Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto Relating to Amendments to Arca Equities Rule 12 To Provide Guidance Regarding New and Pending Arbitration Claims in Light of the Consolidation of NYSE Regulation Into NASD DR, 40188-40191 [E7-14166]

Download as PDF 40188 Federal Register / Vol. 72, No. 140 / Monday, July 23, 2007 / Notices Percent Businesses And Non-Profit Organizations Without Credit Available Elsewhere .............. 4.000 The number assigned to this disaster for physical damage is 10942 6 and for economic injury is 10943 0. The States which received an EIDL Declaration # are: Pennsylvania, Ohio, West Virginia. (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) Dated: July 12, 2007. Steven C. Preston, Administrator. [FR Doc. E7–14124 Filed 7–20–07; 8:45 am] BILLING CODE 8025–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #10923 and #10924] Kansas Disaster Number KS–00022 U.S. Small Business Administration. ACTION: Amendment 1. sroberts on PROD1PC70 with NOTICES AGENCY: SUMMARY: This is an amendment of the Presidential declaration of a major disaster for the State of Kansas (FEMA– 1711–DR), dated 07/05/2007. Incident: Severe storms and flooding. Incident Period: 06/26/2007 and continuing. Effective Date: 07/13/2007. Physical Loan Application Deadline Date: 09/04/2007. EIDL Loan Application Deadline Date: 04/07/2008. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: The notice of the Presidential disaster declaration for the State of Kansas, dated 07/05/ 2007 is hereby amended to include the following areas as adversely affected by the disaster: Primary Counties: Allen, Cowley, Labette, Linn. Contiguous Counties: Kansas: Cherokee, Coffey, Sedgwick, Sumner. Missouri: Vernon. Oklahoma: Craig, Kay, Osage. All other information in the original declaration remains unchanged. VerDate Aug<31>2005 17:09 Jul 20, 2007 Jkt 211001 (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) BILLING CODE 8025–01–P prepared by NYSE Arca. On July 13, 2007, the NYSEArca filed Amendment No. 1 to the proposed rule change.4 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. SMALL BUSINESS ADMINISTRATION I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Herbert L. Mitchell, Associate Administrator for Disaster Assistance. [FR Doc. E7–14121 Filed 7–20–07; 8:45 am] Advisory Committee on Veterans Business Affairs; Public Meeting Pursuant to the Federal Advisory Committee Act, Appendix 2 of Title 5, United States Code, Public Law 92–463, notice is hereby given that the U.S. Small Business Administration (SBA) will hold a public federal meeting on Tuesday, July 24, 2007, starting at 9 a.m. until 5 p.m. The meeting will take place at the U.S. Small Business Administration, 409 3rd Street, SW., Eisenhower Conference Room, Side B, Washington, DC 20416. The purpose of the meeting is to discuss SBA’s services, programs and outreach for veterans and service-disabled veterans. Anyone wishing to attend must contact Cheryl Clark, Program Liaison, Office of Veterans Business Development at (202) 205–6773 or e-mail cheryl.clark@sba.gov. Matthew Teague, Committee Management Officer. [FR Doc. E7–14122 Filed 7–20–07; 8:45 am] BILLING CODE 8025–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56070; File No. SR– NYSEArca–2007–60] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto Relating to Amendments to Arca Equities Rule 12 To Provide Guidance Regarding New and Pending Arbitration Claims in Light of the Consolidation of NYSE Regulation Into NASD DR July 13, 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 June 26, 2007, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission the proposed rule change as described in Items I, II, and III below, which Items have been PO 00000 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. Fmt 4703 Rule 12 Arbitration (a) General. All arbitrations filed with the Corporation after January 31, 2007 and prior to [insert later of effective date of the consolidation or approval of this proposed rule change] shall be governed by the Code of Arbitration contained in the 600 series of the New York Stock Exchange, L.L.C. Rules (‘‘NYSE Arbitration Rules’’), as the same may be 4 In Amendment No. 1, which supplemented the original filing, the Exchange clarified the applicability of NYSE Arca Equities Rule 12 as it was in effect on or prior to January 31, 2007. 