Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto Relating to Amendments to Registration Rules of NYSE Arca Equities, Inc., 5780-5782 [E7-2000]
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Federal Register / Vol. 72, No. 25 / Wednesday, February 7, 2007 / Notices
fees, and other charges among the
exchange’s members and issuers and
other persons using its facilities. The
Commission also finds that the
proposed rule change is consistent with
Section 6(b)(5) of the Act,7 which
requires, among other things, that the
rules of the 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 a national market
system, and, in general, to protect
investors and the public interest.
The Commission believes that the
proposed rule change should help to
increase transparency regarding the
processes NYSE Regulation has in place
to ensure that the power of the
Exchange, through NYSE Regulation, to
impose fines on its members for
disciplinary violations is exercised
appropriately, and particularly to guard
against the possibility that fines may be
assessed to respond to budgetary needs
rather than to serve a disciplinary
purpose.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,8 that the
proposed rule change (SR–NYSE–2006–
109) is approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.9
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–1947 Filed 2–6–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55214; File No. SR–
NYSEArca–2006–50]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change and Amendment No. 1
Thereto Relating to Amendments to
Registration Rules of NYSE Arca
Equities, Inc.
sroberts on PROD1PC70 with NOTICES
January 31, 2007.
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 November
14, 2006, NYSE Arca, Inc. (‘‘NYSE
Arca’’ or ‘‘Exchange’’), through its
wholly owned subsidiary NYSE Arca
Equities, Inc. (‘‘NYSE Arca Equities’’ or
‘‘Corporation’’), filed with the Securities
and Exchange Commission
7 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(2).
9 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
8 15
VerDate Aug<31>2005
21:36 Feb 06, 2007
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
substantially prepared by the Exchange.
The Exchange filed Amendment No. 1
to the proposed rule change on January
12, 2007. The Commission is publishing
this notice to solicit comments on the
proposed rule change, as amended, from
interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange, through its wholly
owned subsidiary NYSE Arca Equities,
proposes to amend certain NYSE Arca
Equities Rules governing registration of
employees of Equity Trading Permit
(‘‘ETP’’) Holders 3 in order to clarify
registration procedures and make them
consistent with the procedures of other
self-regulatory organizations (‘‘SROs’’).
The text of the proposed rule change is
available at NYSE Arca, the
Commission’s Public Reference Room,
and www.nysearca.com/regulation/
filings.asp.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
NYSE Arca Equities Rules 2.4, 2.21, and
9.27 (referred to herein as Rules 2.4,
2.21 and 9.27) in order to clarify
registration procedures and ongoing
compliance obligations for ETP Holders
and their registered persons. Further,
the Exchange proposes to amend these
rules so that they are consistent with
industry practices and with the
operation of the Central Registration
Depository (‘‘CRD’’) system maintained
by the National Association of
Securities Dealers, Inc. (‘‘NASD’’). The
3 See
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PO 00000
NYSE Arca Equities Rule 1.1(n).
Frm 00106
Fmt 4703
Sfmt 4703
proposed rule changes are similar to the
rules of other SROs.4
Consideration of Requests for Waivers of
Examination Requirements
The Exchange proposes to amend
Rule 2.4(c), which governs requests
from ETP Holder applicants to waive
applicable examinations requirements
prescribed by the Exchange.
Specifically, the Exchange proposes to
add new waiver standards under which
the Corporation has discretion to grant
waivers so that the Exchange’s practices
are generally consistent with the
criterion set forth in NASD Rule 1070(d)
and Supplementary Material .15(1)(b) to
NYSE Rule 345.
Filing of Registration Documentation
with the Exchange
The Exchange proposes to amend
Rule 2.21, which governs registration
procedures for employees of ETP
Holders. Specifically, the Exchange
proposes to amend the rule to provide
manual registration procedures for
registration categories (e.g., floor clerk)
for which CRD does not provide
electronic registration.5
Continuing Education Requirements
Currently, employees of ETP Holders
who wish to initiate and maintain
registration with the Corporation must
follow two separate rules—Rules 2.21
and 9.27. Rule 2.21 sets forth initial
registration requirements, whereas Rule
9.27 sets forth the continuing education
requirements that must be satisfied to
maintain registration with the
Corporation.
In order to simplify compliance for
employees of ETP Holders, the
Exchange proposes to provide
continuing registration requirements in
the same rule as initial registration
requirements. Specifically, the
Exchange proposes to add continuing
education requirements to new Rule
2.21(d) and certain definitions and
clarifications with respect thereto to
new Commentary .01–.06 to Rule 2.21.
