Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by New York Stock Exchange LLC Amending NYSE Rule 472 (Communications With the Public), 9459-9461 [E9-4557]
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Federal Register / Vol. 74, No. 41 / Wednesday, March 4, 2009 / Notices
NASDAQ and NYSE, NASDAQ is
decreasing the liquidity provider rebate
it pays to members with an average
daily volume through the NASDAQ
Market Center in all securities during
the month of more than 35 million
shares of liquidity provided, from
$0.0031 per share to $0.0028 per share.
The change reverses an ‘‘inverted’’
pricing structure that had previously
been in effect for this group of members
with respect to these securities, under
which the rebate for providing liquidity
exceeded the charge of $0.0029 to access
liquidity.
2. Statutory Basis
NASDAQ believes that the proposed
rule change is consistent with the
provisions of Section 6 of the Act,11 in
general, and with Section 6(b)(4) of the
Act,12 in particular, in that it provides
for the equitable allocation of reasonable
dues, fees and other charges among
members and issuers and other persons
using any facility or system which
NASDAQ operates or controls. The
impact of the changes upon the net fees
paid by a particular market participant
will depend upon a number of variables,
including its monthly volume, the order
types it uses, and the prices of its quotes
and orders (i.e., its propensity to add or
remove liquidity). NASDAQ notes that
it operates in a highly competitive
market in which market participants can
readily direct order flow to competing
venues if they deem fee levels at a
particular venue to be excessive. In
general, the proposed changes are
designed to ensure that the fees charged
by NASDAQ to route to NYSE and BX
reflect the fees charged to, and rebates
received by, NASDAQ in connection
with such routing. The proposal also
reduces the rebate paid to certain
members with respect to providing
liquidity in stocks listed on venues
other than NYSE and NASDAQ.
NASDAQ believes, however, that its
fees for trading such stocks remain
competitive with those charged by other
venues and therefore continue to be
reasonable and equitably allocated to
those members that opt to direct orders
to NASDAQ rather than competing
venues.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NASDAQ does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
11 15
12 15
U.S.C. 78f.
U.S.C. 78f(b)(4).
VerDate Nov<24>2008
15:08 Mar 03, 2009
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act 13 and
subparagraph (f)(2) of Rule 19b–4
thereunder.14 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 furtherance of the
purposes of the Act.
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 rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2009–013 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2009–013. 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
13 15
14 17
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U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
Frm 00078
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9459
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 the filing will also be available
for inspection and copying at the
principal office of the self-regulatory
organization. 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–
NASDAQ–2009–013 and should be
submitted on or before March 25, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–4563 Filed 3–3–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59450; File No. SR–NYSE–
2009–14]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change and
Amendment No. 1 Thereto by New
York Stock Exchange LLC Amending
NYSE Rule 472 (Communications With
the Public)
February 25, 2009.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on February
5, 2009, New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II, below, which Items have
been prepared by the self-regulatory
organization. The Exchange filed the
proposal as a ‘‘non-controversial’’
proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 4 and
Rule 19b–4(f)(6) thereunder.5 NYSE
filed Amendment No. 1 to the proposed
15 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
4 15 U.S.C. 78s(b)(3)(A)(iii).
5 17 CFR 240.19b–4(f)(6).
1 15
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Federal Register / Vol. 74, No. 41 / Wednesday, March 4, 2009 / Notices
rule change on February 12, 2009.6 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 Rule 472 to conform with
amendments to corresponding FINRA
Incorporated NYSE Rule 472 (defined
below) recently filed by the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) and approved by the
Commission.7
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
self-regulatory organization 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 those 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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to amend NYSE Rule 472 to
conform with amendments to
corresponding FINRA Incorporated
NYSE Rule 472 recently filed by FINRA
and approved by the Commission.
Background
On July 30, 2007, FINRA’s
predecessor, the National Association of
Securities Dealers, Inc. (‘‘NASD’’), and
NYSE Regulation, Inc. (‘‘NYSER’’)
consolidated their member firm
regulation operations into a combined
organization, FINRA. Pursuant to Rule
17d–2 under the Act, NYSE, NYSER and
FINRA entered into an agreement (the
‘‘Agreement’’) to reduce regulatory
duplication for their members by
allocating to FINRA certain regulatory
6 Amendment No. 1 removed unnecessary
language regarding the operative date of the
proposed rule change.
