Self-Regulatory Organizations; National Stock Exchange, Inc.; Order Approving Proposed Rule Change to Modify Chapter VII of the Exchange's Rules Regarding Suspensions of an ETP Holder by Certain Exchange Officers, 41377 [E7-14506]

Download as PDF Federal Register / Vol. 72, No. 144 / Friday, July 27, 2007 / Notices For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–14504 Filed 7–26–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56113; File No. SR–NSX– 2007–05] Self-Regulatory Organizations; National Stock Exchange, Inc.; Order Approving Proposed Rule Change to Modify Chapter VII of the Exchange’s Rules Regarding Suspensions of an ETP Holder by Certain Exchange Officers July 20, 2007. I. Introduction On May 9, 2007, the National Stock Exchange, Inc. (‘‘NSX’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change, pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder 2 to modify Chapter VII of the Exchange’s rules to provide that the Chairman of the Exchange’s Board of Directors (‘‘Chairman’’) or the Exchange’s Chief Regulatory Officer, or their respective designees, would have the authority to summarily suspend or place limitations or conditions on an ETP Holder or summarily suspend a person from access to Exchange services in certain circumstances. Notice of the proposed rule change was published for comment in the Federal Register on June 18, 2007.3 The Commission received no comments on the proposal. This order approves the proposed rule change. jlentini on PROD1PC65 with NOTICES II. Description of the Proposed Rule Change NSX Rule 7.1 currently authorizes the Chairman of the NSX Board of Directors (‘‘Chairman’’) or NSX’s President (‘‘President’’) to summarily suspend an ETP Holder, or impose such conditions and restrictions upon an ETP Holder as are reasonably necessary for the protection of investors, the Exchange, the creditors, and the customers of such ETP Holder, if such ETP Holder, among other things, has failed to perform its contracts, is insolvent, or is in such 11 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 55893 (June 11, 2007), 72 FR 33551. 1 15 VerDate Aug<31>2005 16:53 Jul 26, 2007 Jkt 211001 financial or operational condition or operating its business in such a manner that it cannot be permitted to continue in business with safety to its customers, creditors, and other ETP Holders of the Exchange.4 The Chairman or President may also lift such a suspension without further proceedings, if appropriate.5 NSX Rule 7.6 currently permits the Chairman or President to, under certain circumstances, summary limit or prohibit, persons from access to services offered by the Exchange. NSX proposes to amend Rules 7.1 and 7.6 to authorize the Chairman or NSX’s Chief Regulatory Officer (‘‘CRO’’), or their respective designees, to impose and lift suspensions as described above. NSX’s President would no longer have such authority. The Exchange represents that the designee for the Chairman would be the Chairman of the Exchange’s Regulatory Oversight Committee (‘‘ROC’’), a member of the ROC, or another independent member of the Exchange’s Board of Directors,6 in that order of priority. The designee for the CRO would be an officer in the Exchange’s Regulatory Services Division. The proposal does not otherwise modify NSX’s rules regarding suspension, including its provisions for review of summary actions. III. Discussion and Commission Findings The Commission has reviewed the proposed rule change and finds that it is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange.7 Specifically, the Commission finds that the proposed rule change furthers the objectives of section 6(b)(1) 8 of the Act, which requires the Exchange to be so organized and have the capacity to be able to carry out the purposes of the Act and to comply, and to enforce compliance by its members, with the Act and the rules of the Exchange. In addition, the Commission finds that the proposed rule change, as amended, is consistent with section 6(b)(5) of the Act,9 which requires, among other things, that the rules of a national NSX Rule 7.1(a). NSX Rule 7.1(c). 6 NSX By-Law Section 1.1(I)(1) defines ‘‘Independent Director’’ as a member of the Board that the Board has determined to have no material relationship with the Exchange or any affiliate of the Exchange, or any ETP Holder or any affiliate of any ETP Holder, other than as a member of the Board. 7 In approving this proposed 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). 8 15 U.S.C. 78f(b)(1). 9 15 U.S.C. 78f(b)(5). PO 00000 4 See 5 See Frm 00093 Fmt 4703 Sfmt 4703 41377 securities exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Commission believes that the reallocation of authority under NSX Rules 7.1 and 7.6 from the Chairman and President to the Chairman and CRO, or their respective designees, is consistent with the Act. The Commission also believes that the reallocation is designed to provide for continuity in the event that the Chairman or CRO is unavailable. The Commission notes that the Exchange’s rules governing the review of suspensions remain unchanged. IV. Conclusion It is therefore ordered, pursuant to section 19(b)(2) of the Act,10 that the proposed rule change (File No. SR– NSX–2007–05) be, and hereby is, approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–14506 Filed 7–26–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56107; File No. SR–NYSE– 2007–56] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Extending the Portfolio Margin Pilot Program Under NYSE Rules 431 (Margin Requirements) and 726 (Delivery of Options Disclosure Document and Prospectus) July 19, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on June 28, 2007, the New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. 10 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 11 17 E:\FR\FM\27JYN1.SGM 27JYN1

Agencies

[Federal Register Volume 72, Number 144 (Friday, July 27, 2007)]
[Notices]
[Page 41377]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-14506]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56113; File No. SR-NSX-2007-05]


Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Order Approving Proposed Rule Change to Modify Chapter VII of the 
Exchange's Rules Regarding Suspensions of an ETP Holder by Certain 
Exchange Officers

July 20, 2007.