1 15 Frm 00079 NYSE Arca, through its subsidiary NYSE Arca Equities, Inc. (‘‘NYSE Arca Equities’’ or ‘‘Corporation’’), proposes to amend NYSE Arca Equities Rule 12. NYSE Regulation, Inc. (‘‘NYSE Regulation’’) administers an arbitration program for NYSE Arca Equities. As part of the consolidation of the member firm regulation function of NYSE Regulation with the National Association of Securities Dealers, Inc. (‘‘NASD’’), NYSE Regulation will cease to provide an arbitration program, and its existing arbitration department (‘‘NYSE Arbitration’’) will be consolidated with that of NASD Dispute Resolution, Inc. (‘‘NASD DR’’). The proposed amendments provide that: (i) All arbitrations filed with NYSE Arca Equities after January 31, 2007 and prior to the later of the effective date of the consolidation or approval of this proposed rule change (the ‘‘Effective Date’’), shall continue to be governed by the Code of Arbitration contained in the 600 series of the New York Stock Exchange LLC Rules (‘‘NYSE Arbitration Rules’’); (ii) arbitrations filed on or prior to January 31, 2007 shall continue to be governed by NYSE Arca Equities Rule 12 as it was in effect on or prior to January 31, 2007; and (iii) from and after the Effective Date, disputes between NYSE Arca Equity Trading Permit (‘‘ETP’’) holders, associated persons, and/or their customers will be arbitrated under the NASD DR Codes of Arbitration Procedure. The text of the proposed rule change is set forth below. Proposed new language is in italic; proposed deletions are in brackets. * * * * * Sfmt 4703 E:\FR\FM\23JYN1.SGM 23JYN1 sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 72, No. 140 / Monday, July 23, 2007 / Notices in effect from time to time, except that arbitrations filed on or prior to January 31, 2007 shall be governed by NYSE Arca Equities Rule 12 as it was in effect on or prior to January 31, 2007 [as may be specified in this Rule 12]. The term ‘‘member’’ as used in this Rule 12 and in the NYSE Arbitration Rules shall mean and refer to ETP Holders. From and after [insert later of effective date of the consolidation or approval of this proposed rule change] (i) any dispute, claim or controversy between or among ETP Holders and/or associated persons shall be arbitrated pursuant to the NASD Dispute Resolution, Inc. (‘‘NASD DR’’) Codes of Arbitration Procedure; and, (ii) any dispute, claim or controversy between a customer or nonmember and an ETP Holder and/or associated person arising in connection with the business of such ETP Holder and/or in connection with the activities of an associated person, shall be arbitrated pursuant to NASD DR Codes of Arbitration Procedure as provided by any duly executed and enforceable written agreement, or upon demand of the customer or non-member. Such obligation to arbitrate shall extend only to those matters that are permitted to be arbitrated under NASD DR Codes of Arbitration Procedure. (b) Referrals. The Corporation may receive, investigate and take disciplinary action with respect to any referral it receives from a NASD DR arbitrator of any matter which comes to the attention of such arbitrator during and in connection with the arbitrator’s participation in a proceeding, either from the record of the proceeding or from material or communications related to the proceeding, that the arbitrator has reason to believe may constitute a violation of the Corporation’s Rules or the federal securities laws. (c) Failure to Arbitrate or to Pay an Arbitration Award. Any ETP Holder and/or associated person who fails to submit to arbitration a matter required to be arbitrated pursuant to this Rule, or that fails to honor an arbitration award made pursuant to the NASD DR Codes of Arbitration Procedure, or made under the auspices of any other self-regulatory organization, shall be subject to disciplinary proceedings in accordance with NYSE Arca Equities Rule 10. (d) Other Actions. The submission of any matter to arbitration as provided for under this Rule shall in no way limit or preclude any right, action or determination by the Corporation that it would otherwise be authorized to adopt, administer or enforce. [(b) Jurisdiction. Any dispute, claim or controversy arising out of or in VerDate Aug<31>2005 17:09 Jul 20, 2007 Jkt 211001 connection with the business of any member of the Corporation, or arising out of the employment or termination of employment of associated person(s) with any member may be arbitrated under this Rule 12 except that: (1) A dispute, claim, or controversy alleging employment discrimination (including a sexual harassment claim) in violation of a statute may only be arbitrated if the parties have agreed to arbitrate it after the dispute arose; and (2) any type of dispute, claim, or controversy that is not permitted to be arbitrated under the NYSE Arbitration Rules, such as class action claims, shall not be eligible for arbitration under this Rule 12. (c) Predispute Arbitration Agreements. The requirements of NYSE Arbitration Rules shall apply to predispute arbitration agreements between the Corporation’s members and/or associated