The continuing education
requirements in proposed new Rule
2.21(d) and related Commentary .01–.06
4 See NASD Rules 1070(d) and 1120(a) and (b)
and New York Stock Exchange LLC (‘‘NYSE’’) Rule
345A and Supplementary Material .15(1)(b) to
NYSE Rule 345.
5 In 2005, NYSE Arca (formerly Pacific Exchange,
Inc.) became a participant of the CRD system for
maintenance of certain registration categories with
the Exchange. As part of this implementation,
applicable rules of the Exchange were amended to
address filing appropriate registration
documentation electronically with the CRD system
for employees of ETP Holders. These amended
rules, however, inadvertently omitted certain
registration procedures for positions not available
on the CRD system.
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07FEN1
sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 72, No. 25 / Wednesday, February 7, 2007 / Notices
to Rule 2.21 are substantially similar to
those contained in current Rule 9.27(c)
and (d) and related Commentary .01–.06
to Rule 9.27(c) and (d), except that the
Exchange has made certain
clarifications so that the continuing
education requirements and related
definitions and clarifications are more
closely aligned with NASD Rule 1120
and NYSE Rule 345A and other cleanup changes, as set forth in detail below.
Specifically, the Exchange proposes
in Rule 2.21(d)(1) that the content of the
Regulatory Element of the program shall
be consistent with the standards set
forth by the Corporation and other
SROs, rather than just determined by
the Corporation as is set forth in the
current Rule 9.27(c). In addition, the
Exchange proposes to add language in
Rule 2.21(d)(2)(B)(i) providing that if an
ETP Holder’s analysis establishes the
need for supervisory training for
persons with supervisory
responsibilities, such training must be
included in the ETP Holder’s training
plan. Such language is not included in
the current Rule 9.27(d)(2)(A).
The Exchange has not proposed for
inclusion NASD’s continuing education
requirements applicable to research
analysts because the Corporation does
not provide for research analyst
registration. Additionally, unlike
current NASD Rule 1120(a)(6), the
Corporation is not proposing to permit
ETP Holders to self-administer the
Regulatory Element of continuing
education, as the Corporation does not
have the resources or capability to offer
an approval process or monitoring of
such self-administered programs. ETP
Holders will be responsible for ensuring
continuing education information
related to their associated persons is
received by the firm in a timely manner
and, as such, shall designate a person or
persons to receive applicable
information via electronic mail directly
from the CRD system. ETP Holders will
not be required to submit to the
Corporation the names of such
designated persons, as is required by the
current NASD rule. This is based on the
fact that the Corporation does not have
a contact management system
comparable to that of NASD.
With respect to the proposed new
Commentary to Rule 2.21, the Exchange
proposes to add a definition of
‘‘registered person’’ to Commentary .01
to Rule 2.21 as is currently set forth in
Commentary .01 to Rule 9.27(c) and (d),
except that the definition that the
Exchange is proposing does not include
the carve-out for ‘‘any such person
whose activities are limited solely to the
transaction of business on the facilities
of the Corporation with ETP Holders or
VerDate Aug<31>2005
21:36 Feb 06, 2007
Jkt 211001
registered broker-dealers.’’ In addition,
the Exchange proposes in Commentary
.04 to Rule 2.21 to correct a mistake in
the language in Commentary .04 to Rule
9.27(c) and (d) to provide that
reassociated registered persons shall
participate in the Regulatory Element at
intervals based on their initial base date,
rather than their new base date. Lastly,
the Exchange proposes in Commentary
.06 to Rule 2.21 to change the reference
of ‘‘any registered member who is an
ETP Holder,’’ which is currently in
Commentary .06 to Rule 9.27(c) and (d),
to ‘‘any registered person associated
with an ETP Holder’’ in order to be
consistent with the language of other
SROs.
In connection with the addition of
proposed new Rule 2.21(d) and
Commentary .01–.06 to Rule 2.21 as set
forth above, the Exchange proposes to
delete the specific continuing education
requirements in Rule 9.27(c) and (d) and
the related Commentary .01–.06 to Rule
9.27(c) and (d). The purpose for deleting
the continuing education requirements
in Rule 9.27(c) and (d) is to avoid
needless repetition and risk of
inconsistencies. The Exchange proposes
to include cross-reference language in
Rule 9.27(c) that provides that registered
persons shall follow the continuing
education requirements set forth in Rule
2.21(d).
In addition, the Exchange proposes to
delete current Rule 2.21(i) with respect
to transition to the CRD system because
registration with CRD is already
provided for in Rule 2.21(a).