7 See Securities Exchange Act Release No. 59096
(December 12, 2008), 73 FR 77085 (December 18,
2008) (order approving SR–FINRA–2008–044).
NYSE Alternext US LLC has submitted a
companion rule filing to conform its corresponding
Rule 472–NYSE Alternext Equities to the changes
proposed in this filing. See SR–NYSEALTR 2009–
10, submitted February 5, 2009).
VerDate Nov<24>2008
15:08 Mar 03, 2009
Jkt 217001
responsibilities for certain NYSE rules
and rule interpretations (‘‘FINRA
Incorporated NYSE Rules’’).8 As part of
its effort to reduce regulatory
duplication and relieve firms that are
members of both FINRA and the
Exchange of conflicting or unnecessary
regulatory burdens, FINRA is now
engaged in the process of reviewing and
amending the Common Rules in order to
create a consolidated FINRA rulebook.9
Proposed Conforming Amendments to
NYSE Rules
As discussed in more detail below,
FINRA amended NASD Rules 2210 and
2211 and FINRA Incorporated NYSE
Rule 472. The NYSE hereby proposes to
amend NYSE Rule 472 to conform to
FINRA Incorporated NYSE Rule 472, as
amended.
FINRA amended NASD Rules 2210
(Communications with the Public) and
2211 (Institutional Sales Material and
Correspondence) and FINRA
Incorporated NYSE Rule 472
(Communications with the Public) to
remove, in certain circumstances, the
pre-approval requirements for the use of
‘‘market letters.’’ 10
Specifically, FINRA created a new
definition of the term ‘‘market letter’’ in
NASD Rule 2211 and modified the
definition in FINRA Incorporated NYSE
Rule 472 to mean any communication
specifically excepted from the definition
of ‘‘research report’’ under NASD Rule
2711(a)(9)(A) and FINRA Incorporated
NYSE Rule 472.10(2)(a). In addition,
FINRA amended the definition of ‘‘sales
literature’’ in NASD Rule 2210 to
exclude market letters. FINRA also
amended FINRA Incorporated NYSE
Rule 472 to eliminate the requirement
that a qualified person approve market
letters in advance of distribution.
Finally, FINRA amended the definition
of ‘‘correspondence’’ in NASD Rule
2211 to include market letters (as well
8 See Securities Exchange Act Release No. 56148
(July 26, 2007), 72 FR 42146 (August 1, 2007) (order
approving the Agreement) and Securities Exchange
Act Release No. 56147 (July 26, 2007), 72 FR 42166
(August 1, 2007) (SR–NASD–2007–054) (order
approving the incorporation of certain NYSE Rules
as ‘‘Common Rules’’). Paragraph 2(b) of the 17d–2
Agreement sets forth procedures regarding
proposed changes by either NYSE or FINRA to the
substance of any of the Common Rules.
9 FINRA’s rulebook currently has three sets of
rules: (1) NASD Rules, (2) FINRA Incorporated
NYSE Rules, and (3) consolidated FINRA Rules.
The FINRA Incorporated NYSE Rules apply only to
those members of FINRA that are also members of
the NYSE (‘‘Dual Members’’), while the
consolidated FINRA Rules apply to all FINRA
members. For more information about the FINRA
rulebook consolidation process, see FINRA
Information Notice, March 12, 2008.
10 See Securities Exchange Act Release No. 59096
(December 12, 2008), 73 FR 77085 (December 18,
2008).
PO 00000
Frm 00079
Fmt 4703
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as any written letter or electronic mail
message) distributed by a member to
one or more of its existing retail
customers and fewer than 25
prospective retail customers within any
30 calendar-day period.