persons and their customers. (d) Referrals. If any matter comes to the attention of an arbitrator during and in connection with the arbitrator’s participation in a proceeding, either from the record of the proceeding or from material or communications related to the proceeding, that the arbitrator has reason to believe may constitute a violation of the Corporation’s Rules or the federal securities laws, the arbitrator may refer the matter to NYSE Regulation, Inc. for disciplinary investigation. (e) Payment of Awards. Any member or associated person who fails to honor an award of arbitrators appointed in accordance with this Rule 12 shall be subject to disciplinary proceedings in accordance with Rule 10 (Disciplinary Proceedings, Other Hearings, and Appeals). (f) Other Actions. The submission of any matter to arbitration under this Chapter shall in no way limit or preclude any right, action or determination by the Corporation that it would otherwise be authorized to adopt, administer or enforce.] * * * * * II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NYSE Arca 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. NYSE Arca has prepared summaries, set forth in sections A, B, and C below, of the PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 40189 most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to provide guidance regarding both new and pending arbitration claims in light of the consolidation of the member firm regulation function of NYSE Regulation into NASD DR.5 NYSE Arbitration currently administers an arbitration program for NYSE Arca Equities, governed by what is referred to as ‘‘Rule 12.’’ 6 As part of the consolidation of NYSE Regulation with NASD,7 NYSE Regulation will cease to administer an arbitration program, and its existing arbitration department will be consolidated with NASD DR. As a result, on and after the date of the consolidation, all arbitration claims filed prior to the Effective Date, and previously subject to Rule 12 or NYSE Regulation rules, will be administered by NASD DR pursuant to a Regulatory Services Agreement with the New York Stock Exchange LLC (‘‘NYSE’’). The rules governing the administration of any particular arbitration will depend on the date the case was filed. This will ensure that any person that filed an arbitration under a particular set of arbitration rules will continue to have the case administered pursuant to those rules through to the case’s conclusion. There are two categories of cases. First, NYSE Arca Equities cases filed on or prior to January 31, 2007 are and would continue to be governed by Rule 12 as it was in effect on that date. Second, NYSE Arca Equities cases filed after January 31, 2007, but prior to the 5 The NYSE has proposed a separate filing related to the consolidation of NYSE Arbitration into NASD DR. See Securities Exchange Act Release No. 55818 (May 25, 2007), 72 FR 30898 (June 4, 2007) (SR– NYSE 2007–48). On June 21, 2007, the NYSE filed Amendment No. 1 to this proposed rule change. See Securities Exchange Act Release No. 56015 (July 5, 2007), 72 FR 37811 (July 11, 2007). 6 Although Rule 12 has subsequently been amended, for purposes of administering NYSE Arca Equities arbitrations filed on or prior to January 31, 2007, NYSE Arbitration follows Rule 12 as it was in effect on that date. 7 Additional information regarding the consolidation may be found in: SR–NASD–2007–23 (March 19, 2007) concerning proposed amendments to the By-Laws of NASD to implement governance and related changes to accommodate the consolidation of the member firm regulatory functions of NASD and NYSE Regulation, Inc.; and SR–NYSE–2007–22 (February 27, 2007) concerning proposed amendments to several NYSE rules which, among other matters, harmonize the rules with corresponding NASD regulatory requirements. E:\FR\FM\23JYN1.SGM 23JYN1 40190 Federal Register / Vol. 72, No. 140 / Monday, July 23, 2007 / Notices sroberts on PROD1PC70 with NOTICES Effective Date will continue to be governed by existing NYSE Regulation arbitration rules.8 NYSE Arca Equities Rule 12, as amended, would provide detailed guidance concerning claims involving ETP Holders and/or associated persons that are asserted on and after the Effective Date.9 First, any dispute, claim or controversy between or among ETP Holders and/or associated persons shall be arbitrated pursuant to the NASD DR Codes of Arbitration Procedure. Second, any dispute, claim or controversy between a customer or a non-member and an ETP Holder and/or associated person arising in connection with the business of such ETP Holder and/or in connection with the activities of an associated person, shall be arbitrated pursuant to NASD DR Codes of Arbitration Procedure as provided by any