Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Pertaining to the Imposition of Fines for Minor Rule Violations, 6757-6759 [E8-1967]
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Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Notices
general, to protect investors and the
public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change would 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
IV. Solicitation of Comments
The Exchange has neither solicited
nor received written comments on the
proposed rule change.
rmajette on PROD1PC64 with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change
does not: (i) Significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days after the date of
filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, the proposed rule
change has become effective pursuant to
Section 19(b)(3)(A) of the Act17 and
subparagraph (f)(6) of Rule 19b–4
thereunder.18
A proposed rule change filed under
19b–4(f)(6) normally may not become
operative prior to 30 days after the date
of filing.19 However, Rule 19b–
4(f)(6)(iii)20 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has satisfied the five-day
prefiling requirement.21 In addition, the
Exchange has requested that the
Commission waive the 30-day preoperative delay and designate the
proposed rule change to become
operative upon filing.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because it would allow the Exchange to
immediately implement this proposal
and would simplify the existing
procedures for reallocating securities
based upon the request of the listed
company by eliminating the mediation
process contained in Section 806.01.
The Commission designates the
17 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
19 17 CFR 240.19b–4(f)(6)(iii).
20 Id.
21 Id.
18 17
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15:34 Feb 04, 2008
proposal to become effective and
operative upon filing.22
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in the furtherance of the
purposes of the Act.
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml ); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2008–08 on the
subject line.
• 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–2008–08. 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 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. All comments received
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Fmt 4703
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–NYSE–
2008–08 and should be submitted on or
before February 26, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–1999 Filed 2–4–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57220; File No. SR–
NYSEArca–2008–08]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change Pertaining to the
Imposition of Fines for Minor Rule
Violations
January 29, 2008.
Paper Comments
22 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
impact of the proposed rule on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
Jkt 214001
6757
Sfmt 4703
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’)1 and Rule 19b–4 thereunder,2
notice is hereby given that on January
18, 2008, NYSE Arca, Inc. (‘‘NYSE
Arca’’ or ‘‘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
prepared substantially by the Exchange.
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 Exchange proposes to amend
NYSE Arca Rule 6.24, ‘‘Exercise of
Option Contracts,’’ and NYSE Arca Rule
10.12, ‘‘Minor Rule Plan.’’ The text of
the proposed rule change is available on
the Exchange’s Web site (https://
www.nyse.com), at the Exchange’s
principal office, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
23 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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6758
Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Notices
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
rmajette on PROD1PC64 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
NYSE Arca Rule 6.24 contains special
procedures that apply to the exercise of
options on the last business day before
expiration. The Exchange proposes to
amend NYSE Arca Rule 6.24 to: (i) Add
a reference to new terminology; (ii)
make minor revisions to the procedures
related to exercising option contracts;
(iii) amend Commentary .08 of NYSE
Arca Rule 6.24 to authorize the
Exchange to sanction an OTP Holder or
OTP Firm that fails to follow NYSE Arca
Rule 6.24, pursuant to the Minor Rule
Plan (‘‘MRP’’); and (iv) add the
recommended sanctions to the MRP
contained in NYSE Arca Rule 10.12.
The proposed changes are described
briefly below.
An option holder desiring to exercise
or not exercise expiring options must
either: (i) Take no action and allow
exercise determinations to be made in
accordance with the Options Clearing
Corporation’s (‘‘OCC’’) Ex-by-Ex
procedures, where applicable; or (ii)
submit a Contrary Exercise Advice
(‘‘CEA’’) to the Exchange. A CEA is a
communication to either: (i) not exercise
an option that would be automatically
exercised under OCC’s Ex-by-Ex
procedure, or (ii) exercise an option that
would not be automatically exercised
under OCC’s Ex-by-Ex procedure. A
CEA is also referred to within the
options industry as an Expiring Exercise
Declaration (‘‘EED’’). While the form
itself may be called by a different name,
the purpose and procedure for
submitting an EED is identical to that of
a CEA. The Exchange proposes adding
a parenthetical reference to EEDs within
NYSE Arca Rule 6.24.
An OTP Holder or OTP Firm that
manually submits a CEA to the
Exchange does so by completing a form
and putting it in the Exchange’s
Contrary Exercise Advice Box. Going
forward, the Exchange will discontinue
the use of the Contrary Exercise Advice
Box; and instead, an OTP Holder or OTP
Firm will submit a CEA directly to a
designated representative of the
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15:34 Feb 04, 2008
Jkt 214001
Exchange’s Options Surveillance
Department.
