYSE Arca of
any and all responsibilities with respect
to matters allocated to NASD pursuant
to this plan.
NYSE Arca Certification
NYSE Arca Rules Certification for 17d–
2 Agreement With NASD
NYSE Arca, Inc. hereby certifies that
the requirements contained in the rules
listed below for NYSE Arca Equities,
Inc., a wholly-owned subsidiary, are
identical to, or substantially similar to,
comparable NASD rules (‘‘Common
Rules’’) as of July 2006.19
Rule
Description
2.15 .....
Responsibilities of Non-Resident
Firms.
Employees of ETP Holder Registration.
ETP Books and Records.
Adherence to Law.
Prohibited Acts.
Front-Running of Block Transactions.
Disciplinary Action By Other Organizations.
Miscellaneous Prohibitions.
Trading Ahead of Customer Limit
Orders.
Anti-Money Laundering Compliance
Program.
Supervision.
Account Approval.
Suitability.
Discretionary Accounts.
Supervision of Accounts.
Customer Complaints.
Prior Approval of Certain Communications to Customers.
Register with the Corporation.
Office Supervision.
Designation of Firm Principal.
Guarantees.
Sharing Profits—Losses.
Account Supervision.
Customer Records.
2.21 .....
2.24 .....
6.1 .......
6.2 .......
6.6 .......
6.13 .....
6.15 .....
6.16 .....
6.17 .....
6.18 .....
8.4 .......
8.5 .......
8.6 .......
8.7 .......
8.8 .......
8.9 .......
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9.1(a) ...
9.1(c) ...
9.1(d) ...
9.1(e) ...
9.1(f) ....
9.2(b) ...
9.2(c) ...
19 The Commission notes that the Certification
attached to the executed revised amended and
restated plan also includes references to the NASD
rules to which the Common Rules are identical or
substantially similar. Further, the Certification
notes that, with respect to several of the NYSE Arca
rules, NYSE Arca will be responsible for any
significant differences between its rule and the
comparable NASD rule identified, until such time
amendments to such rule(s) may be approved. A
copy of the revised amended and restated plan,
including the Certification, is available on the
Commission’s Web site at https://www.sec.gov.
VerDate Aug<31>2005
16:40 Aug 01, 2006
Jkt 208001
IV. Solicitation of Comments
Rule
Description
9.3(a) ...
9.3(b) ...
Employee Accounts.
ETP Holder and Allied Person Accounts.
Proxies Voting.
Solicitation Expense.
Discretion as to Customers’ Accounts.
Records of Discretionary Accounts.
Pledging Customer Securities.
Use of Customer Securities.
Customer
Protection—Reserves
and Custody of Securities.
Agreements for Use of Customer
Securities.
Assuming Losses.
Confirmations.
COD Orders—Partial Delivery.
Long Sales.
Account Designation.
Statements of Account to Customers.
Books and Records.
Transfer of Accounts.
Telemarketing.
Policy.
Advertisements.
Sales Literature—Market Letters.
Radio, Television, Telephone and
Other Reports.
Standards.
Registration of Representatives.
Regulatory Element.
Borrowing From or Lending to Customers.
9.4 .......
9.5 .......
9.6(a) ...
9.6(b)
9.7(a)
9.7(b)
9.7(c)
...
...
...
...
9.7(d) ...
9.10
9.11
9.12
9.13
9.14
9.15
.....
.....
.....
.....
.....
.....
9.17 .....
9.19 .....
9.20(b)
9.21(a)
9.22(a)
9.23 .....
9.24 .....
9.25
9.27
9.27
9.29
.....
.....
.....
.....
In addition, the following provisions of
the Securities Exchange Act of 1934,
and rules and regulations thereunder,
shall be part of this 17d–2 Agreement:
Rule 200 of Regulation SHO-Definition
of ‘‘Short Sale’’ and Marking
Requirements.
III. Date of Effectiveness of the
Proposed Plan and Timing for
Commission Action
Pursuant to Section 17(d)(1) of the
Act 20 and Rule 17d–2 thereunder,21
after August 23, 2006, the Commission
may, by written notice, declare the plan
submitted by NYSE Arca and the NASD,
File No. 4–523, effective if the
Commission finds that the plan is
necessary or appropriate in the public
interest and for the protection of
investors, to foster cooperation and
coordination among self-regulatory
organizations, or to remove
impediments to and foster the
development of the national market
system and a national system for the
clearance and settlement of securities
transactions and in conformity with the
factors set forth in Section 17(d) of the
Act.