duly executed and enforceable written agreement, or upon the demand of the customer or non-member. This obligation to arbitrate shall extend only to those matters that are permitted to be arbitrated under NASD DR Codes of Arbitration Procedure. In almost all cases the change from NYSE rules or NYSE Arca Equities rules to NASD DR arbitration rules should not result in material, substantive differences to persons participating in the arbitration process. However, one difference is the treatment of employment discrimination claims. NASD DR rules provide that any claim alleging employment discrimination, including any sexual harassment claims, in violation of a statute, will be eligible for arbitration pursuant to either a predispute or a post-dispute agreement to arbitrate. In contrast, NYSE Rule 600(f), NYSE Rule 347(b) and current NYSE Arca Equities Rule 12(b) permit claims to be arbitrated only when the parties have agreed to arbitrate the claim after it has arisen. Proposed Rule 12(b) would explicitly retain NYSE Arca Equities’ enforcement authority related to arbitration. In appropriate cases, arbitrators would refer to NYSE Arca Equities potential violations of NYSE Arca Equities’ rules or the federal securities laws that come to their attention during and in connection with a proceeding. Rule 12(b) would specify that NYSE Arca Equities would retain the ability to take 8 See Securities Exchange Act Release No. 55142 (January 19, 2007), 72 FR 3898 (January 26, 2007) (SR–NYSEArca–2006–54) and Securities Exchange Act Release No. 55141 (January 19, 2007), 72 FR 3897 (January 26, 2007) (SR–NYSEArca–2006–55). 9 It is proposed that the provisions in the current Rule 12(b)–(f) be deleted because these sections would be replaced by the proposed Rule 12 provisions described herein. VerDate Aug<31>2005 17:09 Jul 20, 2007 Jkt 211001 action based on such referrals that may come from arbitrators in cases being arbitrated at NASD DR. Proposed Rule 12(c) also would provide that any ETP Holder and/or associated person of any ETP Holder, that fails to honor an award of arbitrators rendered under the NASD DR Codes of Arbitration Procedure, or under the auspices of any other selfregulatory organization, shall be subject to disciplinary proceedings in accordance with NYSE Arca Equities Rule 10. Proposed Rule 12(c) also would specify that failure to submit a matter to arbitration as required by Rule 12 also would subject the ETP Holder and/or associated person to Exchange disciplinary action. Proposed Rule 12(d) would also specify that the submission of any matter to arbitration as provided for under the Rule shall in no way limit or preclude any right, action or determination by NYSE Arca Equities that it would otherwise be authorized to adopt, administer or enforce. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of Section 6(b)(5) 10 of the Act, which requires, among other things, that the rules of an Exchange be designed to promote just and equitable principles of trade and to protect investors and the public interest. The proposed rule change will streamline the arbitration process and, after a transitional period, provide for a unified and more efficient arbitration forum with one set of arbitration rules and administrative procedures. This will allow resources to be devoted to maintaining and improving the NASD DR program, rather than splitting resources among duplicative programs. As a result of these improvements, the proposed rule change will better 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. PO 00000 10 15 U.S.C. 78f(b)(5). Frm 00081 Fmt 4703 Sfmt 4703 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) As the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve the proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Exchange Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send e-mail to rulecomments@sec.gov. Please include File Number SR–NYSEArca–2007–60 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–2007–60. 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 (http://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, 100 F Street, NE., Washington, E:\FR\FM\23JYN1.SGM 23JYN1 Federal Register / Vol. 72, No. 140 / Monday, July 23, 2007 / Notices DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. 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–2007–60 and should be submitted on or before August 13, 2007. www.improveirs.org. Please contact Mary Ann Delzer at 1–888–912–1227 or (414) 231–2360 for additional information. The agenda will include the following: Various IRS issues. