Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change by NYSE Amex LLC Amending NYSE Amex Equities Rule 2 To Redefine the Term “Member Organization”, 36799-36801 [E9-17629]
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Federal Register / Vol. 74, No. 141 / Friday, July 24, 2009 / Notices
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60317; File No. SR–
NYSEAmex–2009–36]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of a Proposed Rule Change by NYSE
All submissions should refer to File
Amex LLC Amending NYSE Amex
Number SR–NYSE–2009–63. This file
Equities Rule 2 To Redefine the Term
number should be included on the
subject line if e-mail is used. To help the ‘‘Member Organization’’
Commission process and review your
July 16, 2009.
comments more efficiently, please use
Pursuant to Section 19(b)(1) of the
only one method. The Commission will Securities Exchange Act of 1934
post all comments on the Commission’s (‘‘Act’’) 1, and Rule 19b–4 2 thereunder,
notice is hereby given that on June 30,
Internet Web site (https://www.sec.gov/
2009, NYSE Amex LLC (‘‘NYSE Amex’’
rules/sro.shtml). Copies of the
or ‘‘Exchange’’) filed with the Securities
submission, all subsequent
and Exchange Commission
amendments, all written statements
(‘‘Commission’’) the proposed rule
with respect to the proposed rule
change as described in Items I and II
change that are filed with the
below, which Items have been prepared
Commission, and all written
by the self-regulatory organization. The
communications relating to the
Commission is publishing this notice to
proposed rule change between the
solicit comments on the proposed rule
Commission and any person, other than
change from interested persons.
those that may be withheld from the
I. Self-Regulatory Organization’s
public in accordance with the
Statement of the Terms of Substance of
provisions of 5 U.S.C. 552, will be
the Proposed Rule Change
available for inspection and copying in
the Commission’s Public Reference
The Exchange proposes to amend
Room, 100 F Street, NE., Washington,
NYSE Amex Equities Rule 2 to redefine
DC 20549, on official business days
the term ‘‘member organization.’’ The
between the hours of 10 a.m. and 3 p.m. text of the proposed rule change is
Copies of the filing also will be available available at the Exchange, the
Commission’s Public Reference Room,
for inspection and copying at the
and https://www.nyse.com.
principal office of the Exchange. All
comments received will be posted
II. Self-Regulatory Organization’s
without change; the Commission does
Statement of the Purpose of, and
not edit personal identifying
Statutory Basis for, the Proposed Rule
information from submissions. You
Change
should submit only information that
In its filing with the Commission, the
you wish to make available publicly. All self-regulatory organization included
submissions should refer to File
statements concerning the purpose of,
Number SR–NYSE–2009–63 and should and basis for, the proposed rule change
be submitted on or before August 14,
and discussed any comments it received
2009.
on the proposed rule change. The text
of those statements may be examined at
For the Commission, by the Division of
the places specified in Item IV below.
Trading and Markets, pursuant to delegated
The Exchange has prepared summaries,
authority.14
set forth in sections A, B, and C below,
Florence E. Harmon,
of the most significant parts of such
Deputy Secretary.
statements.
[FR Doc. E9–17630 Filed 7–23–09; 8:45 am]
srobinson on DSKHWCL6B1PROD with NOTICES
BILLING CODE 8010–01–P
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange is proposing to amend
its rules to broaden the definition of a
‘‘member organization’’ to include a
registered broker or dealer that is not a
member of the Financial Industry
1 15
14 17
CFR 200.30–3(a)(12).
VerDate Nov<24>2008
18:55 Jul 23, 2009
2 17
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PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00151
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Sfmt 4703
36799
Regulatory Authority (‘‘FINRA’’) so long
as the broker or dealer is a member of
another registered securities exchange.
However, member organizations that
transact business with public customers
or conduct business on the Floor of the
Exchange must at all times be members
of FINRA. The revised definition as
proposed is consistent with the rules of
other national securities exchanges that
have been approved by the
Commission.3
Under current NYSE Amex Equities
Rule 2(b)(i), a registered broker or dealer
must be a member of FINRA in order to
qualify as a ‘‘member organization’’ of
the Exchange and to be eligible for an
NYSE Amex equities trading license.
