Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Order Granting Approval of Amendment to the Plan for the Allocation of Regulatory Responsibilities Among the American Stock Exchange, LLC, the Boston Stock Exchange, Inc., the Chicago Board Options Exchange, Inc., the International Securities Exchange, LLC, the National Association of Securities Dealers, Inc., the New York Stock Exchange, LLC, the NYSE Arca, Inc., and the Philadelphia Stock Exchange, Inc., 15729-15731 [E7-5981]

Download as PDF Federal Register / Vol. 72, No. 62 / Monday, April 2, 2007 / Notices announces a forthcoming meeting of the Aerospace Safety Advisory Panel. DATES: Tuesday, April 24, 2007, 1 p.m. to 3 p.m. Central Daylight Time. ADDRESSES: Johnson Space Center, 2101 NASA Road 1, Robert H. Gilruth Recreation Center, Lone Star Room (R216), Houston, TX 77058. FOR FURTHER INFORMATION CONTACT: Mr. Mark M. Kowaleski, Aerospace Safety Advisory Panel Executive Director, National Aeronautics and Space Administration, Washington, DC 20546, (202) 358–0751. SUPPLEMENTARY INFORMATION: The Aerospace Safety Advisory Panel will hold its Quarterly Meeting. This discussion is pursuant to carrying out its statutory duties for which the Panel reviews, identifies, evaluates, and advises on those program activities, systems, procedures, and management activities that can contribute to program risk. Priority is given to those programs that involve the safety of human flight. The agenda will include Safety Organization and Management; Technical Governance; Major Contractor Safety; Constellation Program Safety; and Commercial Orbital Transportation Services Safety. The meeting will be open to the public up to the seating capacity of the room (50). Seating will be on a first-come basis. Please contact the ASAP Office at (202) 358–0914 at least 48 hours in advance to reserve a seat. Visitors will be requested to sign a visitor’s register. Photographs will only be permitted during the first 10 minutes of the meeting. During the first 30 minutes of the meeting, members of the public may make a 5-minute verbal presentation to the Panel on the subject of safety in NASA. To do so, please contact Ms. Susan Burch on (202) 358–0914 at least 24 hours in advance. Any member of the public is permitted to file a written statement with the Panel at the time of the meeting. Verbal presentations and written comments should be limited to the subject of safety in NASA. Dated: March 19, 2007. P. Diane Rausch, Advisory Committee Management Officer, National Aeronautics and Space Administration. [FR Doc. E7–5956 Filed 3–30–07; 8:45 am] hsrobinson on PROD1PC76 with NOTICES NUCLEAR REGULATORY COMMISSION Sunshine Act Meeting Notice Nuclear Regulatory Commission. VerDate Aug<31>2005 18:39 Mar 30, 2007 Jkt 211001 Week of April 2, 2007 There are no meetings scheduled for the Week of April 2, 2007. Week of April 9, 2007—Tentative There are no meetings scheduled for the Week of April 9, 2007. Week of April 16, 2007—Tentative Monday, April 16, 2007 1:30 p.m. Discussion of Security Issues (Closed—Ex. 1, 2, & 3). Tuesday, April 17, 2007 9 a.m. Briefing on New Reactor Issues— Environmental Issues (Public Meeting) (Contact: James Lyons, (301) 415–3050). This meeting will be Webcast live at the Web address—https://www.nrc.gov. 12:55 p.m. Affirmation Session (Public Meeting) (Tentative) a. Entergy Nuclear Vermont Yankee, LLC, and Entergy Nuclear Operations, Inc. (Vermont Yankee Nuclear Power Station) Docket No. 50–271–LR, LBP–06–20, 64 NRC 131, 175–82 (2006) (Tentative). 1 p.m. Briefing on Office of Nuclear Regulatory Research (RES) Programs, Performance, and Plans (Public Meeting). (Contact: Ann Ramey-Smith, (301) 415–6877). This meeting will be Webcast live at the Web address—https://www.nrc.gov. Week of April 23, 2007—Tentative There are no meetings scheduled for the Week of April 23, 2007. Week of April 30, 2007—Tentative There are no meetings scheduled for the Week of April 30, 2007. Week of May 7, 2007—Tentative Monday, May 7, 2007 BILLING CODE 7510–13–P AGENCY HOLDING THE MEETINGS: Weeks of April 2, 9, 16, 23, 30, May 7, 2007. PLACE: Commissioners’ Conference Room, 11555 Rockville Pike, Rockville, Maryland. STATUS: Public and Closed. MATTERS TO BE CONSIDERED: DATES: 1:30 p.m. Briefing on Office of Federal and State Materials and Environmental Management Programs (FSME) Programs, Performance, and Plans (Public Meeting). This meeting will be Webcast live at the Web address—https://www.nrc.gov. * * * * * The schedule for Commission meetings is subject to change on short notice. To verify the status of meetings call (recording)—(301) 