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–14166 Filed 7–20–07; 8:45 am] Internal Revenue Service BILLING CODE 8010–01–P DEPARTMENT OF THE TREASURY Internal Revenue Service Open Meeting of the Area 5 Committee of the Taxpayer Advocacy Panel (Including the States of Iowa, Kansas, Minnesota, Missouri, Nebraska, Oklahoma, and Texas) Internal Revenue Service (IRS), Treasury. ACTION: Notice of meeting. sroberts on PROD1PC70 with NOTICES AGENCY: SUMMARY: An open meeting of the Area 5 Committee of the Taxpayer Advocacy Panel will be conducted. The Taxpayer Advocacy Panel is soliciting public comment, ideas, and suggestions on improving customer service at the Internal Revenue Service. DATES: The meeting will be held Tuesday, August 14, 2007, at 9:30 a.m. Central Time. FOR FURTHER INFORMATION CONTACT: Mary Ann Delzer at 1–888–912–1227, or (414) 231–2360. SUPPLEMENTARY INFORMATION: Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that a meeting of the Area 5 Committee of the Taxpayer Advocacy Panel will be held Tuesday, August 14, 2007, at 9:30 a.m. Central Time via a telephone conference call. You can submit written comments to the Panel by faxing to (414) 231–2363, or by mail to Taxpayer Advocacy Panel, Stop1006MIL, PO Box 3205, Milwaukee, WI 53201–3205, or you can contact us at http:// 11 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 17:09 Jul 20, 2007 Dated: July 17, 2007. John Fay, Acting Director, Taxpayer Advocacy Panel. [FR Doc. E7–14184 Filed 7–20–07; 8:45 am] BILLING CODE 4830–01–P DEPARTMENT OF THE TREASURY Internal Revenue Service Open Meeting of the Area 7 Committee of the Taxpayer Advocacy Panel (Including the States of Alaska, California, Hawaii, and Nevada) Internal Revenue Service (IRS), Treasury. AGENCY: ACTION: DEPARTMENT OF THE TREASURY Open Meeting of the Ad Hoc Committee of the Taxpayer Advocacy Panel Internal Revenue Service (IRS), Treasury. ACTION: Notice. AGENCY: SUMMARY: An open meeting of the Ad Hoc Committee of the Taxpayer Advocacy Panel will be conducted (via teleconference). The Taxpayer Advocacy Panel is soliciting public comments, ideas and suggestions on improving customer service at the Internal Revenue Service. DATES: The meeting will be held Thursday, August 9, 2007 at 2 p.m. ET. FOR FURTHER INFORMATION CONTACT: Inez De Jesus at 1–888–912–1227, or 954– 423–7977. SUPPLEMENTARY INFORMATION: Notice is hereby given pursuant to section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Ad Hoc Committee of the Taxpayer Advocacy Panel will be held Thursday, August 9, 2007 at 2 p.m. ET via a telephone conference call. If you would like to have the TAP consider a written statement, please call 1–888–912–1227 or 954–423–7977, or write Inez De Jesus, TAP Office, 1000 South Pine Island Road, Suite 340, Plantation, FL 33324. Due to limited conference lines, notification of intent to participate in the telephone conference call meeting must be made with Inez De Jesus. Ms. De Jesus can be reached at 1–888–912– 1227 or 954–423–7977, or post comments to the Web site: http:// www.improveirs.org. The agenda will include: Various IRS issues. Dated: July 18, 2007. John Fay, Acting Director, Taxpayer Advocacy Panel. [FR Doc. E7–14188 Filed 7–20–07; 8:45 am] Notice of meeting. SUMMARY: An open meeting of the Area 7 Committee of the Taxpayer Advocacy Panel will be conducted (via teleconference). The Taxpayer Advocacy Panel (TAP) is soliciting public comments, ideas, and suggestions on improving customer service at the Internal Revenue Service. The TAP will use citizen input to make recommendations to the Internal Revenue Service. The meeting will be held Wednesday, August 15, 2007. DATES: FOR FURTHER INFORMATION CONTACT: Janice Spinks at 1–888–912–1227 or 206–220–6096. Notice is hereby given pursuant to Section 10(a)(2) of the Federal Advisory Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Area 7 Committee of the Taxpayer Advocacy Panel will be held Wednesday, August 15, 2007 from 2 p.m. to 3:30 p.m. Pacific Time via a telephone conference call. The public is invited to make oral comments. Individual comments will be limited to 5 minutes. If you would like to have the TAP consider a written statement, please call 1–888–912–1227 or 206–220–6096, or write to Janice Spinks, TAP Office, 915 2nd Avenue, MS W–406, Seattle, WA 98174 or you can contact us at http:// www.improveirs.org. Due to limited conference lines, notification of intent to participate in the telephone conference call meeting must be made with Ms. Spinks at the telephone numbers listed above. The agenda will include the following: Various IRS issues. SUPPLEMENTARY INFORMATION: Dated: July 17, 2007. John Fay, Acting Director, Taxpayer Advocacy Panel. [FR Doc. E7–14189 Filed 7–20–07; 8:45 am] BILLING CODE 4830–01–P BILLING CODE 4830–01–P Jkt 211001 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 40191 E:\FR\FM\23JYN1.SGM 23JYN1