Under this arrangement, FINRA is the
DEA for all NYSE Amex equities
member organizations. Similarly, NYSE
Amex Equities Rule 2(b)(ii) provides
that a registered broker or dealer can
become a member organization, even
though it does not own an NYSE Amex
equities trading license, if it agrees to be
regulated as such by the Exchange, but
only if it is a member of FINRA. The
Exchange proposes to make membership
more broadly available to other
registered brokers or dealers who are not
FINRA members but who are members
of another registered securities exchange
and do not transact business with public
customers or conduct business on the
Floor of the Exchange. The Exchange
believes that this change can be made
without any sacrifice of regulatory rigor.
Under the proposed rule change,
those NYSE Amex equities member
organizations that are also members of
FINRA will be regulated pursuant to the
terms of an allocation plan pursuant to
Rule 17d–2 of the Act among FINRA,
New York Stock Exchange LLC
(‘‘NYSE’’), NYSE Amex, and NYSE
Regulation, Inc. (‘‘NYSE Regulation’’),
3 As part of the relocation of NYSE Amex equities
trading to trading systems and facilities located at
11 Wall Street, New York, New York, NYSE Amex
adopted NYSE Rules 1–1004, subject to such
changes as necessary to apply the Rules to the
Exchange, as the NYSE Amex Equities Rules to
govern trading on the NYSE Amex Trading
Systems. The NYSE Amex Equities Rules, which
became operative on December 1, 2008, are
substantially identical to the current NYSE Rules
1–1004 and the Exchange continues to update the
NYSE Amex Equities Rules as necessary to conform
with rule changes to corresponding NYSE Rules
filed by the New York Stock Exchange LLC
(‘‘NYSE’’). See Securities Exchange Act Release
Nos. 58705 (Oct. 1, 2008), 73 FR 58995 (Oct. 8,
2008) (SR–Amex–2008–63); 58833 (Oct. 22, 2008),
73 FR 64642 (Oct. 30, 2008) (SR–NYSE–2008–106);
58839 (Oct. 23, 2008), 73 FR 64645 (Oct. 30, 2008)
(SR–NYSEALTR–2008–03); 59022 (Nov. 26, 2008),
73 FR 73683 (Dec. 3, 2008) (SR–NYSEALTR–2008–
10); and 59027 (Nov. 28, 2008), 73 FR 73681 (Dec.
3, 2008) (SR–NYSEALTR–2008–11). The Exchange
is filing this rule proposal as a companion filing to
a rule proposal filed by the NYSE. See SR–NYSE–
2009–63.
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Federal Register / Vol. 74, No. 141 / Friday, July 24, 2009 / Notices
srobinson on DSKHWCL6B1PROD with NOTICES
and FINRA will continue to be the DEA
for these member organizations. For
those NYSE Amex equities member
organizations that are not members of
FINRA, but are members of another
registered securities exchange, NYSE
Regulation will provide for the exercise
of certain of its regulatory
responsibilities with respect to these
member organizations pursuant to an
existing regulatory services agreement
among NYSE, NYSE Amex, NYSE
Regulation, and FINRA.
The Exchange believes that the
proposed rule change is consistent with
the rules of other registered national
securities exchanges that have
previously been approved by the
Commission. For example, the rules of
BATS Exchange, Inc. (‘‘BATS’’) provide
that ‘‘any registered broker or dealer
which is a member of another registered
national securities exchange or
association or any person associated
with such a registered broker or dealer
shall be eligible’’ to be a member of that
exchange.4 Stated otherwise, to be
eligible for BATS membership, a firm
must be a member of either FINRA or
another registered national securities
exchange. Similarly, the rules of
National Stock Exchange, Inc. (‘‘NSX’’)
contain no requirement for FINRA
membership in its eligibility
requirements and restrictions applicable
to a registered broker or dealer that
seeks to become an ETP Holder on that
Exchange.5
Finally, the rules of The NASDAQ
Stock Market LLC (‘‘Nasdaq’’) provide
for membership in Nasdaq of a
registered broker or dealer that is either
a member of FINRA or a member of
another registered securities exchange,
with the additional requirement (also
being proposed herein by the Exchange)
that ‘‘Nasdaq members that transact
business with customers shall at all
times be members of FINRA.’’ 6 The
term ‘‘customers’’ in the foregoing
sentence refers to public customers and
does not include brokers or dealers.7
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) 8 of the Act,
in general, and furthers the objectives of
Section 6(b)(5) 9 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
4 See
BATS Rule 2.3.
NSX Rules 2.3 and 2.4.