415–1292. PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 15729 Contact person for more information: Michelle Schroll, (301) 415–1662. * * * * * The NRC Commission Meeting Schedule can be found on the Internet at: https://www.nrc.gov/about-nrc/policymaking/schedule.html. * * * * * The NRC provides reasonable accommodation to individuals with disabilities where appropriate. If you need a reasonable accommodation to participate in these public meetings, or need this meeting notice or the transcript or other information from the public meetings in another format (e.g. braille, large print), please notify the NRC’s Disability Program Coordinator, Deborah Chan, at 301–415–7041, TDD: 301–415–2100, or by e-mail at DLC@nrc.gov. Determinations on requests for reasonable accommodation will be made on a case-by-case basis. * * * * * This notice is distributed by mail to several hundred subscribers; if you no longer wish to receive it, or would like to be added to the distribution, please contact the Office of the Secretary, Washington, DC 20555 (301–415–1969). In addition, distribution of this meeting notice over the Internet system is available. If you are interested in receiving this Commission meeting schedule electronically, please send an electronic message to dkw@nrc.gov. Dated: March 28, 2007. R. Michelle Schroll, Office of the Secretary. [FR Doc. 07–1625 Filed 3–29–07; 11:35 am] BILLING CODE 7590–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55532; File No. S7–966] Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d– 2; Order Granting Approval of Amendment to the Plan for the Allocation of Regulatory Responsibilities Among the American Stock Exchange, LLC, the Boston Stock Exchange, Inc., the Chicago Board Options Exchange, Inc., the International Securities Exchange, LLC, the National Association of Securities Dealers, Inc., the New York Stock Exchange, LLC, the NYSE Arca, Inc., and the Philadelphia Stock Exchange, Inc. March 26, 2007. On December 5, 2006, the American Stock Exchange, LLC (‘‘Amex’’), the Boston Stock Exchange, Inc. (‘‘BSE’’), E:\FR\FM\02APN1.SGM 02APN1 15730 Federal Register / Vol. 72, No. 62 / Monday, April 2, 2007 / Notices the Chicago Board Options Exchange, Inc. (‘‘CBOE’’), the International Securities Exchange, LLC (‘‘ISE’’), the National Association of Securities Dealers, Inc. (‘‘NASD’’), the New York Stock Exchange, LLC (‘‘NYSE’’), the NYSE Arca, Inc. (‘‘NYSE Arca’’), and the Philadelphia Stock Exchange, Inc. (‘‘Phlx’’) (collectively the ‘‘SRO participants’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 17(d) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) and Rule 17d–2 thereunder,2 an amendment to their January 14, 2004 plan for the allocation of regulatory responsibility. The proposed amended plan was published for comment on January 26, 2007.3 The Commission received no comments on the amended plan. This order approves the amended plan. I. Introduction Section 19(g)(1) of the Act,4 among other things, requires every national securities exchange and registered securities association (‘‘SRO’’) 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) or 19(g)(2) of the Act.5 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’’). This regulatory duplication would add unnecessary expenses for common members and their SROs. Section 17(d)(1) of the Act was intended, in part, to eliminate unnecessary multiple examinations and regulatory duplication.6 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 U.S.C. 78q(d). CFR 240.17d–2. 3 Securities Exchange Act Release No. 55145 (January 22, 2007), 72 FR 3882. 4 15 U.S.C. 78s(g)(1). 5 15 U.S.C. 78q(d) or 15 U.S.C. 78s(g)(2). 6 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). 17d–1 and Rule 17d–2 under the Act.7 Rule 17d–1, adopted on April 20, 1976,8 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. 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 applicable financial responsibility rules. Rule 17d–1 deals only with an SRO’s obligations to enforce broker-dealers’ compliance with the 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 other areas, on October 28, 1976, the Commission adopted Rule 17d–2 under the Act.9 This rule permits SROs to propose joint plans allocating regulatory responsibilities with respect to 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 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. The Plan On September 8, 1983, the Commission approved the SRO participants’ plan for allocating regulatory responsibilities pursuant to Rule 17d–2.10 On May 23, 2000, the Commission approved an amendment to the plan that added the ISE as a participant.11 