Commentary .08 to NYSE Arca Rule
6.24 provides that the failure of any
OTP Holder to follow the provisions
contained in this rule may be referred to
the Ethics and Business Conduct
Committee (‘‘EBCC’’) and result in the
assessment of a fine, which may
include, but is not limited to, the
disgorgement of potential economic gain
obtained or loss avoided by the subject
exercise. Referral to the EBCC involves
a formal disciplinary proceeding. NYSE
Arca proposes to add a provision to
Commentary .08 that would authorize
the Exchange to sanction an OTP Holder
or OTP Firm that fails to follow NYSE
Arca Rule 6.24, pursuant to the MRP.
The Exchange would retain the
authority to refer violators to the EBCC
for formal disciplinary proceedings.
The Exchange also proposes adding
the phrase ‘‘or OTP Firm’’ to
Commentary .08 to NYSE Arca Rule
6.24. The Exchange has always intended
to apply NYSE Arca Rule 6.24 equally
to both OTP Holders and OTP Firms.
The addition of OTP Firms will codify
the original intent of NYSE Arca Rule
6.24.
Under this proposal, violators of
NYSE Arca Rule 6.24 may be subject to
MRP fines based on the number of
violations occurring within a rolling 24month period. An individual OTP
Holder would be subject to a fine of
$500 for the first offense, $1,000 for the
second offense, and $2,500 for the third
offense. An OTP Firm would be subject
to a $1,000 fine for the first offense,
$2,500 for the second offense, and
$5,000 for a third offense.3 A list of the
proposed fines would be added to the
MRP fine schedule in NYSE Arca Rule
10.12. The MRP provides a reasonable
means of addressing rule violations that
do not necessarily rise to the level of
requiring formal disciplinary
proceedings, while also providing a
greater flexibility in handling certain
violations. Adopting a provision that
would allow the Exchange to sanction
violators under the MRP by no means
minimizes the importance of
compliance with NYSE Arca Rule 6.24.
The Exchange believes that the violation
of any of its rules is a serious matter.
The addition of a sanction under the
MRP simply serves to add an additional
method for disciplining violators of
NYSE Arca Rule 6.24. The Exchange
would continue to conduct surveillance
with due diligence and make its
3 The Exchange, in its discretion, processes
subsequent violations, after the third violation,
according to NYSE Arca Rule 10.4. See NYSE Arca
Rule 10.12(h), n.1.
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Fmt 4703
Sfmt 4703
determination, on a case by case basis,
whether a fine under the MRP is
appropriate, or whether a violation
should be subject to formal disciplinary
proceedings.
In addition, the Exchange, as a
member of the Intermarket Surveillance
Group (‘‘ISG’’), as well as certain other
self-regulatory organizations (‘‘SRO’’)
executed and filed on October 29, 2007
with the Commission, an Agreement
pursuant to Section 17(d) of the Act (the
‘‘17d–2 Agreement’’).4 As set forth in
the 17d–2 Agreement, the SROs have
agreed that their respective rules
concerning the filing of CEAs are
common rules. As a result, the proposal
to add CEA/EED violations to the NYSE
Arca MRP will further result in
consistency in sanctions among the
SROs that are signatories to the 17d–2
Agreement concerning CEA/EED
violations.
NYSE Arca Rule 10.12(h)(33) and
Rule 10.12(k)(i)(33) are presently
designated as ‘‘Reserved.’’ The
Exchange proposes to use these reserved
rule numbers for new NYSE Arca Rule
10.12(h)(33), which would reference
CEA/EED violations pursuant to Rule
6.24, and new NYSE Arca Rule
10.12(k)(i)(33), which would include the
recommended fines for CEA/EED
violations.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,5 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,6 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities,
and to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system. Specifically, the Exchange
believes that the proposed rule change
will strengthen its ability to carry out its
oversight responsibilities as an SRO and
reinforce its surveillance and
enforcement functions. Additionally,
the Exchange believes that the proposed
rule change will promote consistency in
minor rule violations and respective
SRO reporting obligations as set forth
pursuant to Rule 19d–1(c)(2) under the
4 See letter to Richard Holley, Senior Special
Counsel, Division of Trading and Markets,
Commission, from Nyieri Nazarian, Assistant
General Counsel, American Stock Exchange LLC
(‘‘Amex’’), dated October 29, 2007.
5 15 U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(5).
E:\FR\FM\05FEN1.SGM
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Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Notices
Act,7 which governs minor rule
violation plans.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NYSE Arca 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 neither solicited nor
received comments on the proposal.
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:
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, 100 F Street, NE., Washington,
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 the Exchange. 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–2008–08 and
should be submitted on or before
February 26, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–1967 Filed 2–4–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–57227; File No. SR–
NYSEArca–2008–12]
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSEArca–2008–08 on the
subject line.
