Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Amendments to Interpretation to Rule 311(b)(5) (“Co-Designation of Principal Executive Officers”) as Modified by Amendment No. 1, 20905-20907 [E7-7939]

Download as PDF rwilkins on PROD1PC63 with NOTICES Federal Register / Vol. 72, No. 80 / Thursday, April 26, 2007 / Notices IV. Commission’s Findings and Order Granting Accelerated Approval of the Proposed Rule Change The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 13 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act, 14 which requires that an exchange have rules designed, among other things, 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 listing of the Fund Options does not satisfy Commentary .06(b)(i) to Amex Rule 915, which requires the Fund to meet the following condition: ‘‘Any non-U.S. component stocks in the index or portfolio on which the Fund Shares are based that are not subject to comprehensive surveillance agreements do not in the aggregate represent more than 50% of the weight of the index or portfolio.’’ Although the Commission has been willing to allow an exchange to rely on a memorandum of understanding entered into between regulators where the listing SRO finds it impossible to enter into an information sharing agreement, it is not clear that that Amex has exhausted all avenues of discussion with foreign markets, including Bolsa, in order to obtain such an agreement. Consequently, the Commission has determined to approve Amex’s listing and trading of Fund Options for a sixmonth pilot period during which time Amex may rely on the MOU with respect to Fund components trading on Bolsa. During this period, the Exchange has agreed to use its best efforts to obtain a comprehensive surveillance agreement with Bolsa, which shall reflect the following: (1) Express language addressing market trading activity, clearing activity, and customer identity; (2) the Bolsa’s reasonable ability to obtain access to and produce requested information; and (3) based on the CSSA and other information provided by the Bolsa, the absence of existing rules, law or practices that would impede the Exchange from obtaining foreign information relating to market activity, clearing activity, or 13 In approving this rule change, the Commission notes that it has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 14 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 18:59 Apr 25, 2007 Jkt 211001 customer identity, or in the event such rules, laws, or practices exist, they would not materially impede the production of customer or other information. The Exchange also represents that it will regularly update the Commission on the status of its negotiations with Bolsa. In approving the proposed rule change, the Commission notes that Amex currently has in place surveillance agreements with foreign exchanges that cover 48.89% of the securities in the Fund and that the Index upon which the Fund is based appears to be a broad-based index. The Commission further notes that it recently has approved a proposed rule change by another SRO to list and trade options on the same product on a sixmonth pilot basis.15 The Exchange has requested accelerated approval of the proposed rule change. The Commission finds good cause, consistent with Section 19(b)(2) of the Act,16 for approving this proposed rule change before the thirtieth day after the publication of notice thereof in the Federal Register because it will enable the Exchange to immediately consider listing and trading the Fund Options, similar to products already traded on another SRO, and because it does not raise any new regulatory issues. The Exchange has agreed to use its best efforts to obtain a comprehensive surveillance agreement with the Bolsa during a sixmonth pilot period in which the Exchange will rely on the MOU. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,17 that the proposed rule change (SR–Amex–2007– 09), as modified by Amendment No. 1, be, and it hereby is approved on an accelerated basis for a six-month pilot period ending on October 19, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.18 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–7956 Filed 4–25–07; 8:45 am] 15 Securities Exchange Act Release No. 55491 (March 19, 2007), 72 FR 14145 (March 26, 2007). 16 15 U.S.C. 78s(b)(2). 17 Id. 18 17 CFR 200.30–3(a)(12). Frm 00092 Fmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55650; File No. SR–NYSE– 2007–10] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Amendments to Interpretation to Rule 311(b)(5) (‘‘CoDesignation of Principal Executive Officers’’) as Modified by Amendment No. 1 April 19, 2007. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’),2 and Rule 19b–4 thereunder,3 notice is hereby given that on February 2, 2007, the New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) 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. On April 16, 2007, the Exchange submitted Amendment No. 1 to the proposed rule change.4 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The NYSE is proposing amendments to Interpretation .05 to NYSE Rule 311(b)(5) regarding co-designation of principal executive officers. 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 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 Rule 311 (‘‘Formation and Approval of Member Organizations’’) and specifically Section (b)(5) thereof BILLING CODE 8010–01–P PO 00000 20905 Sfmt 4703 1 15 U.S.C. 78s(b)(1). U.S.C. 78(a) et seq. 3 17 CFR 240.19b–4. 4 Amendment No. 1 replaced the original filing in its entirety. 