20 15
21 17
PO 00000
U.S.C. 78q(d)(1).
CFR 240.17d–2.
Frm 00118
Fmt 4703
In order to assist the Commission in
determining whether to approve the
revised amended and restated 17d–2
plan and to relieve NYSE Arca of the
responsibilities which would be
assigned to the NASD, interested
persons are invited to submit written
data, views, and arguments concerning
the foregoing. Comments may be
submitted by any of the following
methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/other.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number 4–523 on the subject line.
Paper Comments
• 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
Number 4–523. 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/
other.shtml). Copies of the submission,
all subsequent amendments, all written
statements with respect to the proposed
plan that are filed with the Commission,
and all written communications relating
to the proposed plan 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
Room. Copies of the plan 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 4–523 and should be submitted
on or before August 23, 2006.
22 17
Sfmt 4703
43827
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CFR 200.30–3(a)(34).
02AUN1
43828
Federal Register / Vol. 71, No. 148 / Wednesday, August 2, 2006 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.22
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6–12429 Filed 8–1–06; 8:45 am]
comments it received regarding the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. CHX
has prepared summaries, set forth in
Sections A, B, and C below, of the most
significant aspects of such statements.
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[Release No.34–54222; File No. SR–CHX–
2006–21]
1. Purpose
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change Relating to
Participant Fees and Credits
July 26, 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 July 11,
2006, the Chicago Stock Exchange, Inc.
(‘‘CHX’’ or ‘‘Exchange’’) 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 CHX. The Exchange filed the
proposal pursuant to Section
19(b)(3)(A)(iii) 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
CHX proposes to amend its
Participant Fee Schedule (the ‘‘Fee
Schedule’’) to clarify monthly
applicability of the Exchange’s SelfRegulatory Organization Fee (‘‘SRO
Fee’’). The text of this proposed rule
change is available on the Exchange’s
Web site at (https://www.chx.com/rules/
proposed_rules.htm), at the principal
office of the Exchange, and in the
Commission’s Public Reference Room.
Through this proposal, the Exchange
seeks to clarify monthly applicability of
the Exchange’s SRO Fee. The
Exchange’s Fee Schedule has for many
years contained a provision establishing
an SRO Fee of $100. Prior to the
Exchange’s demutualization in February
of 2005, this provision of the Fee
Schedule indicated that the SRO Fee
was ‘‘$100 per member and member
organization per month.’’
In connection with the
demutualization rule changes, this
provision was modified to delete the
‘‘per month’’ reference. Despite the
deletion of the ‘‘per month’’ reference,
the Exchange did not intend to modify
its long-standing practice of assessing
the SRO Fee on a monthly basis. Indeed,
since the provision was modified in
February of 2005, the Exchange has
consistently billed each CHX participant
for the $100 SRO Fee on a monthly basis
and the Exchange intends to continue
this monthly assessment. To eliminate
any confusion, however, the Exchange
is submitting this proposed rule change
to the Fee Schedule to reincorporate the
‘‘per month’’ language.
2. Statutory Basis
CHX believes that the proposed rule
change is consistent with the provisions
of Section 6(b)(4) of the Act 5 in that it
provides for the equitable allocation of
reasonable dues, fees and other charges
among its members.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
wwhite on PROD1PC61 with NOTICES
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
CHX does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
In its filing with the Commission,
CHX included statements concerning
the purpose of, and basis for, the
proposed rule change and discussed any
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.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(2).
2 17
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16:40 Aug 01, 2006
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change
establishes or changes a due, fee or
other charge imposed by the Exchange
and therefore has become effective
pursuant to Section 19(b)(3)(A) of the
Act 6 and Rule 19b–4(f)(2) thereunder.7
At any time within 60 days of the filing
of such proposed rule change, the
Commission may summarily abrogate
such proposed 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
No. SR–CHX–2006–21 on the subject
line.
Paper Comments
• 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
Number SR–CHX–2006–21. 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
6 15
5 15
Jkt 208001
PO 00000
U.S.C. 78f(b)(4).
Frm 00119
Fmt 4703
7 17
Sfmt 4703
E:\FR\FM\02AUN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
02AUN1
]]>Agencies
[Federal Register Volume 71, Number 148 (Wednesday, August 2, 2006)]
[Notices]
[Pages 43823-43828]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-12429]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54224; File No. 4-523]
Program for Allocation of Regulatory Responsibilities Pursuant
to Rule 17d-2; Notice of Filing of the Plan for Allocation of
Regulatory Responsibilities Between NYSE Arca, Inc. and the National
Association of Securities Dealers, Inc.