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change Relating to Pricing
Information for Components
Underlying Currency-Linked Securities
rmajette on PROD1PC64 with NOTICES
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–2008–08. 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
January 29, 2008.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on January
17, 2008, NYSE Arca, Inc. (‘‘NYSE
Arca’’ or ‘‘Exchange’’), through its
wholly owned subsidiary, NYSE Arca
Equities, Inc. (‘‘NYSE Arca Equities’’),
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
8 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
7 17
CFR 240.19d–1(c)(2).
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15:34 Feb 04, 2008
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PO 00000
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Fmt 4703
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6759
have been substantially prepared by the
Exchange. 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 Exchange proposes to amend
NYSE Arca Equities Rule
5.2(j)(6)(B)(III)(1), which sets forth the
Exchange’s initial listing criteria for
Currency-Linked Securities,3 to permit
the listing and trading of CurrencyLinked Securities where the pricing
information for one or more currencies
comprising the Currency Reference
Asset is the generally accepted forward
price for the currency exchange rate in
question. The text of the proposed rule
change is available at the Exchange, the
Commission’s Public Reference Room,
and https://www.nyse.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
NYSE Arca Equities Rule
5.2(j)(6)(B)(III)(1) to permit the listing of
Currency-Linked Securities where the
pricing information for some or all of
the components of the Currency
Reference Asset is the generally
accepted forward price for the currency
exchange rate in question. The ability
for an issuer to use forward pricing
information under proposed NYSE Arca
Equities Rule 5.2(j)(6)(B)(III)(1)(b) for
any component of a Currency Reference
3 Currency-Linked Securities are securities that
provide for payment at maturity of a cash amount
based on the performance of one or more
currencies, or options or currency futures or other
currency derivatives or Currency Trust Shares (as
defined in NYSE Arca Equities Rule 8.202), or a
basket or index of any of the foregoing (‘‘Currency
Reference Asset’’). See NYSE Arca Equities Rule
5.2(j)(6).
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]]>Agencies
[Federal Register Volume 73, Number 24 (Tuesday, February 5, 2008)]
[Notices]
[Pages 6757-6759]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-1967]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57220; File No. SR-NYSEArca-2008-08]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Pertaining to the Imposition of Fines for Minor
Rule Violations
January 29, 2008.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'')\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on January 18, 2008, NYSE Arca, Inc. (``NYSE Arca'' or ``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 prepared substantially by the Exchange. 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\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend NYSE Arca Rule 6.24, ``Exercise of
Option Contracts,'' and NYSE Arca Rule 10.12, ``Minor Rule Plan.'' The
text of the proposed rule change is available on the Exchange's Web
site (https://www.nyse.com), at the Exchange's principal office, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
[[Page 6758]]
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
NYSE Arca Rule 6.24 contains special procedures that apply to the
exercise of options on the last business day before expiration. The
Exchange proposes to amend NYSE Arca Rule 6.24 to: (i) Add a reference
to new terminology; (ii) make minor revisions to the procedures related
to exercising option contracts; (iii) amend Commentary .08 of NYSE Arca
Rule 6.24 to authorize the Exchange to sanction an OTP Holder or OTP
Firm that fails to follow NYSE Arca Rule 6.24, pursuant to the Minor
Rule Plan (``MRP''); and (iv) add the recommended sanctions to the MRP
contained in NYSE Arca Rule 10.12. The proposed changes are described
briefly below.
An option holder desiring to exercise or not exercise expiring
options must either: (i) Take no action and allow exercise
determinations to be made in accordance with the Options Clearing
Corporation's (``OCC'') Ex-by-Ex procedures, where applicable; or (ii)
submit a Contrary Exercise Advice (``CEA'') to the Exchange. A CEA is a
communication to either: (i) not exercise an option that would be
automatically exercised under OCC's Ex-by-Ex procedure, or (ii)
exercise an option that would not be automatically exercised under
OCC's Ex-by-Ex procedure. A CEA is also referred to within the options
industry as an Expiring Exercise Declaration (``EED''). While the form
itself may be called by a different name, the purpose and procedure for
submitting an EED is identical to that of a CEA. The Exchange proposes
adding a parenthetical reference to EEDs within NYSE Arca Rule 6.24.
An OTP Holder or OTP Firm that manually submits a CEA to the
Exchange does so by completing a form and putting it in the Exchange's
Contrary Exercise Advice Box. Going forward, the Exchange will
discontinue the use of the Contrary Exercise Advice Box; and instead,
an OTP Holder or OTP Firm will submit a CEA directly to a designated
representative of the Exchange's Options Surveillance Department.