On November 8, 2002, the Commission approved another amendment that replaced the original plan in its entirety and, among other things, allocated regulatory responsibilities among all the participants in a more equitable manner.12 On February 5, 2004, the parties submitted an amendment to the plan, primarily to include the BSE, which was establishing a new options trading facility to be known as the Boston Options Exchange (‘‘BOX’’), as an SRO participant.13 The plan reduces regulatory duplication for a large number of firms currently members of two or more of the SRO participants by allocating regulatory responsibility for certain options-related sales practice matters to one of the SRO participants. Generally, under the current plan, the SRO participant responsible for conducting options-related sales practice examinations of a firm, and investigating options-related customer complaints and terminations for cause of associated persons of that firm, is known as the firm’s ‘‘Designated Options Examining Authority’’ (‘‘DOEA’’). Pursuant to the current plan, any other SRO of which the firm is a member is relieved of these responsibilities during the period the firm is assigned to a DOEA. III. Proposed Amendment to the Plan The purpose of the amended plan is to: (i) Provide that NASD and NYSE will be DOEAs under the plan, (ii) provide that the Designated Examination Authority pursuant to Commission Rule 17d–1 under the Act for a broker-dealer that is a member of more than one SRO participant (but not a member of the NASD or the NYSE) shall perform the regulatory responsibility under the agreement as if such DEA were the DOEA, (iii) to incorporate a more formal procedure for updating the list of common rules, and (iv) make certain other changes to the plan. The amended plan replaces the previous plan in its entirety. IV. Discussion The Commission finds that the amended plan is consistent with the factors set forth in Section 17(d) of the Act 14 and Rule 17d–2(c) thereunder 15 1 15 hsrobinson on PROD1PC76 with NOTICES 2 17 VerDate Aug<31>2005 18:39 Mar 30, 2007 Jkt 211001 7 17 CFR 240.17d–1 and 17 CFR 240.17d–2. Securities Exchange Act Release No. 12352 (April 20, 1976), 41 FR 18809 (May 3, 1976). 9 See Securities Exchange Act Release No. 12935 (October 28, 1976), 41 FR 49093 (November 8, 1976). 10 See Securities Exchange Act Release No. 20158 (September 8, 1983), 48 FR 41256 (September 14, 1983). 8 See PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 11 See Securities Exchange Act Release No. 42816 (May 23, 2000), 65 FR 24759 (May 31, 2000). 12 See Securities Exchange Act Release No. 46800 (November 8, 2002), 67 FR 69774 (November 19, 2002). 13 See Securities Exchange Act Release No. 49197 (February 5, 2004), 69 FR 7046. (February 12, 2004). 14 15 U.S.C. 78q(d). 15 17 CFR 240.17d–2(c). E:\FR\FM\02APN1.SGM 02APN1 Federal Register / Vol. 72, No. 62 / Monday, April 2, 2007 / Notices that the amended plan is necessary or appropriate in the public interest and for the protection of investors, to foster cooperation and coordination among self-regulatory organizations, and to remove impediments to and foster the development of a national market system. In particular, the Commission continues to believe that the plan is an achievement in cooperation among the SRO participants, and that the plan will reduce unnecessary regulatory duplication by allocating to the designated SRO the responsibility for certain options-related sales practice matters that would otherwise be performed by multiple SROs. The plan promotes efficiency by reducing costs to firms that are members of more than one of the SRO participants. In addition, because the SRO participants coordinate their regulatory functions in accordance with the plan, the plan promotes, and will continue to promote, investor protection. V. Conclusion This order gives effect to the amended plan submitted to the Commission that is contained in File No. S7–966. The SRO participants shall notify all members affected by the amended plan of their rights and obligations under the amended plan. It is therefore ordered, pursuant to Sections 17(d) 16 of the Act, that the amended plan of the Amex, BSE, CBOE, ISE, NASD, NYSE, NYSE Arca, and Phlx filed pursuant to Rule 17d–2 17 is approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.18 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–5981 Filed 3–30–07; 8:45 am] hsrobinson on PROD1PC76 with NOTICES BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55539; File Nos. SR–Amex– 2007–21; SR–BSE–2007–07; SR–CBOE– 2007–13; SR–ISE–2007–12; SR–NYSEArca– 2007–28; SR–Phlx–2007–21] Self-Regulatory