Agencies

[Federal Register Volume 72, Number 140 (Monday, July 23, 2007)]
[Notices]
[Pages 40188-40191]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-14166]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56070; File No. SR-NYSEArca-2007-60]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change and Amendment No. 1 Thereto Relating to 
Amendments to Arca Equities Rule 12 To Provide Guidance Regarding New 
and Pending Arbitration Claims in Light of the Consolidation of NYSE 
Regulation Into NASD DR

July 13, 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 June 26, 2007, NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange'') filed with the Securities and Exchange Commission the 
proposed rule change as described in Items I, II, and III below, which 
Items have been prepared by NYSE Arca. On July 13, 2007, the NYSEArca 
filed Amendment No. 1 to the proposed rule change.\4\ 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\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ In Amendment No. 1, which supplemented the original filing, 
the Exchange clarified the applicability of NYSE Arca Equities Rule 
12 as it was in effect on or prior to January 31, 2007.
---------------------------------------------------------------------------

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

    NYSE Arca, through its subsidiary NYSE Arca Equities, Inc. (``NYSE 
Arca Equities'' or ``Corporation''), proposes to amend NYSE Arca 
Equities Rule 12.
    NYSE Regulation, Inc. (``NYSE Regulation'') administers an 
arbitration program for NYSE Arca Equities. As part of the 
consolidation of the member firm regulation function of NYSE Regulation 
with the National Association of Securities Dealers, Inc. (``NASD''), 
NYSE Regulation will cease to provide an arbitration program, and its 
existing arbitration department (``NYSE Arbitration'') will be 
consolidated with that of NASD Dispute Resolution, Inc. (``NASD DR'').
    The proposed amendments provide that: (i) All arbitrations filed 
with NYSE Arca Equities after January 31, 2007 and prior to the later 
of the effective date of the consolidation or approval of this proposed 
rule change (the ``Effective Date''), shall continue to be governed by 
the Code of Arbitration contained in the 600 series of the New York 
Stock Exchange LLC Rules (``NYSE Arbitration Rules''); (ii) 
arbitrations filed on or prior to January 31, 2007 shall continue to be 
governed by NYSE Arca Equities Rule 12 as it was in effect on or prior 
to January 31, 2007; and (iii) from and after the Effective Date, 
disputes between NYSE Arca Equity Trading Permit (``ETP'') holders, 
associated persons, and/or their customers will be arbitrated under the 
NASD DR Codes of Arbitration Procedure. The text of the proposed rule 
change is set forth below. Proposed new language is in italic; proposed 
deletions are in brackets.
* * * * *

Rule 12 Arbitration

    (a) General. All arbitrations filed with the Corporation after 
January 31, 2007 and prior to [insert later of effective date of the 
consolidation or approval of this proposed rule change] shall be 
governed by the Code of Arbitration contained in the 600 series of the 
New York Stock Exchange, L.L.C. Rules (``NYSE Arbitration Rules''), as 
the same may be

[[Page 40189]]

in effect from time to time, except that arbitrations filed on or prior 
to January 31, 2007 shall be governed by NYSE Arca Equities Rule 12 as 
it was in effect on or prior to January 31, 2007 [as may be specified 
in this Rule 12]. The term ``member'' as used in this Rule 12 and in 
the NYSE Arbitration Rules shall mean and refer to ETP Holders. From 
and after [insert later of effective date of the consolidation or 
approval of this proposed rule change] (i) any dispute, claim or 
controversy between or among ETP Holders and/or associated persons 
shall be arbitrated pursuant to the NASD Dispute Resolution, Inc. 
(``NASD DR'') Codes of Arbitration Procedure; and, (ii) any dispute, 
claim or controversy between a customer or non-member and an ETP Holder 
and/or associated person arising in connection with the business of 
such ETP Holder and/or in connection with the activities of an 
associated person, shall be arbitrated pursuant to NASD DR Codes of 
Arbitration Procedure as provided by any duly executed and enforceable 
written agreement, or upon demand of the customer or non-member. Such 
obligation to arbitrate shall extend only to those matters that are 
permitted to be arbitrated under NASD DR Codes of Arbitration 
Procedure.
    (b) Referrals. The Corporation may receive, investigate and take 
disciplinary action with respect to any referral it receives from a 
NASD DR arbitrator of any matter which comes to the attention of such 
arbitrator during and in connection with the arbitrator's participation 
in a proceeding, either from the record of the proceeding or from 
material or communications related to the proceeding, that the 
arbitrator has reason to believe may constitute a violation of the 
Corporation's Rules or the federal securities laws.
    (c) Failure to Arbitrate or to Pay an Arbitration Award. Any ETP 
Holder and/or associated person who fails to submit to arbitration a 
matter required to be arbitrated pursuant to this Rule, or that fails 
to honor an arbitration award made pursuant to the NASD DR Codes of 
Arbitration Procedure, or made under the auspices of any other self-
regulatory organization, shall be subject to disciplinary proceedings 
in accordance with NYSE Arca Equities Rule 10.
    (d) Other Actions. The submission of any matter to arbitration as 
provided for under this Rule shall in no way limit or preclude any 
right, action or determination by the Corporation that it would 
otherwise be authorized to adopt, administer or enforce.
    [(b) Jurisdiction. Any dispute, claim or controversy arising out of 
or in connection with the business of any member of the Corporation, or 
arising out of the employment or termination of employment of 
associated person(s) with any member may be arbitrated under this Rule 
12 except that: (1) A dispute, claim, or controversy alleging 
employment discrimination (including a sexual harassment claim) in 
violation of a statute may only be arbitrated if the parties have 
agreed to arbitrate it after the dispute arose; and (2) any type of 
dispute, claim, or controversy that is not permitted to be arbitrated 
under the NYSE Arbitration Rules, such as class action claims, shall 
not be eligible for arbitration under this Rule 12.
    (c) Predispute Arbitration Agreements. The requirements of NYSE 
Arbitration Rules shall apply to predispute arbitration agreements 
between the Corporation's members and/or associated persons and their 
customers.
    (d) Referrals. If any matter comes to the attention of an 
arbitrator during and in connection with the arbitrator's participation 
in a proceeding, either from the record of the proceeding or from 
material or communications related to the proceeding, that the 
arbitrator has reason to believe may constitute a violation of the 
Corporation's Rules or the federal securities laws, the arbitrator may 
refer the matter to NYSE Regulation, Inc. for disciplinary 
investigation.
    (e) Payment of Awards. Any member or associated person who fails to 
honor an award of arbitrators appointed in accordance with this Rule 12 
shall be subject to disciplinary proceedings in accordance with Rule 10 
(Disciplinary Proceedings, Other Hearings, and Appeals).
    (f) Other Actions. The submission of any matter to arbitration 
under this Chapter shall in no way limit or preclude any right, action 
or determination by the Corporation that it would otherwise be 
authorized to adopt, administer or enforce.]
* * * * *