July 27, 2006.
Pursuant to Section 17(d) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 17d-2 thereunder,\2\ notice is hereby given that
on January 20, 2006, NYSE Arca, Inc.\3\ (``NYSE Arca'') and the
National Association of Securities Dealers, Inc. (``NASD'')
[[Page 43824]]
(together with the NYSE Arca, the ``Parties'') filed with the
Securities and Exchange Commission (``Commission'') an amended and
restated plan for the allocation of regulatory responsibilities. On
July 25, 2006, the Parties submitted a revised amended and restated
plan. The Commission is publishing this notice to solicit comments on
the revised amended and restated 17d-2 plan from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78q(d).
\2\ 17 CFR 240.17d-2.
\3\ NYSE Arca, Inc. was formerly called the Pacific Exchange,
Inc. (``PCX''). On March 6, 2006, PCX filed with the Commission a
proposed rule change, which was effective upon filing, to change the
name of the PCX, as well as several other related entities, to
reflect Archipelago Holdings, Inc.'s (``Archipelago'') recent
acquisition of PCX and the merger of the New York Stock Exchange,
Inc. with Archipelago. See Securities Exchange Act Release No. 53615
(April 7, 2006), 71 FR 19226 (April 13, 2006).
---------------------------------------------------------------------------
I. Introduction
Section 19(g)(1) of the Act,\4\ among other things, requires every
self-regulatory organization (``SRO'') registered as either a national
securities exchange or registered securities association to examine
for, and enforce compliance by, its members and persons associated with
its members with the Act, the rules and regulations thereunder, and the
SRO's own rules, unless the SRO is relieved of this responsibility
pursuant to Section 17(d) \5\ or 19(g)(2) \6\ of the Act. Without this
relief, the statutory obligation of each individual SRO could result in
a pattern of multiple examinations of broker-dealers that maintain
memberships in more than one SRO (``common members''). Such regulatory
duplication would add unnecessary expenses for common members and their
SROs.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78s(g)(1).
\5\ 15 U.S.C. 78q(d).
\6\ 15 U.S.C. 78s(g)(2).
---------------------------------------------------------------------------
Section 17(d)(1) of the Act \7\ was intended, in part, to eliminate
unnecessary multiple examinations and regulatory duplication.\8\ With
respect to a common member, Section 17(d)(1) authorizes the Commission,
by rule or order, to relieve an SRO of the responsibility to receive
regulatory reports, to examine for and enforce compliance with
applicable statutes, rules, and regulations, or to perform other
specified regulatory functions.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78q(d)(1).
\8\ See Securities Act Amendments of 1975, Report of the Senate
Committee on Banking, Housing, and Urban Affairs to Accompany S.
249, S. Rep. No. 94-75, 94th Cong., 1st Session 32 (1975).
---------------------------------------------------------------------------
To implement Section 17(d)(1), the Commission adopted two rules:
Rule 17d-1 and Rule 17d-2 under the Act.\9\ Rule 17d-1 authorizes the
Commission to name a single SRO as the designated examining authority
(``DEA'') to examine common members for compliance with the financial
responsibility requirements imposed by the Act, or by Commission or SRO
rules.\10\ When an SRO has been named as a common member's DEA, all
other SROs to which the common member belongs are relieved of the
responsibility to examine the firm for compliance with the applicable
financial responsibility rules. On its face, Rule 17d-1 deals only with
an SRO's obligations to enforce member compliance with financial
responsibility requirements. Rule 17d-1 does not relieve an SRO from
its obligation to examine a common member for compliance with its own
rules and provisions of the federal securities laws governing matters
other than financial responsibility, including sales practices and
trading activities and practices.
---------------------------------------------------------------------------
\9\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
\10\ See Securities Exchange Act Release No. 12352 (April 20,
1976), 41 FR 18809 (May 3, 1976).
---------------------------------------------------------------------------
To address regulatory duplication in these and other areas, the
Commission adopted Rule 17d-2 under the Act.\11\ Rule 17d-2 permits
SROs to propose joint plans for the allocation of regulatory
responsibilities with respect to their common members. Under paragraph
(c) of Rule 17d-2, the Commission may declare such a plan effective if,
after providing for notice and comment, it determines that the plan is
necessary or appropriate in the public interest and for the protection
of investors, to foster cooperation and coordination among the SROs, to
remove impediments to, and foster the development of, a national market
system and a national clearance and settlement system, and is in
conformity with the factors set forth in Section 17(d) of the Act.