Commentary .08 to NYSE Arca Rule 6.24 provides that the failure of
any OTP Holder to follow the provisions contained in this rule may be
referred to the Ethics and Business Conduct Committee (``EBCC'') and
result in the assessment of a fine, which may include, but is not
limited to, the disgorgement of potential economic gain obtained or
loss avoided by the subject exercise. Referral to the EBCC involves a
formal disciplinary proceeding. NYSE Arca proposes to add a provision
to Commentary .08 that would authorize the Exchange to sanction an OTP
Holder or OTP Firm that fails to follow NYSE Arca Rule 6.24, pursuant
to the MRP. The Exchange would retain the authority to refer violators
to the EBCC for formal disciplinary proceedings.
The Exchange also proposes adding the phrase ``or OTP Firm'' to
Commentary .08 to NYSE Arca Rule 6.24. The Exchange has always intended
to apply NYSE Arca Rule 6.24 equally to both OTP Holders and OTP Firms.
The addition of OTP Firms will codify the original intent of NYSE Arca
Rule 6.24.
Under this proposal, violators of NYSE Arca Rule 6.24 may be
subject to MRP fines based on the number of violations occurring within
a rolling 24-month period. An individual OTP Holder would be subject to
a fine of $500 for the first offense, $1,000 for the second offense,
and $2,500 for the third offense. An OTP Firm would be subject to a
$1,000 fine for the first offense, $2,500 for the second offense, and
$5,000 for a third offense.\3\ A list of the proposed fines would be
added to the MRP fine schedule in NYSE Arca Rule 10.12. The MRP
provides a reasonable means of addressing rule violations that do not
necessarily rise to the level of requiring formal disciplinary
proceedings, while also providing a greater flexibility in handling
certain violations. Adopting a provision that would allow the Exchange
to sanction violators under the MRP by no means minimizes the
importance of compliance with NYSE Arca Rule 6.24. The Exchange
believes that the violation of any of its rules is a serious matter.
The addition of a sanction under the MRP simply serves to add an
additional method for disciplining violators of NYSE Arca Rule 6.24.
The Exchange would continue to conduct surveillance with due diligence
and make its determination, on a case by case basis, whether a fine
under the MRP is appropriate, or whether a violation should be subject
to formal disciplinary proceedings.
---------------------------------------------------------------------------
\3\ The Exchange, in its discretion, processes subsequent
violations, after the third violation, according to NYSE Arca Rule
10.4. See NYSE Arca Rule 10.12(h), n.1.
---------------------------------------------------------------------------
In addition, the Exchange, as a member of the Intermarket
Surveillance Group (``ISG''), as well as certain other self-regulatory
organizations (``SRO'') executed and filed on October 29, 2007 with the
Commission, an Agreement pursuant to Section 17(d) of the Act (the
``17d-2 Agreement'').\4\ As set forth in the 17d-2 Agreement, the SROs
have agreed that their respective rules concerning the filing of CEAs
are common rules. As a result, the proposal to add CEA/EED violations
to the NYSE Arca MRP will further result in consistency in sanctions
among the SROs that are signatories to the 17d-2 Agreement concerning
CEA/EED violations.
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\4\ See letter to Richard Holley, Senior Special Counsel,
Division of Trading and Markets, Commission, from Nyieri Nazarian,
Assistant General Counsel, American Stock Exchange LLC (``Amex''),
dated October 29, 2007.
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NYSE Arca Rule 10.12(h)(33) and Rule 10.12(k)(i)(33) are presently
designated as ``Reserved.'' The Exchange proposes to use these reserved
rule numbers for new NYSE Arca Rule 10.12(h)(33), which would reference
CEA/EED violations pursuant to Rule 6.24, and new NYSE Arca Rule
10.12(k)(i)(33), which would include the recommended fines for CEA/EED
violations.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\5\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\6\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, and to remove impediments to and perfect
the mechanism of a free and open market and a national market system.
Specifically, the Exchange believes that the proposed rule change will
strengthen its ability to carry out its oversight responsibilities as
an SRO and reinforce its surveillance and enforcement functions.
Additionally, the Exchange believes that the proposed rule change will
promote consistency in minor rule violations and respective SRO
reporting obligations as set forth pursuant to Rule 19d-1(c)(2) under
the
[[Page 6759]]
Act,\7\ which governs minor rule violation plans.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
\7\ 17 CFR 240.19d-1(c)(2).
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B. Self-Regulatory Organization's Statement on Burden on Competition
NYSE Arca 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 neither solicited nor received comments on the
proposal.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2008-08 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-2008-08. 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, 100 F Street,
NE., Washington, 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 the Exchange. 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-2008-08 and should
be submitted on or before February 26, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
Florence E. Harmon,
Deputy Secretary.
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\8\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E8-1967 Filed 2-4-08; 8:45 am]
BILLING CODE 8011-01-P