2 15 E:\FR\FM\26APN1.SGM 26APN1 20906 Federal Register / Vol. 72, No. 80 / Thursday, April 26, 2007 / Notices provide that ‘‘principal executive officers’’ shall exercise principal executive responsibility over the various areas of the business of the member corporation. Interpretation .05 to Rule 311(b)(5) (the ‘‘Interpretation’’) sets forth the regulatory framework under which member organizations may request approval for assigning two persons as the ‘‘principal executive officers’’ 5 for the same function pursuant to Rule 311(b)(5). It presently provides that no understanding or agreement purporting to limit or apportion the joint and several responsibility of each such co-officer will be recognized by the Exchange. The proposed amended Interpretation would qualify that prohibition to permit certain principal executive officers to allocate specific responsibility, subject to Exchange approval. Background On September 7, 2005, the Commission approved changes to Rule 311.6 In promulgating the changes to the Interpretation, the Exchange explained: 7 rwilkins on PROD1PC63 with NOTICES Co-Designation of Principal Executive Officers The Exchange believes that codesignating principal executive officer titles (i.e., assigning or sharing of the same title to two persons) is a potentially troublesome practice in that it can lead to confusion as to which designee is ultimately responsible and accountable for assigned functions. However, there may be instances where such arrangements are supported by valid business reasons, such as when each co-designee has special expertise in critical areas within the purview of the principal executive officer job description or co-principal executive officers have functional responsibility for separate business lines. In light of such circumstances, the Exchange has permitted the co-designation of certain principal executive officer titles at member organizations on a limited basis. Accordingly, the amendments continue to permit such codesignations, but only pursuant to a 5 Rule 311(b)(5) provides that the board of directors of each member organization shall designate ‘‘principal executive officers’’ who shall have responsibility over the various areas of the business of the member organization. In operation, the Exchange recognizes four such principal executive officers: Chief executive officer (‘‘CEO’’), chief operations officer (‘‘COO’’), chief finance officer (‘‘CFO’’) and chief compliance officer (‘‘CCO’’). 6 See Securities Exchange Act Release No. 52391 (September 7, 2005), 70 FR 54429 (September 14, 2005) (SR–NYSE–2005–04). 7 See NYSE Information Memo 05–69 (September 16, 2005). VerDate Aug<31>2005 18:59 Apr 25, 2007 Jkt 211001 written request and subject to the prior written approval of the Exchange (see new Section /05). Written requests to the Exchange must set forth the reason for the codesignation and explain how the arrangement is structured. Further, since such co-designations raise issues regarding which person has ultimate authority and accountability, the request must make clear that each co-designee has joint and several responsibility for discharging the duties of the principal executive officer designation and that no understanding or agreement purporting to apportion or limit such responsibility will be recognized by the Exchange. In situations where authority is, by its nature, indivisible, such as in the cases of CEOs and CFOs, the basis for this position is unarguable. The Exchange now believes, however, that there are legitimate situations where other principal executive officers exercise supervisory authority over discrete and naturally separate business functions, consistent with the internal corporate structure of the particular member organization. As an example, the Exchange has seen a reasonable division of supervisory jurisdictions and responsibility between CCOs whereby one is responsible for the member organization’s retail brokerage activities and another deals with the firm’s investment banking functions. While there are inevitable areas of overlap between the two, as where new offerings are readied for distribution by the retail sales force, and any proposed request for recognition of the differing areas would need to address such overlap, the greater part of the two functions are mutually exclusive, and lend themselves logically to separation.8 It can be seen that a joint and several responsibility could expose one of the co-CCOs to regulatory sanctions for actions in an area which he or she did not and could not reasonably supervise. This needs to be balanced against the need to avoid the situation where each such officer attempts to disclaim responsibility for the supervision of the area in question. 8 All present co-designations have involved two persons, and that may be the optimal number for such sharing of responsibility. However, to assure maximum member organization operational flexibility, the proposed interpretation does not limit the number to two, but would allow three codesignees where a compelling case for such allocation is made. The Commission notes that while the Exchange states above that it would allow three co-designees, the proposed change to the Interpretation .05 of rule 311(b)(5) does not specify a limit on the number of co-designees permitted. PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 Proposed Amendments Accordingly, the Exchange proposes to amend the Interpretation to permit co-CCOs and co-COO 9 to allocate supervisory responsibility in a fashion acceptable to the Exchange. Where a member organization seeks to divide regulatory responsibility between more than one principal executive officer bearing the same or similar titles without the assumption of joint and several responsibility, it must provide the Exchange with a plan acceptable to the Exchange allocating specific responsibility and making unambiguous provisions, especially for the supervision of areas where the separate functions interact. It should be clearly understood that joint and several responsibility remains in effect for any area not specifically included in the plan approved by the Exchange. In addition, because the CCO of a member organization has unique responsibilities under Rule 342.30 (‘‘Annual Reports’’), the revised Interpretation would also require a representation that the certification required by Rule 342.30(e) will further confirm the qualification of each such co-CCO and that the responsibility of the co-CCOs encompasses every aspect of the business of the member organization. Of necessity, each of the co-CCOs would meet