Commission approval of a plan filed pursuant to Rule 17d-2 relieves an
SRO of those regulatory responsibilities allocated by the plan to
another SRO.
---------------------------------------------------------------------------
\11\ See Securities Exchange Act Release No. 12935 (October 28,
1976), 41 FR 49093 (November 8, 1976).
---------------------------------------------------------------------------
II. Proposed Plan
The Parties currently operate pursuant to a 17d-2 plan in which the
NASD assumed certain inspection, examination, and enforcement
responsibility for common members with respect to certain applicable
laws, rules, and regulations (the ``current NASD-PCX 17d-2 Plan'').\12\
On September 22, 2005, the Commission approved a proposed rule change
submitted by PCX, the predecessor to NYSE Arca,\13\ relating to the
acquisition of PCX Holdings, Inc. by Archipelago.\14\ In that filing,
PCX committed to amend the current NASD-PCX 17d-2 Plan within 90 days
of the Commission's approval of SR-PCX-2005-90 to expand the scope of
the NASD's regulatory functions under the plan so as to encompass all
of the regulatory oversight and enforcement responsibilities with
respect to the broker-dealer affiliate of Archipelago, Archipelago
Securities, L.L.C.\15\ This time period has been extended three
times.\16\
---------------------------------------------------------------------------
\12\ See Securities Exchange Act Release Nos. 14095 (October 25,
1977), 42 FR 57198 (November 1, 1977) (File No. 4-267) (notice of
1977 Agreement); 15191 (September 26, 1978), 43 FR 46093 (October 5,
1978) (File No. 4-267) (order granting temporary approval); 15722
(April 12, 1979), 44 FR 23616 (April 20, 1979) (File No. 4-267)
(extension of time to file amendments); 15941 (June 21, 1979) (File
No. 4-267), SEC Docket, Vol. 17, no. 14, page 995 (July 3, 1979)
(further extension of time to file required amendments); 16462
(January 2, 1980), 45 FR 2121 (January 10, 1980) (File No. 4-267)
(order granting temporary approval); 16591 (February 20, 1980), 45
FR 12573 (February 26, 1980) (File No. 4-267) (notice of 1980
Amendment); 16719 (April 2, 1980), 45 FR 23841 (April 8, 1980) (File
No. 4-267) (order granting temporary approval); and 16858 (May 30,
1980), 45 FR 37927 (June 5, 1980) (File No. 4-267) (approval order).
\13\ See supra note 3.
\14\ See Securities Exchange Act Release No. 52497 (September
22, 2005), 70 FR 56949 (September 29, 2005) (approving SR-PCX-2005-
90, as amended).
\15\ Archipelago Securities acts as the outbound order router
for the NYSE Arca Marketplace (formerly, the Archipelago Exchange,
or ArcaEx), the equities trading facility of NYSE Arca.
\16\ See Securities Exchange Act Release Nos. 52995 (December
21, 2005), 70 FR 77232 (December 29, 2005); 53545 (March 23, 2006),
71 FR 16183 (March 30, 2006); and 54046 (June 26, 2006), 71 FR 37965
(July 3, 2006).
---------------------------------------------------------------------------
On January 20, 2006, the Parties submitted an amended and restated
17d-2 plan for review and approval by the Commission. On July 25, 2006,
the Parties submitted a revised amended and restated plan. The revised
amended and restated plan is intended to replace and supersede the
current NASD-PCX 17d-2 Plan and all prior amendments thereto in their
entirety. The revised amended and restated 17d-2 plan is intended to
reduce regulatory duplication for firms that are common members of NYSE
Arca and the NASD. The text of the plan delineates regulatory
responsibilities with respect to the Parties, including responsibility
for NYSE Arca rules. Included in the revised amended and restated plan
is an attachment (``NYSE Arca Rules Certification for 17d-2 Agreement
with NASD,'' referred to herein as the ``Certification'') that lists
every NYSE Arca rule and the federal securities laws and rules and
regulations thereunder for which, under the plan, the NASD would bear
responsibility for overseeing and enforcing with respect to common
members. In particular, under the revised amended and restated 17d-2
plan, the NASD would assume examination and enforcement responsibility
relating to compliance by dual members and persons associated therewith
with the rules of NYSE Arca that are substantially similar to the rules
[[Page 43825]]
of the NASD (``Common Rules''), as well as any provisions of the
federal securities laws and the rules and regulations thereunder
delineated in the Certification.\17\ Under the plan, NYSE Arca would
retain full responsibility for surveillance and enforcement with
respect to trading activities or practices involving NYSE Arca's own
marketplace; registration pursuant to its unique rules (i.e., non-
common rules); its duties as a Designated Examining Authority pursuant
to Rule 17d-1 under the Act; and any rules that are not substantially
similar to the rules of the NASD, except for NYSE Arca rules for any
broke-dealer subsidiary of Archipelago.\18\
---------------------------------------------------------------------------
\17\ See paragraph 2 of the revised amended and restated 17d-2
plan. The Commission notes that there is only one federal security
law rule on the Certification, Rule 200 of Regulation SHO.