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NYSE Arca 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. NYSE Arca 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 purpose of the proposed rule change is to provide guidance 
regarding both new and pending arbitration claims in light of the 
consolidation of the member firm regulation function of NYSE Regulation 
into NASD DR.\5\ NYSE Arbitration currently administers an arbitration 
program for NYSE Arca Equities, governed by what is referred to as 
``Rule 12.'' \6\
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    \5\ The NYSE has proposed a separate filing related to the 
consolidation of NYSE Arbitration into NASD DR. See Securities 
Exchange Act Release No. 55818 (May 25, 2007), 72 FR 30898 (June 4, 
2007) (SR-NYSE 2007-48). On June 21, 2007, the NYSE filed Amendment 
No. 1 to this proposed rule change. See Securities Exchange Act 
Release No. 56015 (July 5, 2007), 72 FR 37811 (July 11, 2007).
    \6\ Although Rule 12 has subsequently been amended, for purposes 
of administering NYSE Arca Equities arbitrations filed on or prior 
to January 31, 2007, NYSE Arbitration follows Rule 12 as it was in 
effect on that date.
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    As part of the consolidation of NYSE Regulation with NASD,\7\ NYSE 
Regulation will cease to administer an arbitration program, and its 
existing arbitration department will be consolidated with NASD DR. As a 
result, on and after the date of the consolidation, all arbitration 
claims filed prior to the Effective Date, and previously subject to 
Rule 12 or NYSE Regulation rules, will be administered by NASD DR 
pursuant to a Regulatory Services Agreement with the New York Stock 
Exchange LLC (``NYSE'').
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    \7\ Additional information regarding the consolidation may be 
found in: SR-NASD-2007-23 (March 19, 2007) concerning proposed 
amendments to the By-Laws of NASD to implement governance and 
related changes to accommodate the consolidation of the member firm 
regulatory functions of NASD and NYSE Regulation, Inc.; and SR-NYSE-
2007-22 (February 27, 2007) concerning proposed amendments to 
several NYSE rules which, among other matters, harmonize the rules 
with corresponding NASD regulatory requirements.
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    The rules governing the administration of any particular 
arbitration will depend on the date the case was filed. This will 
ensure that any person that filed an arbitration under a particular set 
of arbitration rules will continue to have the case administered 
pursuant to those rules through to the case's conclusion. There are two 
categories of cases. First, NYSE Arca Equities cases filed on or prior 
to January 31, 2007 are and would continue to be governed by Rule 12 as 
it was in effect on that date. Second, NYSE Arca Equities cases filed 
after January 31, 2007, but prior to the

[[Page 40190]]