with and advise the CEO as part of the Rule 342.30 certification process. As proposed, the Interpretation would read: The prior written approval of the Exchange is required to assign [two] more than one person[s] to a single ‘‘principal executive officer’’ designation pursuant to Rule 311(b)(5). Member organizations seeking approval for such co-designations must submit a written request to the Exchange that sets forth the reason for the co-designation, explains how the arrangement is structured, and makes clear that each co-designee has joint and several responsibility for discharging the duties of that principal executive officer designation[;]. However, the Exchange may approve a specific plan identifying the business need and other justification for an arrangement which does not provide for joint and several responsibility for principal executive officers other than the chief executive officer and chief financial officer. Such a plan must identify the areas and functions subject to separate supervisory responsibility and make specific provisions for the supervisory 9 Although to date only co-CCOs have chosen to seek separate status, it would not be unreasonable to extend the same treatment to co-COOs where their duties are subject to rational separation. E:\FR\FM\26APN1.SGM 26APN1 Federal Register / Vol. 72, No. 80 / Thursday, April 26, 2007 / Notices responsibility of functions, activities and areas which can reasonably be expected to overlap. [no understanding or agreement purporting to apportion or limit such responsibility will be recognized by the Exchange.] In addition, in the case of co-CCOs, the written approval request submitted in accordance with this Interpretation shall include a representation to the Exchange, to the effect that the CEO’s Annual Report and Certification required by Rule 342.30(e) will further state, in addition to the fact that each such CCO has met the qualification requirements set forth at 342.30(d)/01, that the collective authority, accountability, and responsibility of such co-equal CCOs encompasses, without exception, every aspect of the business of such member organization. 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 The proposed amendments would be effective upon SEC approval. 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: 2. Statutory Basis Electronic Comments The proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange, and in particular, with the requirements of Sections 6(b)(5)10 of the Act. Section 6(b)(5) requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and national market system, and in general, to protect investors and the public interest. The proposed amendments will provide member organizations with organizational flexibility in the allocation of certain regulatory responsibilities. 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 rwilkins on PROD1PC63 with NOTICES comments received will be posted without change; the Commission does not edit personal identifying information be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File number SR–NYSE– 2007–10 and should be submitted by May 17, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–7939 Filed 4–25–07; 8:45 am] • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NYSE–2007–10 on the subject line. Implementation Date The Exchange has neither solicited nor received written comments on the proposed rule change. 10 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 18:59 Apr 25, 2007 Jkt 211001 20907 BILLING CODE 8010–01–P SMALL BUSINESS ADMINISTRATION National Small Business Development Center Advisory Board; Public Meeting The U.S. Small Business Administration National Small Business Development Center Advisory Board will be hosting a public meeting via conference call to discuss such matters that may be presented by members, and the staff of the U.S. Small Business Administration or interested others. The Paper Comments conference call will take place on • Send paper comments in triplicate Tuesday, May 15, 2007 at 1 p.m. Eastern to Nancy M. Morris, Secretary, Standard Time. Securities and Exchange Commission, The purpose of the meeting is to 100 F Street, NE., Washington, DC discuss the initial White Paper draft 20549–1090. regarding management of the SBDC All submissions should refer to File program, and arrangements for the Number SR–NYSE–2007–10. This file Board site visit in June to visit the Ohio number should be included on the subject line if e-mail is used. To help the SBDC network in Columbus. Commission process and review your Anyone wishing to make an oral comments more efficiently, please use presentation to the Board must contact only one method. The Commission will Erika Fischer, Senior Program Analyst, post all comments on the Commission’s U.S. Small Business Administration, Internet Web site https://www.sec.gov/ Office of Small Business Development rules/sro/shtml. Copies of the Centers, 409 3rd Street, SW., submission, all subsequent Washington, DC 20416, telephone (202) amendments, all written statements 205–7045 or fax (202) 481–0681. with respect to the proposed rule change that are filed with the Matthew Teague, Commission, and all written Committee Management Officer. communications relating to the [FR Doc. E7–8021 Filed 4–25–07; 8:45 am] proposed rule change between the Commission and any person, other than BILLING CODE 8025–01–P 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 will also be available for inspection and copying at 11 17 CFR 200.30–3(a)(12). the principal office of the NYSE. All PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 E:\FR\FM\26APN1.SGM 26APN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 72, Number 80 (Thursday, April 26, 2007)]
[Notices]
[Pages 20905-20907]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-7939]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55650; File No. SR-NYSE-2007-10]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Amendments to Interpretation to Rule 
311(b)(5) (``Co-Designation of Principal Executive Officers'') as 
Modified by Amendment No. 1