I. Introduction

    On May 9, 2007, the National Stock Exchange, Inc. (``NSX'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change, pursuant to section 19(b)(1) 
of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder \2\ to modify Chapter VII of the Exchange's rules to provide 
that the Chairman of the Exchange's Board of Directors (``Chairman'') 
or the Exchange's Chief Regulatory Officer, or their respective 
designees, would have the authority to summarily suspend or place 
limitations or conditions on an ETP Holder or summarily suspend a 
person from access to Exchange services in certain circumstances. 
Notice of the proposed rule change was published for comment in the 
Federal Register on June 18, 2007.\3\ The Commission received no 
comments on the proposal. This order approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 55893 (June 11, 
2007), 72 FR 33551.
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    NSX Rule 7.1 currently authorizes the Chairman of the NSX Board of 
Directors (``Chairman'') or NSX's President (``President'') to 
summarily suspend an ETP Holder, or impose such conditions and 
restrictions upon an ETP Holder as are reasonably necessary for the 
protection of investors, the Exchange, the creditors, and the customers 
of such ETP Holder, if such ETP Holder, among other things, has failed 
to perform its contracts, is insolvent, or is in such financial or 
operational condition or operating its business in such a manner that 
it cannot be permitted to continue in business with safety to its 
customers, creditors, and other ETP Holders of the Exchange.\4\ The 
Chairman or President may also lift such a suspension without further 
proceedings, if appropriate.\5\ NSX Rule 7.6 currently permits the 
Chairman or President to, under certain circumstances, summary limit or 
prohibit, persons from access to services offered by the Exchange.
---------------------------------------------------------------------------

    \4\ See NSX Rule 7.1(a).
    \5\ See NSX Rule 7.1(c).
---------------------------------------------------------------------------

    NSX proposes to amend Rules 7.1 and 7.6 to authorize the Chairman 
or NSX's Chief Regulatory Officer (``CRO''), or their respective 
designees, to impose and lift suspensions as described above. NSX's 
President would no longer have such authority. The Exchange represents 
that the designee for the Chairman would be the Chairman of the 
Exchange's Regulatory Oversight Committee (``ROC''), a member of the 
ROC, or another independent member of the Exchange's Board of 
Directors,\6\ in that order of priority. The designee for the CRO would 
be an officer in the Exchange's Regulatory Services Division. The 
proposal does not otherwise modify NSX's rules regarding suspension, 
including its provisions for review of summary actions.
---------------------------------------------------------------------------

    \6\ NSX By-Law Section 1.1(I)(1) defines ``Independent 
Director'' as a member of the Board that the Board has determined to 
have no material relationship with the Exchange or any affiliate of 
the Exchange, or any ETP Holder or any affiliate of any ETP Holder, 
other than as a member of the Board.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    The Commission has reviewed the proposed rule change and finds that 
it is consistent with the Act and the rules and regulations thereunder 
applicable to a national securities exchange.\7\ Specifically, the 
Commission finds that the proposed rule change furthers the objectives 
of section 6(b)(1) \8\ of the Act, which requires the Exchange to be so 
organized and have the capacity to be able to carry out the purposes of 
the Act and to comply, and to enforce compliance by its members, with 
the Act and the rules of the Exchange. In addition, the Commission 
finds that the proposed rule change, as amended, is consistent with 
section 6(b)(5) of the Act,\9\ which requires, among other things, that 
the rules of a national securities exchange be designed to promote just 
and equitable principles of trade, to remove impediments to and perfect 
the mechanism of a free and open market and a national market system, 
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \7\ In approving this proposed 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).
    \8\ 15 U.S.C. 78f(b)(1).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that the reallocation of authority under 
NSX Rules 7.1 and 7.6 from the Chairman and President to the Chairman 
and CRO, or their respective designees, is consistent with the Act. The 
Commission also believes that the reallocation is designed to provide 
for continuity in the event that the Chairman or CRO is unavailable. 
The Commission notes that the Exchange's rules governing the review of 
suspensions remain unchanged.

IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\10\ that the proposed rule change (File No. SR-NSX-2007-05) be, 
and hereby is, approved.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(2).
    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
 Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-14506 Filed 7-26-07; 8:45 am]
BILLING CODE 8010-01-P