Organizations; American Stock Exchange LLC and Chicago Board Options Exchange, Incorporated: Notice of Filing and Order Granting Accelerated Approval to Proposed Rule Changes; Boston Stock Exchange, Inc.; International Securities Exchange, LLC; NYSE Arca, Inc.; and Philadelphia Stock Exchange, Inc.: Notice of Filing and Order Granting Accelerated Approval to a Proposed Rule Change, as Amended, Relating to Linkage Orders March 27, 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 February 16, 2007, February 20, 2007, February 13, 2007, February 6, 2007, March 14, 2007, and March 14, 2007, the American Stock Exchange LLC (‘‘Amex’’), the Boston Stock Exchange, Inc. (‘‘BSE’’), the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’), the International Securities Exchange, LLC (‘‘ISE’’), NYSE Arca, Inc. (‘‘NYSE Arca’’), and the Philadelphia Stock Exchange, Inc. (‘‘Phlx’’) (each, an ‘‘Exchange’’ and, collectively, the ‘‘Exchanges’’), respectively, filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule changes as described in Items I and II below. On March 12, 2007, March 13, 2007, March 19, 2007, and March 20, 2007, BSE, ISE, NYSE Arca, and Phlx, respectively, filed Amendment No. 1 to their proposed rule changes.3 On March 21, 2007, Phlx filed Amendment No. 2 to its proposed rule change.4 The Commission is publishing this notice to solicit comments on the proposed rule changes, as amended, from interested persons and is approving the proposed rule changes, as amended, on an accelerated basis. I. Self-Regulatory Organizations’ Statement of the Terms of Substance of the Proposed Rule Changes The Exchanges propose to amend their respective rules pertaining to the Intermarket Options Linkage 1 15 U.S.C. 78s(b)(l). CFR 240. 19b–4. 3 Amendment No. 1 effected technical corrections to the proposed rule texts. 4 Amendment No. 2 effected a technical correction to the proposed rule text. 2 17 16 15 U.S.C. 78q(d). CFR 240.17d–2. 18 17 CFR 200.30–3(a)(34). 17 17 VerDate Aug<31>2005 18:39 Mar 30, 2007 Jkt 211001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 15731 (‘‘Linkage’’) to conform such rules to Joint Amendment No. 22 5 of the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage (‘‘Linkage Plan’’).6 The text of the proposed rule changes are available at the Exchanges’ Web sites,7 the Exchanges’ principal offices, and at the Commission’s Public Reference Room. II. Self-Regulatory Organizations’ Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Changes In its filing with the Commission, each Exchange included statements concerning the purpose of, and basis for, its 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 III below. The Exchanges have prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organizations’ Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Changes 1. Purpose The Exchanges propose to reduce certain ‘‘turn-around’’ times in the Linkage to 5 seconds. Specifically, if a member 8 of an Exchange does not receive a response to its Linkage Order 9 within 5 seconds, that member would be able to reject any response purporting to be an execution received thereafter. The member would also be able to trade 5 See Securities Exchange Act Release No. 55436 (March 8, 2007), 72 FR 12639 (March, 16, 2007) (File No. 4–429). 6 On July 28, 2000, the Commission approved a national market system plan for the purpose of creating and operating the Linkage proposed by Amex, CBOE, and ISE. See Securities Exchange Act Release No. 43086 (July 28, 2000), 65 FR 48023 (August 4, 2000). Subsequently, Phlx, Pacific Exchange, Inc. (n/k/a NYSE Arca, Inc.), and BSE joined the Linkage Plan. See Securities Exchange Act Release Nos. 43573 (November 16, 2000), 65 FR 70851 (November 28, 2000); 43574 (November 16, 2000), 65 FR 70850 (November 28, 2000); and 49198 (February 5, 2004), 69 FR 7029 (February 12, 2004). 7 See https://www.amex.com, https:// www.bostonstock.com, https://www.cboe.com, https://www.iseoptions.com, https://www.nyse.com, and https://www.phlx.com. 8 The term ‘‘member,’’ as used herein, includes NYSE Arca OTP Holders and OTP Firms and Boston Options Exchange (‘‘BOX’’) Options Participants. See NYSE Arca Rules 1.1(q) and 1.1(r) and Chapter I, Sec. 1(a)(40) of BOX Rules, respectively. 9 See Section 2(16) of the Linkage Plan. For the purposes of these proposed rule changes only, references to ‘‘Linkage Orders’’ herein pertain to Principal Acting as Agent (‘‘P/A’’) Orders and Principal Orders. See Section 2(16)(a) and (b) of the Linkage Plan, respectively, for definitions of ‘‘P/A Order’’ and ‘‘Principal Order.’’ E:\FR\FM\02APN1.SGM 02APN1