\18\ See id. Apparent violations of such NYSE Arca rules by any
broker-dealer subsidiary of Archipelago will be processed by, and
enforcement proceedings will be conducted by, the NASD. See
paragraph 5 of the revised amended and restated 17d-2 plan.
---------------------------------------------------------------------------
The text of the revised amended and restated 17d-2 plan is as
follows:
Agreement Between the NASD and NYSA Arca, Inc. Pursuant to Sec Rule
17d-2 Under the Securities Exchange Act of 1934
This Agreement, between the National Association of Securities
Dealers, Inc. (``NASD'') and the NYSE Arca, Inc. (``NYSE Arca''), is
made this 25th day of July, 2006, pursuant to the provisions of SEC
Rule 17d-2 under the Securities Exchange Act of 1934 which calls for
agreements between self-regulatory organizations for plans to reduce or
eliminate regulatory duplication.
This Agreement supersedes and replaces Agreements entered into
between the parties on May 27, 1977 and January 20, 2006, entitled
``Agreement Between the National Association of Securities Dealers,
Inc. and the Pacific Stock Exchange, Inc. Pursuant to SEC Rule 17d-2
Under the Securities Exchange Act of 1934,'' and any subsequent
amendments thereafter.
Whereas, NASD and NYSE Arca are desirous of reducing duplication in
the examination of their dual members (a broker-dealer firm which is a
member of both NASD and NYSE Arca) and in the filing and processing of
certain registration and membership records; and
Whereas, NASD and NYSE Arca are desirous of executing a plan
covering such subjects pursuant to the provisions of Rule 17d-2 and
filing such with the Commission for its approval.
Now, therefore, in consideration of the mutual covenants contained
hereafter, the said NASD and NYSE Arca hereby agree as follows:
1. That NASD will assume regulatory responsibilities for all firms
who are members of NYSE Arca and NASD (``dual members''). NYSE Arca
shall furnish NASD with a current list of dual members, which shall be
updated no less frequently than once each quarter.
2. For purposes of this plan, the term ``regulatory
responsibilities'' shall mean the examination and enforcement
responsibility relating to compliance by the dual members and persons
associated therewith with the rules of NYSE Arca that are substantially
similar to the rules of NASD in that the NYSE Arca's rule would not
require NASD to develop one or more new examination standards, modules,
procedures, or criteria in order to analyze the application of the
rule, or a dual member's activity, conduct, or output in relation to
such rule, (the ``Common Rules''). Prior to the effective date of this
Agreement, NYSE Arca shall furnish NASD with a current list of Common
Rules (``Certification''), and NASD will confirm in writing whether the
rules listed in the Certification are Common Rules as defined in this
Agreement. Each year following the commencement of operation of this
Agreement, or more frequently if required by changes in either the
rules of NYSE Arca or NASD, NYSE Arca shall submit an updated list of
Common Rules to NASD for review which shall add NYSE Arca rules not
included in the current list of Common Rules that qualify as Common
Rules as defined in this Agreement; delete NYSE Arca rules included in
the current list of Common Rules that no longer qualify as Common Rules
as defined in this Agreement; and confirm that the remaining rules on
the current list of Common Rules continue to be NYSE Arca rules that
qualify as Common Rules as defined in this Agreement. Within 30 days of
receipt of such updated list, NASD will confirm in writing whether the
rules listed in any updated list are Common Rules as defined in this
Agreement. Regulatory responsibilities under this Agreement shall also
extend to those provisions of the federal securities laws and rules and
regulations thereunder listed in the Certification.