The Exchange correspondingly
proposes to amend NYSE Rule 472 to
conform to FINRA’s approved
amendments to the incorporated version
of the Rule. Under the proposed
amended NYSE Rule 472, members and
member organizations would be
permitted to distribute ‘‘market letters,’’
as redefined, to customers and the
public without obtaining prior approval
by a supervisory analyst or qualified
person. As defined under the proposed
amendments, ‘‘market letters’’ would
comprise any communication that is
excepted from the definition of
‘‘research report’’ contained in NYSE
Rule 472.10(2)(a). As communications
with the public, market letters remain
subject to the supervision and review
requirements of NYSE Rule 342.17,
which require each member and
member organization to establish
written policies and procedures that are
appropriate for their business, size,
structure and customers for the review
of such communications.11
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,12 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,13 in particular, in that they
are designed to prevent fraudulent and
manipulative acts and practices, 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
proposed rule change also supports the
principles of Section 11A(a)(1) 14 of the
Act in that it seeks to ensure the
economically efficient execution of
securities transactions and fair
competition among brokers and dealers
and among exchange markets.
In particular, the Exchange believes
that the proposed rule change supports
the objectives of the Act by providing
greater harmonization between NYSE
Rules and FINRA Rules (including
Common Rules) of similar purpose,
resulting in less burdensome and more
11 FINRA has proposed to amend the current
requirements governing the supervision and review
of correspondence, including FINRA Incorporated
NYSE Rule 342.17 and NASD Rule 3010. See
Regulatory Notice 08–24 (May 2008).
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(5).
14 15 U.S.C. 78k–1(a)(1).
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Federal Register / Vol. 74, No. 41 / Wednesday, March 4, 2009 / Notices
efficient regulatory compliance for Dual
Members.
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
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange believes that the
proposal qualifies for immediate
effectiveness upon filing as a noncontroversial rule change in accordance
with Section 19(b)(3)(A) of the Act 15
and Rule 19b–4(f)(6) 16 thereunder. The
Exchange asserts that the proposed rule
change (i) Will not significantly affect
the protection of investors or the public
interest, (ii) will not impose any
significant burden on competition, and
(iii) by its terms, will not become
operative for 30 days after the date of
this filing, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest. In
addition, the Exchange provided the
Commission with written notice of its
intent to file the proposed rule change,
along with a brief description and text
of the proposed rule change, at least five
business days prior to the date of filing.
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule19b–4(f)(6)(iii),17 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Exchange believes the waiver
of this period will allow it to conform
its rule to the FINRA NYSE
Incorporated Rule without delay and
ensure that there is no regulatory gap
among those rules. The Commission has
determined that waiving the 30-day
operative delay of the Exchange’s
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–2009–14 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Securities and
Exchange Commission, 100 F Street,
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSE–2009–14. 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
purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
17 17 CFR 240.19b–4(f)(6)(iii).
16 17
15:08 Mar 03, 2009
IV. Solicitation of Comments
18 For
15 15
VerDate Nov<24>2008
proposal is consistent with the
protection of investors and the public
interest because such waiver will allow
the Exchange to promptly conform its
rules to the FINRA NYSE Incorporated
Rule and ensure elimination of any
potential regulatory gap.18 Therefore,
the Commission designates the proposal
as operative upon filing. 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 furtherance of the purposes of the
Act.
Jkt 217001
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9461
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
DC 20549–1090. Copies of the filing will
also be available for inspection and
copying at the NYSE’s principal office
and on its Internet Web site at https://
www.nyse.com. 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–NYSE–
2009–14 and should be submitted on or
before March 25, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–4557 Filed 3–3–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59454; File No. SR–
NYSEALTR–2009–17]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by NYSE
Alternext U.S. LLC To Delete Certain
Rules Governing the Trading of Listed
Options
February 25, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on February
23, 2009, NYSE Alternext US LLC (the
‘‘Exchange’’ or ‘‘NYSE Alternext’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Exchange filed the proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6) thereunder,4
which renders it effective upon filing
with the Commission. 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 delete old
rules governing the trading of listed
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
1 15
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]]>Agencies
[Federal Register Volume 74, Number 41 (Wednesday, March 4, 2009)]
[Notices]
[Pages 9459-9461]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-4557]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59450; File No. SR-NYSE-2009-14]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by
New York Stock Exchange LLC Amending NYSE Rule 472 (Communications With
the Public)
February 25, 2009.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on February 5, 2009, New York Stock Exchange LLC (``NYSE''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II, below, which Items have been prepared by the self-regulatory
organization. The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \4\ and Rule 19b-4(f)(6) thereunder.\5\
NYSE filed Amendment No. 1 to the proposed
[[Page 9460]]
rule change on February 12, 2009.\6\ The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C.78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
\4\ 15 U.S.C. 78s(b)(3)(A)(iii).