Effective Date will continue to be governed by existing NYSE Regulation 
arbitration rules.\8\
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    \8\ See Securities Exchange Act Release No. 55142 (January 19, 
2007), 72 FR 3898 (January 26, 2007) (SR-NYSEArca-2006-54) and 
Securities Exchange Act Release No. 55141 (January 19, 2007), 72 FR 
3897 (January 26, 2007) (SR-NYSEArca-2006-55).
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    NYSE Arca Equities Rule 12, as amended, would provide detailed 
guidance concerning claims involving ETP Holders and/or associated 
persons that are asserted on and after the Effective Date.\9\ First, 
any dispute, claim or controversy between or among ETP Holders and/or 
associated persons shall be arbitrated pursuant to the NASD DR Codes of 
Arbitration Procedure. Second, any dispute, claim or controversy 
between a customer or a non-member and an ETP Holder and/or associated 
person arising in connection with the business of such ETP Holder and/
or in connection with the activities of an associated person, shall be 
arbitrated pursuant to NASD DR Codes of Arbitration Procedure as 
provided by any duly executed and enforceable written agreement, or 
upon the demand of the customer or non-member. This obligation to 
arbitrate shall extend only to those matters that are permitted to be 
arbitrated under NASD DR Codes of Arbitration Procedure.
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    \9\ It is proposed that the provisions in the current Rule 
12(b)-(f) be deleted because these sections would be replaced by the 
proposed Rule 12 provisions described herein.
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    In almost all cases the change from NYSE rules or NYSE Arca 
Equities rules to NASD DR arbitration rules should not result in 
material, substantive differences to persons participating in the 
arbitration process. However, one difference is the treatment of 
employment discrimination claims. NASD DR rules provide that any claim 
alleging employment discrimination, including any sexual harassment 
claims, in violation of a statute, will be eligible for arbitration 
pursuant to either a pre-dispute or a post-dispute agreement to 
arbitrate. In contrast, NYSE Rule 600(f), NYSE Rule 347(b) and current 
NYSE Arca Equities Rule 12(b) permit claims to be arbitrated only when 
the parties have agreed to arbitrate the claim after it has arisen.
    Proposed Rule 12(b) would explicitly retain NYSE Arca Equities' 
enforcement authority related to arbitration. In appropriate cases, 
arbitrators would refer to NYSE Arca Equities potential violations of 
NYSE Arca Equities' rules or the federal securities laws that come to 
their attention during and in connection with a proceeding. Rule 12(b) 
would specify that NYSE Arca Equities would retain the ability to take 
action based on such referrals that may come from arbitrators in cases 
being arbitrated at NASD DR.
    Proposed Rule 12(c) also would provide that any ETP Holder and/or 
associated person of any ETP Holder, that fails to honor an award of 
arbitrators rendered under the NASD DR Codes of Arbitration Procedure, 
or under the auspices of any other self-regulatory organization, shall 
be subject to disciplinary proceedings in accordance with NYSE Arca 
Equities Rule 10. Proposed Rule 12(c) also would specify that failure 
to submit a matter to arbitration as required by Rule 12 also would 
subject the ETP Holder and/or associated person to Exchange 
disciplinary action.
    Proposed Rule 12(d) would also specify that the submission of any 
matter to arbitration as provided for under the Rule shall in no way 
limit or preclude any right, action or determination by NYSE Arca 
Equities that it would otherwise be authorized to adopt, administer or 
enforce.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of Section 6(b)(5) \10\ of the Act, which 
requires, among other things, that the rules of an Exchange be designed 
to promote just and equitable principles of trade and to protect 
investors and the public interest. The proposed rule change will 
streamline the arbitration process and, after a transitional period, 
provide for a unified and more efficient arbitration forum with one set 
of arbitration rules and administrative procedures. This will allow 
resources to be devoted to maintaining and improving the NASD DR 
program, rather than splitting resources among duplicative programs. As 
a result of these improvements, the proposed rule change will better 
protect investors and the public interest.
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    \10\ 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

    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 self-regulatory organization consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, is consistent with the Exchange Act. Comments may 
be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send e-mail to rule-comments@sec.gov. Please include File 
Number SR-NYSEArca-2007-60 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-2007-60. 
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 (http://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, 100 F Street, 
NE., Washington,

[[Page 40191]]

DC 20549, on official business days between the hours of 10 a.m. and 3 
p.m. 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-2007-60 and should be submitted 
on or before August 13, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-14166 Filed 7-20-07; 8:45 am]
BILLING CODE 8010-01-P