The term ``enforcement responsibility'' shall mean the conduct of
appropriate proceedings, in accordance with the NASD Code of Procedure
(the Rule 9000 Series) and other applicable NASD procedural rules, to
determine whether violations of pertinent laws, rules or regulations
have occurred, and if such violations are deemed to have occurred, the
imposition of appropriate sanctions as specified under the NASD's Code
of Procedure and sanctions guidelines. Notwithstanding anything herein
to the contrary, it is explicitly understood that the term ``regulatory
responsibilities'' does not include, and NYSE Arca will retain full
responsibility for (unless otherwise addressed by separate agreement or
rule):
(a) Surveillance and enforcement with respect to trading activities
or practices involving NYSE Arca's own marketplace, including without
limitation NYSE Arca's rules relating to the rights and obligations of
market makers;
(b) Registration pursuant to its applicable rules of associated
persons (i.e., registration rules that are not Common Rules);
(c) Discharge of its duties and obligations as a Designated
Examining Authority pursuant to Rule 17d-1 under the Act; and
(d) Any rules of NYSE Arca that are not substantially similar to
the rules of NASD, except for NYSE Arca rules for any broker-dealer
subsidiary of Archipelago Holdings, Inc. as provided in paragraph 5.
3. There shall be no charge to NYSE Arca by NASD for performing the
stated regulatory responsibilities under this plan except as
hereinafter provided. NASD will provide NYSE Arca with ninety (90) days
advance written notice in the event NASD decides to impose any charges
to NYSE Arca for performing the stated regulatory responsibilities
under this plan. If it becomes necessary to impose a charge, NYSE Arca
shall have the right at the time of the imposition of such to terminate
this Agreement; provided, however, that NASD's regulatory
responsibilities under this Agreement shall continue until the SEC
approves the termination of this Agreement.
4. Notwithstanding any provision hereof, this Agreement shall be
subject to any statute, or any rule or order of the Securities and
Exchange Commission, or industry agreement, restructuring the
regulatory framework of the securities industry or reassigning
regulatory responsibilities between self-regulatory organizations. To
the extent such is inconsistent with this Agreement, such shall
supersede the provisions hereof to the extent necessary for them to be
properly effectuated and the provisions hereof in that respect shall be
null and void.
5. Should NASD become aware of apparent violations of NYSE Arca's
rules, which are not listed as Common Rules, discovered pursuant to the
performance of the regulatory
[[Page 43826]]
responsibilities assumed hereunder, NASD will notify NYSE Arca of those
apparent violations. With respect to apparent violations of any NYSE
Arca rules by any broker-dealer subsidiary of NYSE Arca's parent
company, Archipelago Holdings, Inc., NASD shall not make referrals to
NYSE Arca pursuant to this Item 5. Such apparent violations shall be
processed by, and enforcement proceedings in respect thereto will be
conducted by, NASD as provided in this agreement. Apparent violations
of all other applicable rules, including violations of the various
securities acts, and rules and regulations thereunder, will be
processed by, and enforcement proceedings in respect thereto will be
conducted by NASD as provided hereinbefore; provided however that in
the event a covered dual member or a person associated therewith is the
subject of an investigation relating to a transaction on NYSE Arca,
NYSE Arca may in its discretion assume concurrent jurisdiction and
responsibility. Each party agrees to make available promptly all files,
records and witnesses necessary to assist the other in its
investigation or proceedings.
6. NASD will make available to NYSE Arca all information obtained
by it in the performance by it of the regulatory responsibilities
hereunder in respect to the firms which are subject to this Agreement.
In particular, and not in limitation of the foregoing, NASD will
furnish NYSE Arca any information it obtains about dual members which
reflects adversely on their financial condition and which should be
known by NYSE Arca or any subsidiaries thereof. It is understood that
such information is of an extremely sensitive nature and, accordingly,
NYSE Arca agrees to take all reasonable steps to maintain its
confidentiality. NYSE Arca will supply NASD any information coming to
its attention that reflects adversely on the financial condition of
dual members or indicates possible violations of applicable laws, rules
or regulations by such firms.
7. Dual members subject to this agreement will be required to
submit, and NASD will be responsible for processing and acting upon all
applications submitted on behalf of allied persons, partners, officers,
registered personnel and any other person required to be approved by
the rules of both NYSE Arca and NASD or associated with dual members
thereof. NASD shall advise NYSE Arca monthly of any changes of allied
members, partners, officers, registered personnel and other persons
required to be approved by the rules of both NYSE Arca and NASD. Dual
members will be required to send to NASD all letters, termination
notices or other material respecting these individuals. When as a
result of processing said submissions NASD becomes aware of a statutory
disqualification as defined in the Securities Exchange Act of 1934 with
respect to a dual member or person associated with a dual member, NASD
will determine pursuant to sections 15A(g) and/or section 6(c) the
acceptability or continued applicability of the person to whom such
disqualification applies and keep NYSE Arca advised of its actions in
this regard.