\5\ 17 CFR 240.19b-4(f)(6).
\6\ Amendment No. 1 removed unnecessary language regarding the
operative date of the proposed rule change.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend NYSE Rule 472 to conform with
amendments to corresponding FINRA Incorporated NYSE Rule 472 (defined
below) recently filed by the Financial Industry Regulatory Authority,
Inc. (``FINRA'') and approved by the Commission.\7\
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 59096 (December 12,
2008), 73 FR 77085 (December 18, 2008) (order approving SR-FINRA-
2008-044). NYSE Alternext US LLC has submitted a companion rule
filing to conform its corresponding Rule 472-NYSE Alternext Equities
to the changes proposed in this filing. See SR-NYSEALTR 2009-10,
submitted February 5, 2009).
---------------------------------------------------------------------------
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 self-regulatory organization
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 those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to amend NYSE Rule 472
to conform with amendments to corresponding FINRA Incorporated NYSE
Rule 472 recently filed by FINRA and approved by the Commission.
Background
On July 30, 2007, FINRA's predecessor, the National Association of
Securities Dealers, Inc. (``NASD''), and NYSE Regulation, Inc.
(``NYSER'') consolidated their member firm regulation operations into a
combined organization, FINRA. Pursuant to Rule 17d-2 under the Act,
NYSE, NYSER and FINRA entered into an agreement (the ``Agreement'') to
reduce regulatory duplication for their members by allocating to FINRA
certain regulatory responsibilities for certain NYSE rules and rule
interpretations (``FINRA Incorporated NYSE Rules'').\8\ As part of its
effort to reduce regulatory duplication and relieve firms that are
members of both FINRA and the Exchange of conflicting or unnecessary
regulatory burdens, FINRA is now engaged in the process of reviewing
and amending the Common Rules in order to create a consolidated FINRA
rulebook.\9\
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 56148 (July 26,
2007), 72 FR 42146 (August 1, 2007) (order approving the Agreement)
and Securities Exchange Act Release No. 56147 (July 26, 2007), 72 FR
42166 (August 1, 2007) (SR-NASD-2007-054) (order approving the
incorporation of certain NYSE Rules as ``Common Rules''). Paragraph
2(b) of the 17d-2 Agreement sets forth procedures regarding proposed
changes by either NYSE or FINRA to the substance of any of the
Common Rules.
\9\ FINRA's rulebook currently has three sets of rules: (1) NASD
Rules, (2) FINRA Incorporated NYSE Rules, and (3) consolidated FINRA
Rules. The FINRA Incorporated NYSE Rules apply only to those members
of FINRA that are also members of the NYSE (``Dual Members''), while
the consolidated FINRA Rules apply to all FINRA members. For more
information about the FINRA rulebook consolidation process, see
FINRA Information Notice, March 12, 2008.
---------------------------------------------------------------------------
Proposed Conforming Amendments to NYSE Rules
As discussed in more detail below, FINRA amended NASD Rules 2210
and 2211 and FINRA Incorporated NYSE Rule 472. The NYSE hereby proposes
to amend NYSE Rule 472 to conform to FINRA Incorporated NYSE Rule 472,
as amended.
FINRA amended NASD Rules 2210 (Communications with the Public) and
2211 (Institutional Sales Material and Correspondence) and FINRA
Incorporated NYSE Rule 472 (Communications with the Public) to remove,
in certain circumstances, the pre-approval requirements for the use of
``market letters.'' \10\
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 59096 (December 12,
2008), 73 FR 77085 (December 18, 2008).