April 19, 2007.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on February 2, 2007, the New York Stock Exchange LLC 
(``NYSE'' or the ``Exchange'') 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. On April 16, 2007, the Exchange submitted 
Amendment No. 1 to the proposed rule change.\4\ The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78(a) et seq.
    \3\ 17 CFR 240.19b-4.
    \4\ Amendment No. 1 replaced the original filing in its 
entirety.
---------------------------------------------------------------------------

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

    The NYSE is proposing amendments to Interpretation .05 to NYSE Rule 
311(b)(5) regarding co-designation of principal executive officers.

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 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
    Rule 311 (``Formation and Approval of Member Organizations'') and 
specifically Section (b)(5) thereof

[[Page 20906]]

provide that ``principal executive officers'' shall exercise principal 
executive responsibility over the various areas of the business of the 
member corporation. Interpretation .05 to Rule 311(b)(5) (the 
``Interpretation'') sets forth the regulatory framework under which 
member organizations may request approval for assigning two persons as 
the ``principal executive officers'' \5\ for the same function pursuant 
to Rule 311(b)(5). It presently provides that no understanding or 
agreement purporting to limit or apportion the joint and several 
responsibility of each such co-officer will be recognized by the 
Exchange. The proposed amended Interpretation would qualify that 
prohibition to permit certain principal executive officers to allocate 
specific responsibility, subject to Exchange approval.
---------------------------------------------------------------------------

    \5\ Rule 311(b)(5) provides that the board of directors of each 
member organization shall designate ``principal executive officers'' 
who shall have responsibility over the various areas of the business 
of the member organization. In operation, the Exchange recognizes 
four such principal executive officers: Chief executive officer 
(``CEO''), chief operations officer (``COO''), chief finance officer 
(``CFO'') and chief compliance officer (``CCO'').
---------------------------------------------------------------------------

Background

    On September 7, 2005, the Commission approved changes to Rule 
311.\6\ In promulgating the changes to the Interpretation, the Exchange 
explained: \7\
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 52391 (September 7, 
2005), 70 FR 54429 (September 14, 2005) (SR-NYSE-2005-04).
    \7\ See NYSE Information Memo 05-69 (September 16, 2005).
---------------------------------------------------------------------------

Co-Designation of Principal Executive Officers

    The Exchange believes that co-designating principal executive 
officer titles (i.e., assigning or sharing of the same title to two 
persons) is a potentially troublesome practice in that it can lead to 
confusion as to which designee is ultimately responsible and 
accountable for assigned functions. However, there may be instances 
where such arrangements are supported by valid business reasons, such 
as when each co-designee has special expertise in critical areas within 
the purview of the principal executive officer job description or co-
principal executive officers have functional responsibility for 
separate business lines. In light of such circumstances, the Exchange 
has permitted the co-designation of certain principal executive officer 
titles at member organizations on a limited basis. Accordingly, the 
amendments continue to permit such co-designations, but only pursuant 
to a written request and subject to the prior written approval of the 
Exchange (see new Section /05).
    Written requests to the Exchange must set forth the reason for the 
co-designation and explain how the arrangement is structured. Further, 
since such co-designations raise issues regarding which person has 
ultimate authority and accountability, the request must make clear that 
each co-designee has joint and several responsibility for discharging 
the duties of the principal executive officer designation and that no 
understanding or agreement purporting to apportion or limit such 
responsibility will be recognized by the Exchange.
    In situations where authority is, by its nature, indivisible, such 
as in the cases of CEOs and CFOs, the basis for this position is 
unarguable. The Exchange now believes, however, that there are 
legitimate situations where other principal executive officers exercise 
supervisory authority over discrete and naturally separate business 
functions, consistent with the internal corporate structure of the 
particular member organization. As an example, the Exchange has seen a 
reasonable division of supervisory jurisdictions and responsibility 
between CCOs whereby one is responsible for the member organization's 
retail brokerage activities and another deals with the firm's 
investment banking functions. While there are inevitable areas of 
overlap between the two, as where new offerings are readied for 
distribution by the retail sales force, and any proposed request for 
recognition of the differing areas would need to address such overlap, 
the greater part of the two functions are mutually exclusive, and lend 
themselves logically to separation.\8\
---------------------------------------------------------------------------