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with Section
6(b) of the Act 6 in general, and furthers
the objectives of Section 6(b)(5) 7 in
particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, and to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
6 15
7 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00107
Fmt 4703
Sfmt 4703
5781
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
Written comments on the proposed
rule change were neither solicited nor
received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
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 Exchange 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 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–NYSEArca–2006–50 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–NYSEArca–2006–50. 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
E:\FR\FM\07FEN1.SGM
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Federal Register / Vol. 72, No. 25 / Wednesday, February 7, 2007 / Notices
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 such filing also will be
available for inspection and copying at
the principal office of NYSE Arca. 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–NYSEArca–2006–50 and
should be submitted on or before
February 28, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.8
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–2000 Filed 2–6–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55194; File No. SR–
NYSEArca–2007–11]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to NYSE Arca
Marketplace Trading Sessions
January 30, 2007.
sroberts on PROD1PC70 with NOTICES
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 January
26, 2007, NYSE Arca, Inc. (‘‘NYSE
Arca’’ or ‘‘Exchange’’), through its
wholly owned subsidiary NYSE Arca
Equities, Inc. (‘‘NYSE Arca Equities’’),
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been substantially prepared by the
Exchange. The Exchange filed the
proposal pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(6)
thereunder,4 which renders the
proposed rule change effective upon
filing with the Commission.
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to update the
list in NYSE Arca Equities Rule 7.34 of
securities eligible to trade in one or
more, but not all three, of the
Exchange’s trading sessions. The
securities to be added to the list are: (1)
Ultra Russell 2000 ProShares; (2) Ultra
SmallCap600 ProShares; (3) Short
Russell 2000 ProShares; (4) Short
SmallCap600 ProShares; (5) UltraShort
Russell 2000 ProShares; (6) UltraShort
SmallCap600 ProShares (each a
‘‘Fund’’). The shares of each Fund
(‘‘Shares’’) are traded on NYSE Arca,
L.L.C. (‘‘NYSE Arca Marketplace’’), the
equities trading facility of NYSE Arca
Equities, pursuant to unlisted trading
privileges (‘‘UTP’’).
The text of the proposed rule change
is available on the Exchange’s Web site
(https://www.nysearca.com), at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change. The text of
these statements may be examined at
the places specified in Item III below.
The Exchange has prepared summaries,
set forth in Sections A, B, and C below,
of the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
NYSE Arca Equities Rule 7.34
currently provides, in part, that the
NYSE Arca Marketplace shall have three
trading sessions each day: An Opening
Session (1 a.m. Pacific Time (‘‘PT’’) to
6:30 a.m. PT), a Core Trading Session
(6:30 a.m. PT to 1 p.m. PT), and a Late
Trading Session (1 p.m. PT to 5 p.m.
PT), and that the Core Trading Session
for securities described in NYSE Arca
Equities Rules 5.1(b)(13), 5.1(b)(18),
5.2(j)(3), 8.100, 8.200, 8.201, 8.202,
8.203, 8.300, and 8.400 (each, a
‘‘Derivative Securities Product’’) shall
conclude at 1:15 pm PT.5
8 17
5 NYSE Arca Equities Rules 5.1(b)(13), 5.2(j)(3),
8.100, 8.200, 8.201, 8.202, 8.203, 8.300, and 8.400
relate to Unit Investment Trusts, Investment
Company Units, Portfolio Depositary Receipts,
Trust Issued Receipts, Commodity-Based Trust
1 15
VerDate Aug<31>2005
21:36 Feb 06, 2007
Jkt 211001
PO 00000
Frm 00108
Fmt 4703
Sfmt 4703
The Exchange also includes in NYSE
Arca Equities Rule 7.34 a list of those
securities which are eligible to trade in
one or more, but not all three, of the
Exchange’s trading sessions and
maintains on its Web site a list that
identifies all securities traded on the
NYSE Arca Marketplace that do not
trade for the duration of each of the
three sessions specified in NYSE Arca
Equities Rule 7.34. The Exchange
proposes to add the following securities
to these lists: (1) Ultra Russell 2000
ProShares; (2) Ultra SmallCap600
ProShares; (3) Short Russell 2000
ProShares; (4) Short SmallCap600
ProShares; (5) UltraShort Russell 2000
ProShares; (6) UltraShort SmallCap600
ProShares.6 These securities are traded
on the NYSE Arca Marketplace pursuant
to UTP and are Investment Company
Units, described in Exchange Rule
5.2(j)(3).
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,7 in general, and
furthers the objectives of Section
6(b)(5),8 in particular, in that it is
designed to facilitate transactions in
securities, to promote just and equitable
principles of trade, to enhance
competition, and to protect investors
and the public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has neither solicited
nor received written comments on the
proposed rule change.