Agencies

[Federal Register Volume 72, Number 62 (Monday, April 2, 2007)]
[Notices]
[Pages 15729-15731]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-5981]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55532; File No. S7-966]


Program for Allocation of Regulatory Responsibilities Pursuant to 
Rule 17d-2; Order Granting Approval of Amendment to the Plan for the 
Allocation of Regulatory Responsibilities Among the American Stock 
Exchange, LLC, the Boston Stock Exchange, Inc., the Chicago Board 
Options Exchange, Inc., the International Securities Exchange, LLC, the 
National Association of Securities Dealers, Inc., the New York Stock 
Exchange, LLC, the NYSE Arca, Inc., and the Philadelphia Stock 
Exchange, Inc.

March 26, 2007.
    On December 5, 2006, the American Stock Exchange, LLC (``Amex''), 
the Boston Stock Exchange, Inc. (``BSE''),

[[Page 15730]]

the Chicago Board Options Exchange, Inc. (``CBOE''), the International 
Securities Exchange, LLC (``ISE''), the National Association of 
Securities Dealers, Inc. (``NASD''), the New York Stock Exchange, LLC 
(``NYSE''), the NYSE Arca, Inc. (``NYSE Arca''), and the Philadelphia 
Stock Exchange, Inc. (``Phlx'') (collectively the ``SRO participants'') 
filed with the Securities and Exchange Commission (``Commission''), 
pursuant to Section 17(d) \1\ of the Securities Exchange Act of 1934 
(``Act'') and Rule 17d-2 thereunder,\2\ an amendment to their January 
14, 2004 plan for the allocation of regulatory responsibility. The 
proposed amended plan was published for comment on January 26, 2007.\3\ 
The Commission received no comments on the amended plan. This order 
approves the amended plan.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78q(d).
    \2\ 17 CFR 240.17d-2.
    \3\ Securities Exchange Act Release No. 55145 (January 22, 
2007), 72 FR 3882.
---------------------------------------------------------------------------

I. Introduction

    Section 19(g)(1) of the Act,\4\ among other things, requires every 
national securities exchange and registered securities association 
(``SRO'') 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) or 19(g)(2) 
of the Act.\5\ 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''). This 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) or 15 U.S.C. 78s(g)(2).
---------------------------------------------------------------------------

    Section 17(d)(1) of the Act was intended, in part, to eliminate 
unnecessary multiple examinations and regulatory duplication.\6\ 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.
---------------------------------------------------------------------------

    \6\ 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.\7\ Rule 17d-1, adopted on 
April 20, 1976,\8\ 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. 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 applicable financial responsibility rules.
---------------------------------------------------------------------------

    \7\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2.
    \8\ See Securities Exchange Act Release No. 12352 (April 20, 
1976), 41 FR 18809 (May 3, 1976).
---------------------------------------------------------------------------

    Rule 17d-1 deals only with an SRO's obligations to enforce broker-
dealers' compliance with the 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 other areas, on October 
28, 1976, the Commission adopted Rule 17d-2 under the Act.\9\ This rule 
permits SROs to propose joint plans allocating regulatory 
responsibilities with respect to 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 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.
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 12935 (October 28, 
1976), 41 FR 49093 (November 8, 1976).
---------------------------------------------------------------------------