NASD will also be responsible for processing and, if required,
acting upon all requests for the opening, address changes, and
terminations of branch offices by dual members and any other
applications required of dual members under the Common Rules as they
may be amended from time to time. NASD will advise NYSE Arca monthly of
the opening, address change and termination of branch and main offices
of dual members and the names of such branch office managers.
8. NYSE Arca shall forward to NASD copies of all customer
complaints involving dual members and persons associated therewith
received by it relating to NASD's regulatory responsibilities under
this Agreement. It shall be NASD's responsibility to review and take
appropriate action in respect to such complaints.
9. NASD shall assume responsibility to review the advertising of
dual members subject to the Agreement, provided that such material is
filed with NASD in accordance with NASD's filing procedures and is
accompanied with any applicable filing fees. Such review will be made
in accordance with then applicable NASD rules and interpretations. In
all cases of dual members subject to this Agreement, the advertising of
dual members shall be subject only to compliance with appropriate NASD
rules and interpretations.
10. Nothing contained in this Agreement shall restrict or in any
way encumber the right of NASD or NYSE Arca to conduct special or cause
examinations of dual members and persons associated therewith as NASD
or NYSE Arca, in their sole discretions, shall deem appropriate.
11. NYSE Arca recognizes that, pursuant to this Agreement, NASD
will maintain an available and appropriate mechanism for considering
and acting upon requests by dual members for extensions of time
pursuant to Federal Reserve Regulation T and SEC Rule 15c3-3 of the
Securities Exchange Act of 1934. NASD will keep NYSE Arca informed with
respect to its activities in granting extensions of time pursuant to
Regulation T and Rule 15c3-3 to dual members in such form and content
as reasonably determined by NASD.
12. Should a dispute arise between the parties as to the operation
of this Agreement, NYSE Arca and NASD agree that any such dispute shall
be settled by arbitration in Washington, DC in accordance with the
rules of the American Arbitration Association then in effect, or such
other procedures as the parties may mutually agree upon. Judgment on
the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction.
13. This Agreement may be cancelled by NYSE Arca or NASD at any
time with the approval of the Securities and Exchange Commission upon
one (1) year's written notice, except as provided in paragraph 3.
14. This Agreement shall be effective upon approval of the
Securities and Exchange Commission.
15. This Agreement is wholly separate from the multiparty Agreement
made pursuant to SEC Rule 17d-2 of the Securities Exchange Act of 1934
between the American Stock Exchange LLC, the Boston Stock Exchange,
Inc., the Chicago Board Options Exchange, Inc., the International
Securities Exchange, Inc., the National Association of Securities
Dealers, Inc., the New York Stock Exchange, Inc., the Pacific Exchange,
Inc., and the Philadelphia Stock Exchange involving the allocation of
regulatory responsibilities with respect to common members for
compliance with common rules relating to the conduct by broker-dealers
of accounts for listed options or index warrants entered into on
January 14, 2004, and as may be amended from time to time.
Limitation of Liability
Neither NASD nor NYSE Arca nor any of their respective directors,
governors, officers or employees shall be liable to the other party to
this plan for any liability, loss or damage resulting from or claimed
to have resulted from any delays, inaccuracies, errors or omissions
with respect to the provision of regulatory responsibilities as
provided hereby or for the failure to provide any such responsibility,
except with respect to such liability, loss or damages as shall have
been suffered by one or the other of NASD or NYSE Arca and caused by
the willful misconduct of the other party or their respective
directors, governors, officers or employees. No warranties, express or
implied, are made
[[Page 43827]]
by NASD or NYSE Arca with respect to any of the responsibilities to be
performed by each of them hereunder.
Relief From Responsibility
Pursuant to Sections 17(d)(1)(A) and 19(g) of the Securities
Exchange Act of 1934 and Rule 17d-2 promulgated pursuant thereto, NASD
and NYSE Arca join in requesting the Commission, upon its approval of
this plan or any part thereof, to relieve NYSE Arca of any and all
responsibilities with respect to matters allocated to NASD pursuant to
this plan.
NYSE Arca Certification
NYSE Arca Rules Certification for 17d-2 Agreement With NASD
NYSE Arca, Inc. hereby certifies that the requirements contained in
the rules listed below for NYSE Arca Equities, Inc., a wholly-owned
subsidiary, are identical to, or substantially similar to, comparable
NASD rules (``Common Rules'') as of July 2006.\19\
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\19\ The Commission notes that the Certification attached to the
executed revised amended and restated plan also includes references
to the NASD rules to which the Common Rules are identical or
substantially similar. Further, the Certification notes that, with
respect to several of the NYSE Arca rules, NYSE Arca will be
responsible for any significant differences between its rule and the
comparable NASD rule identified, until such time amendments to such
rule(s) may be approved. A copy of the revised amended and restated
plan, including the Certification, is available on the Commission's
Web site at https://www.sec.gov.