    \8\ All present co-designations have involved two persons, and 
that may be the optimal number for such sharing of responsibility. 
However, to assure maximum member organization operational 
flexibility, the proposed interpretation does not limit the number 
to two, but would allow three co-designees where a compelling case 
for such allocation is made. The Commission notes that while the 
Exchange states above that it would allow three co-designees, the 
proposed change to the Interpretation .05 of rule 311(b)(5) does not 
specify a limit on the number of co-designees permitted.
---------------------------------------------------------------------------

    It can be seen that a joint and several responsibility could expose 
one of the co-CCOs to regulatory sanctions for actions in an area which 
he or she did not and could not reasonably supervise. This needs to be 
balanced against the need to avoid the situation where each such 
officer attempts to disclaim responsibility for the supervision of the 
area in question.

Proposed Amendments

    Accordingly, the Exchange proposes to amend the Interpretation to 
permit co-CCOs and co-COO \9\ to allocate supervisory responsibility in 
a fashion acceptable to the Exchange. Where a member organization seeks 
to divide regulatory responsibility between more than one principal 
executive officer bearing the same or similar titles without the 
assumption of joint and several responsibility, it must provide the 
Exchange with a plan acceptable to the Exchange allocating specific 
responsibility and making unambiguous provisions, especially for the 
supervision of areas where the separate functions interact. It should 
be clearly understood that joint and several responsibility remains in 
effect for any area not specifically included in the plan approved by 
the Exchange. In addition, because the CCO of a member organization has 
unique responsibilities under Rule 342.30 (``Annual Reports''), the 
revised Interpretation would also require a representation that the 
certification required by Rule 342.30(e) will further confirm the 
qualification of each such co-CCO and that the responsibility of the 
co-CCOs encompasses every aspect of the business of the member 
organization. Of necessity, each of the co-CCOs would meet with and 
advise the CEO as part of the Rule 342.30 certification process.
---------------------------------------------------------------------------

    \9\ Although to date only co-CCOs have chosen to seek separate 
status, it would not be unreasonable to extend the same treatment to 
co-COOs where their duties are subject to rational separation.
---------------------------------------------------------------------------

    As proposed, the Interpretation would read:
    The prior written approval of the Exchange is required to assign 
[two] more than one person[s] to a single ``principal executive 
officer'' designation pursuant to Rule 311(b)(5). Member organizations 
seeking approval for such co-designations must submit a written request 
to the Exchange that sets forth the reason for the co-designation, 
explains how the arrangement is structured, and makes clear that each 
co-designee has joint and several responsibility for discharging the 
duties of that principal executive officer designation[;]. However, the 
Exchange may approve a specific plan identifying the business need and 
other justification for an arrangement which does not provide for joint 
and several responsibility for principal executive officers other than 
the chief executive officer and chief financial officer. Such a plan 
must identify the areas and functions subject to separate supervisory 
responsibility and make specific provisions for the supervisory

[[Page 20907]]

responsibility of functions, activities and areas which can reasonably 
be expected to overlap. [no understanding or agreement purporting to 
apportion or limit such responsibility will be recognized by the 
Exchange.] In addition, in the case of co-CCOs, the written approval 
request submitted in accordance with this Interpretation shall include 
a representation to the Exchange, to the effect that the CEO's Annual 
Report and Certification required by Rule 342.30(e) will further state, 
in addition to the fact that each such CCO has met the qualification 
requirements set forth at 342.30(d)/01, that the collective authority, 
accountability, and responsibility of such co-equal CCOs encompasses, 
without exception, every aspect of the business of such member 
organization.

Implementation Date

    The proposed amendments would be effective upon SEC approval.
2. Statutory Basis
    The proposed rule change is consistent with the requirements of the 
Act and the rules and regulations thereunder applicable to a national 
securities exchange, and in particular, with the requirements of 
Sections 6(b)(5)\10\ of the Act. Section 6(b)(5) requires, among other 
things, that the rules of an exchange be designed to promote just and 
equitable principles of trade, to remove impediments to and perfect the 
mechanism of a free and open market and national market system, and in 
general, to protect investors and the public interest. The proposed 
amendments will provide member organizations with organizational 
flexibility in the allocation of certain regulatory responsibilities.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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.

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-NYSE-2007-10 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2007-10. 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 Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
NYSE. All comments received will be posted without change; the 
Commission does not edit personal identifying information be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File number SR-NYSE-2007-10 and should be submitted by May 17, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-7939 Filed 4-25-07; 8:45 am]
BILLING CODE 8010-01-P

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