II. The Plan

    On September 8, 1983, the Commission approved the SRO participants' 
plan for allocating regulatory responsibilities pursuant to Rule 17d-
2.\10\ On May 23, 2000, the Commission approved an amendment to the 
plan that added the ISE as a participant.\11\ On November 8, 2002, the 
Commission approved another amendment that replaced the original plan 
in its entirety and, among other things, allocated regulatory 
responsibilities among all the participants in a more equitable 
manner.\12\ On February 5, 2004, the parties submitted an amendment to 
the plan, primarily to include the BSE, which was establishing a new 
options trading facility to be known as the Boston Options Exchange 
(``BOX''), as an SRO participant.\13\
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release No. 20158 (September 8, 
1983), 48 FR 41256 (September 14, 1983).
    \11\ See Securities Exchange Act Release No. 42816 (May 23, 
2000), 65 FR 24759 (May 31, 2000).
    \12\ See Securities Exchange Act Release No. 46800 (November 8, 
2002), 67 FR 69774 (November 19, 2002).
    \13\ See Securities Exchange Act Release No. 49197 (February 5, 
2004), 69 FR 7046. (February 12, 2004).
---------------------------------------------------------------------------

    The plan reduces regulatory duplication for a large number of firms 
currently members of two or more of the SRO participants by allocating 
regulatory responsibility for certain options-related sales practice 
matters to one of the SRO participants. Generally, under the current 
plan, the SRO participant responsible for conducting options-related 
sales practice examinations of a firm, and investigating options-
related customer complaints and terminations for cause of associated 
persons of that firm, is known as the firm's ``Designated Options 
Examining Authority'' (``DOEA''). Pursuant to the current plan, any 
other SRO of which the firm is a member is relieved of these 
responsibilities during the period the firm is assigned to a DOEA.

III. Proposed Amendment to the Plan

    The purpose of the amended plan is to: (i) Provide that NASD and 
NYSE will be DOEAs under the plan, (ii) provide that the Designated 
Examination Authority pursuant to Commission Rule 17d-1 under the Act 
for a broker-dealer that is a member of more than one SRO participant 
(but not a member of the NASD or the NYSE) shall perform the regulatory 
responsibility under the agreement as if such DEA were the DOEA, (iii) 
to incorporate a more formal procedure for updating the list of common 
rules, and (iv) make certain other changes to the plan. The amended 
plan replaces the previous plan in its entirety.

IV. Discussion

    The Commission finds that the amended plan is consistent with the 
factors set forth in Section 17(d) of the Act \14\ and Rule 17d-2(c) 
thereunder \15\

[[Page 15731]]

in that the amended plan is necessary or appropriate in the public 
interest and for the protection of investors, to foster cooperation and 
coordination among self-regulatory organizations, and to remove 
impediments to and foster the development of a national market system. 
In particular, the Commission continues to believe that the plan is an 
achievement in cooperation among the SRO participants, and that the 
plan will reduce unnecessary regulatory duplication by allocating to 
the designated SRO the responsibility for certain options-related sales 
practice matters that would otherwise be performed by multiple SROs. 
The plan promotes efficiency by reducing costs to firms that are 
members of more than one of the SRO participants. In addition, because 
the SRO participants coordinate their regulatory functions in 
accordance with the plan, the plan promotes, and will continue to 
promote, investor protection.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78q(d).
    \15\ 17 CFR 240.17d-2(c).
---------------------------------------------------------------------------

V. Conclusion

    This order gives effect to the amended plan submitted to the 
Commission that is contained in File No. S7-966. The SRO participants 
shall notify all members affected by the amended plan of their rights 
and obligations under the amended plan.
    It is therefore ordered, pursuant to Sections 17(d) \16\ of the 
Act, that the amended plan of the Amex, BSE, CBOE, ISE, NASD, NYSE, 
NYSE Arca, and Phlx filed pursuant to Rule 17d-2 \17\ is approved.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78q(d).
    \17\ 17 CFR 240.17d-2.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\18\
---------------------------------------------------------------------------

    \18\ 17 CFR 200.30-3(a)(34).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-5981 Filed 3-30-07; 8:45 am]
BILLING CODE 8010-01-P
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