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Rule Description
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2.15............................. Responsibilities of Non-Resident
Firms.
2.21............................. Employees of ETP Holder Registration.
2.24............................. ETP Books and Records.
6.1.............................. Adherence to Law.
6.2.............................. Prohibited Acts.
6.6.............................. Front-Running of Block Transactions.
6.13............................. Disciplinary Action By Other
Organizations.
6.15............................. Miscellaneous Prohibitions.
6.16............................. Trading Ahead of Customer Limit
Orders.
6.17............................. Anti-Money Laundering Compliance
Program.
6.18............................. Supervision.
8.4.............................. Account Approval.
8.5.............................. Suitability.
8.6.............................. Discretionary Accounts.
8.7.............................. Supervision of Accounts.
8.8.............................. Customer Complaints.
8.9.............................. Prior Approval of Certain
Communications to Customers.
9.1(a)........................... Register with the Corporation.
9.1(c)........................... Office Supervision.
9.1(d)........................... Designation of Firm Principal.
9.1(e)........................... Guarantees.
9.1(f)........................... Sharing Profits--Losses.
9.2(b)........................... Account Supervision.
9.2(c)........................... Customer Records.
9.3(a)........................... Employee Accounts.
9.3(b)........................... ETP Holder and Allied Person
Accounts.
9.4.............................. Proxies Voting.
9.5.............................. Solicitation Expense.
9.6(a)........................... Discretion as to Customers' Accounts.
9.6(b)........................... Records of Discretionary Accounts.
9.7(a)........................... Pledging Customer Securities.
9.7(b)........................... Use of Customer Securities.
9.7(c)........................... Customer Protection--Reserves and
Custody of Securities.
9.7(d)........................... Agreements for Use of Customer
Securities.
9.10............................. Assuming Losses.
9.11............................. Confirmations.
9.12............................. COD Orders--Partial Delivery.
9.13............................. Long Sales.
9.14............................. Account Designation.
9.15............................. Statements of Account to Customers.
9.17............................. Books and Records.
9.19............................. Transfer of Accounts.
9.20(b).......................... Telemarketing.
9.21(a).......................... Policy.
9.22(a).......................... Advertisements.
9.23............................. Sales Literature--Market Letters.
9.24............................. Radio, Television, Telephone and
Other Reports.
9.25............................. Standards.
9.27............................. Registration of Representatives.
9.27............................. Regulatory Element.
9.29............................. Borrowing From or Lending to
Customers.
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In addition, the following provisions of the Securities Exchange Act of
1934, and rules and regulations thereunder, shall be part of this 17d-2
Agreement: Rule 200 of Regulation SHO-Definition of ``Short Sale'' and
Marking Requirements.
III. Date of Effectiveness of the Proposed Plan and Timing for
Commission Action
Pursuant to Section 17(d)(1) of the Act \20\ and Rule 17d-2
thereunder,\21\ after August 23, 2006, the Commission may, by written
notice, declare the plan submitted by NYSE Arca and the NASD, File No.
4-523, effective if the Commission finds that the plan is necessary or
appropriate in the public interest and for the protection of investors,
to foster cooperation and coordination among self-regulatory
organizations, or to remove impediments to and foster the development
of the national market system and a national system for the clearance
and settlement of securities transactions and in conformity with the
factors set forth in Section 17(d) of the Act.
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\20\ 15 U.S.C. 78q(d)(1).
\21\ 17 CFR 240.17d-2.
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IV. Solicitation of Comments
In order to assist the Commission in determining whether to approve
the revised amended and restated 17d-2 plan and to relieve NYSE Arca of
the responsibilities which would be assigned to the NASD, interested
persons are invited to submit written data, views, and arguments
concerning the foregoing. Comments may be submitted by any of the
following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/other.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number 4-523 on the subject line.
Paper Comments
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 Number 4-523. 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/other.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed plan that are filed with the
Commission, and all written communications relating to the proposed
plan 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 Room. Copies of the plan 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 4-523
and should be submitted on or before August 23, 2006.
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\22\ 17 CFR 200.30-3(a)(34).
[[Page 43828]]
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\22\
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-12429 Filed 8-1-06; 8:45 am]
BILLING CODE 8010-01-P