Shares, Currency Trust Shares, Commodity Index
Trust Shares, Partnership Units, and Paired Trust
Shares, respectively. See Securities Exchange Act
Release No. 54997 (December 21, 2006), 71 FR
78501 (December 29, 2006) (SR–NYSEArca–2006–
77) (relating to amendments to NYSE Arca Equities
Rule 7.34); Securities Exchange Act Release No.
55178 (January 25, 2007) (SR–NYSEArca–2007–02)
(relating to additional amendments to NYSE Arca
Equities Rule 7.34).
6 The Commission approved the trading of the
Shares of the Funds on the NYSE Arca Marketplace
pursuant to UTP in Securities Exchange Act Release
No. 55125 (January 18, 2007), 72 FR 3462 (January
25, 2007) (SR–NYSEArca–2006–87).
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
E:\FR\FM\07FEN1.SGM
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]]>Agencies
[Federal Register Volume 72, Number 25 (Wednesday, February 7, 2007)]
[Notices]
[Pages 5780-5782]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-2000]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55214; File No. SR-NYSEArca-2006-50]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change and Amendment No. 1 Thereto Relating to
Amendments to Registration Rules of NYSE Arca Equities, Inc.
January 31, 2007.
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 November 14, 2006, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange''),
through its wholly owned subsidiary NYSE Arca Equities, Inc. (``NYSE
Arca Equities'' or ``Corporation''), filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been
substantially prepared by the Exchange. The Exchange filed Amendment
No. 1 to the proposed rule change on January 12, 2007. The Commission
is publishing this notice to solicit comments on the proposed rule
change, as amended, from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.2
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange, through its wholly owned subsidiary NYSE Arca
Equities, proposes to amend certain NYSE Arca Equities Rules governing
registration of employees of Equity Trading Permit (``ETP'') Holders
\3\ in order to clarify registration procedures and make them
consistent with the procedures of other self-regulatory organizations
(``SROs''). The text of the proposed rule change is available at NYSE
Arca, the Commission's Public Reference Room, and www.nysearca.com/
regulation/filings.asp.
---------------------------------------------------------------------------
\3\ See NYSE Arca Equities Rule 1.1(n).
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend NYSE Arca Equities Rules 2.4, 2.21,
and 9.27 (referred to herein as Rules 2.4, 2.21 and 9.27) in order to
clarify registration procedures and ongoing compliance obligations for
ETP Holders and their registered persons. Further, the Exchange
proposes to amend these rules so that they are consistent with industry
practices and with the operation of the Central Registration Depository
(``CRD'') system maintained by the National Association of Securities
Dealers, Inc. (``NASD''). The proposed rule changes are similar to the
rules of other SROs.\4\
---------------------------------------------------------------------------
\4\ See NASD Rules 1070(d) and 1120(a) and (b) and New York
Stock Exchange LLC (``NYSE'') Rule 345A and Supplementary Material
.15(1)(b) to NYSE Rule 345.
---------------------------------------------------------------------------
Consideration of Requests for Waivers of Examination Requirements
The Exchange proposes to amend Rule 2.4(c), which governs requests
from ETP Holder applicants to waive applicable examinations
requirements prescribed by the Exchange. Specifically, the Exchange
proposes to add new waiver standards under which the Corporation has
discretion to grant waivers so that the Exchange's practices are
generally consistent with the criterion set forth in NASD Rule 1070(d)
and Supplementary Material .15(1)(b) to NYSE Rule 345.
Filing of Registration Documentation with the Exchange
The Exchange proposes to amend Rule 2.21, which governs
registration procedures for employees of ETP Holders. Specifically, the
Exchange proposes to amend the rule to provide manual registration
procedures for registration categories (e.g., floor clerk) for which
CRD does not provide electronic registration.\5\
---------------------------------------------------------------------------
\5\ In 2005, NYSE Arca (formerly Pacific Exchange, Inc.) became
a participant of the CRD system for maintenance of certain
registration categories with the Exchange. As part of this
implementation, applicable rules of the Exchange were amended to
address filing appropriate registration documentation electronically
with the CRD system for employees of ETP Holders. These amended
rules, however, inadvertently omitted certain registration
procedures for positions not available on the CRD system.
---------------------------------------------------------------------------
Continuing Education Requirements
Currently, employees of ETP Holders who wish to initiate and
maintain registration with the Corporation must follow two separate
rules--Rules 2.21 and 9.27. Rule 2.21 sets forth initial registration
requirements, whereas Rule 9.27 sets forth the continuing education
requirements that must be satisfied to maintain registration with the
Corporation.