---------------------------------------------------------------------------
Specifically, FINRA created a new definition of the term ``market
letter'' in NASD Rule 2211 and modified the definition in FINRA
Incorporated NYSE Rule 472 to mean any communication specifically
excepted from the definition of ``research report'' under NASD Rule
2711(a)(9)(A) and FINRA Incorporated NYSE Rule 472.10(2)(a). In
addition, FINRA amended the definition of ``sales literature'' in NASD
Rule 2210 to exclude market letters. FINRA also amended FINRA
Incorporated NYSE Rule 472 to eliminate the requirement that a
qualified person approve market letters in advance of distribution.
Finally, FINRA amended the definition of ``correspondence'' in NASD
Rule 2211 to include market letters (as well as any written letter or
electronic mail message) distributed by a member to one or more of its
existing retail customers and fewer than 25 prospective retail
customers within any 30 calendar-day period.
The Exchange correspondingly proposes to amend NYSE Rule 472 to
conform to FINRA's approved amendments to the incorporated version of
the Rule. Under the proposed amended NYSE Rule 472, members and member
organizations would be permitted to distribute ``market letters,'' as
redefined, to customers and the public without obtaining prior approval
by a supervisory analyst or qualified person. As defined under the
proposed amendments, ``market letters'' would comprise any
communication that is excepted from the definition of ``research
report'' contained in NYSE Rule 472.10(2)(a). As communications with
the public, market letters remain subject to the supervision and review
requirements of NYSE Rule 342.17, which require each member and member
organization to establish written policies and procedures that are
appropriate for their business, size, structure and customers for the
review of such communications.\11\
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\11\ FINRA has proposed to amend the current requirements
governing the supervision and review of correspondence, including
FINRA Incorporated NYSE Rule 342.17 and NASD Rule 3010. See
Regulatory Notice 08-24 (May 2008).
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\12\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\13\ in particular, in that
they are designed to prevent fraudulent and manipulative acts and
practices, 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 proposed rule change also supports the principles
of Section 11A(a)(1) \14\ of the Act in that it seeks to ensure the
economically efficient execution of securities transactions and fair
competition among brokers and dealers and among exchange markets.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
\14\ 15 U.S.C. 78k-1(a)(1).
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In particular, the Exchange believes that the proposed rule change
supports the objectives of the Act by providing greater harmonization
between NYSE Rules and FINRA Rules (including Common Rules) of similar
purpose, resulting in less burdensome and more
[[Page 9461]]
efficient regulatory compliance for Dual Members.
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
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange believes that the proposal qualifies for immediate
effectiveness upon filing as a non-controversial rule change in
accordance with Section 19(b)(3)(A) of the Act \15\ and Rule 19b-
4(f)(6) \16\ thereunder. The Exchange asserts that the proposed rule
change (i) Will not significantly affect the protection of investors or
the public interest, (ii) will not impose any significant burden on
competition, and (iii) by its terms, will not become operative for 30
days after the date of this filing, or such shorter time as the
Commission may designate, if consistent with the protection of
investors and the public interest. In addition, the Exchange provided
the Commission with written notice of its intent to file the proposed
rule change, along with a brief description and text of the proposed
rule change, at least five business days prior to the date of filing.
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of the filing.
However, pursuant to Rule19b-4(f)(6)(iii),\17\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Exchange believes the
waiver of this period will allow it to conform its rule to the FINRA
NYSE Incorporated Rule without delay and ensure that there is no
regulatory gap among those rules. The Commission has determined that
waiving the 30-day operative delay of the Exchange's proposal is
consistent with the protection of investors and the public interest
because such waiver will allow the Exchange to promptly conform its
rules to the FINRA NYSE Incorporated Rule and ensure elimination of any
potential regulatory gap.\18\ Therefore, the Commission designates the
proposal as operative upon filing. 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 furtherance of the purposes of
the Act.
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\17\ 17 CFR 240.19b-4(f)(6)(iii).
\18\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSE-2009-14 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Securities and Exchange Commission, 100 F Street, NE., Washington, DC
20549-1090.
All submissions should refer to File Number SR-NYSE-2009-14. 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 20549-1090. Copies of the filing will also be available
for inspection and copying at the NYSE's principal office and on its
Internet Web site at https://www.nyse.com. 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-NYSE-2009-14 and should be submitted on
or before March 25, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-4557 Filed 3-3-09; 8:45 am]
BILLING CODE 8011-01-P