In order to simplify compliance for employees of ETP Holders, the
Exchange proposes to provide continuing registration requirements in
the same rule as initial registration requirements. Specifically, the
Exchange proposes to add continuing education requirements to new Rule
2.21(d) and certain definitions and clarifications with respect thereto
to new Commentary .01-.06 to Rule 2.21.
The continuing education requirements in proposed new Rule 2.21(d)
and related Commentary .01-.06
[[Page 5781]]
to Rule 2.21 are substantially similar to those contained in current
Rule 9.27(c) and (d) and related Commentary .01-.06 to Rule 9.27(c) and
(d), except that the Exchange has made certain clarifications so that
the continuing education requirements and related definitions and
clarifications are more closely aligned with NASD Rule 1120 and NYSE
Rule 345A and other clean-up changes, as set forth in detail below.
Specifically, the Exchange proposes in Rule 2.21(d)(1) that the
content of the Regulatory Element of the program shall be consistent
with the standards set forth by the Corporation and other SROs, rather
than just determined by the Corporation as is set forth in the current
Rule 9.27(c). In addition, the Exchange proposes to add language in
Rule 2.21(d)(2)(B)(i) providing that if an ETP Holder's analysis
establishes the need for supervisory training for persons with
supervisory responsibilities, such training must be included in the ETP
Holder's training plan. Such language is not included in the current
Rule 9.27(d)(2)(A).
The Exchange has not proposed for inclusion NASD's continuing
education requirements applicable to research analysts because the
Corporation does not provide for research analyst registration.
Additionally, unlike current NASD Rule 1120(a)(6), the Corporation is
not proposing to permit ETP Holders to self-administer the Regulatory
Element of continuing education, as the Corporation does not have the
resources or capability to offer an approval process or monitoring of
such self-administered programs. ETP Holders will be responsible for
ensuring continuing education information related to their associated
persons is received by the firm in a timely manner and, as such, shall
designate a person or persons to receive applicable information via
electronic mail directly from the CRD system. ETP Holders will not be
required to submit to the Corporation the names of such designated
persons, as is required by the current NASD rule. This is based on the
fact that the Corporation does not have a contact management system
comparable to that of NASD.
With respect to the proposed new Commentary to Rule 2.21, the
Exchange proposes to add a definition of ``registered person'' to
Commentary .01 to Rule 2.21 as is currently set forth in Commentary .01
to Rule 9.27(c) and (d), except that the definition that the Exchange
is proposing does not include the carve-out for ``any such person whose
activities are limited solely to the transaction of business on the
facilities of the Corporation with ETP Holders or registered broker-
dealers.'' In addition, the Exchange proposes in Commentary .04 to Rule
2.21 to correct a mistake in the language in Commentary .04 to Rule
9.27(c) and (d) to provide that reassociated registered persons shall
participate in the Regulatory Element at intervals based on their
initial base date, rather than their new base date. Lastly, the
Exchange proposes in Commentary .06 to Rule 2.21 to change the
reference of ``any registered member who is an ETP Holder,'' which is
currently in Commentary .06 to Rule 9.27(c) and (d), to ``any
registered person associated with an ETP Holder'' in order to be
consistent with the language of other SROs.
In connection with the addition of proposed new Rule 2.21(d) and
Commentary .01-.06 to Rule 2.21 as set forth above, the Exchange
proposes to delete the specific continuing education requirements in
Rule 9.27(c) and (d) and the related Commentary .01-.06 to Rule 9.27(c)
and (d). The purpose for deleting the continuing education requirements
in Rule 9.27(c) and (d) is to avoid needless repetition and risk of
inconsistencies. The Exchange proposes to include cross-reference
language in Rule 9.27(c) that provides that registered persons shall
follow the continuing education requirements set forth in Rule 2.21(d).
In addition, the Exchange proposes to delete current Rule 2.21(i)
with respect to transition to the CRD system because registration with
CRD is already provided for in Rule 2.21(a).
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Act \6\ in general, and furthers the objectives of
Section 6(b)(5) \7\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
Written comments on the proposed rule change were neither solicited
nor received.
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 Exchange 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 is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2006-50 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-NYSEArca-2006-50. 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
[[Page 5782]]
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 such
filing also will be available for inspection and copying at the
principal office of NYSE Arca. 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-NYSEArca-2006-50 and should be submitted on or before
February 28, 2007.
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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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-2000 Filed 2-6-07; 8:45 am]
BILLING CODE 8010-01-P