6 See Nasdaq Rule 1002(e). See also Nasdaq Rule
1014(a)(3).
7 See Nasdaq Rule 0120(g).
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
5 See
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18:55 Jul 23, 2009
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coordination with persons engaged in
facilitating transactions in securities, 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. More specifically, the
Exchange believes that, by (i) expanding
the number of registered brokers and
dealers that are eligible to become NYSE
Amex equities member organizations
and trade on the Exchange, while
maintaining high regulatory standards
with respect to such firms, and (ii)
aligning NYSE Amex equities
membership requirements more closely
with those of other registered securities
exchanges, the proposed rule change
will contribute to perfecting the
mechanism of a free and open market
and a national market system, which
outcomes are also consistent with the
protection of 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
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
Because the foregoing 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
the filing, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, it has
become effective pursuant to 19(b)(3)(A)
of the Act 10 and Rule 19b–4(f)(6)
thereunder.11
The Exchange has requested that the
Commission waive the 30-day operative
delay so that the Exchange may expand
the number of registered brokers and
U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
PO 00000
10 15
Frm 00152
Fmt 4703
Sfmt 4703
dealers that are eligible to become NYSE
Amex member organizations and trade
on the Exchange without delay. 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
enable the Exchange to extend Exchange
membership to registered broker-dealers
that are members of other exchanges in
a manner that is consistent with the
rules of other exchanges, which
previously were approved by the
Commission.12 Therefore, the
Commission designates the proposal
operative upon filing.13
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–NYSEAmex–2009–36 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–NYSEAmex–2009–36. 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/
12 See, e.g., Securities Exchange Act Release Nos.
58375 (August 18, 2008), 73 FR 49498 (August 21,
2008) (order approving rules of BATs Exchange);
53128 (January 13, 2006), 71 FR 3550 (January 23,
2006) (order approving rules of the Nasdaq Stock
Market LLC).
13 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).
E:\FR\FM\24JYN1.SGM
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Federal Register / Vol. 74, No. 141 / Friday, July 24, 2009 / Notices
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 the 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–NYSEAmex–2009–36 and
should be submitted on or before
August 14, 2009.
proposal as a ‘‘non-controversial’’
proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b-4(f)(6) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–17629 Filed 7–23–09; 8:45 am]
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.
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60316; File No. SR–CBOE–
2009–050]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Immediately Add New
FAZ and FAS Option Series Within Five
Days of Expiration
srobinson on DSKHWCL6B1PROD with NOTICES
July 16, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 15,
2009, the Chicago Board Options
Exchange, Incorporated (‘‘Exchange’’ or
‘‘CBOE’’) 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 Exchange. The Exchange filed the
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
CBOE is seeking to immediately list
new option series on Direxion Daily
Financial Bear 3X Shares (‘‘FAZ’’) and
on Direxion Daily Financial Bull 3X
Shares (‘‘FAS’’) that expire this Friday,
July 17, 2009, notwithstanding
Interpretation and Policy .04 to Rule 5.5,
Series of Option Contracts Open for
Trading. The Exchange is not proposing
any rule text changes. The Exchange is
not proposing any rule text changes.[sic]
Although the proposed rule change
would not amend the text of Rule
5.5.04, the proposed change would have
the effect of permitting the Exchange to
immediately add new series of FAZ and
FAS options within five business days
prior to expiration on Friday, July 17,
2009.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this proposed rule
change is to allow the Exchange to
immediately list new option series on
FAZ and FAS that expire this Friday,
July 17, 2009, notwithstanding
Interpretation and Policy .04 to Rule 5.5,
Series of Option Contracts Open for
Trading. CBOE Rule 5.5.04 permits the
Exchange to list new series of options
until the beginning of the month in
which the option contract will expire.
Due to unusual market conditions,
CBOE, in its discretion, may add new
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
VerDate Nov<24>2008
18:55 Jul 23, 2009
series of options until five business days
prior to expiration.
On July 14, 2009, NASDAQ OMX
PHLX listed additional series on FAZ
that expire on July 17, 2009, and on July
15, 2009, NASDAQ OMX PHLX listed
additional series on FAS that expire on
July 17, 2009. Specifically, NASDAQ
OMX PHLX listed July 2009 options on
FAZ with the following strikes: 35, 36,
37, 38, 39, 40, 41, 42, 43 and 44, and
NASDAQ OMX PHLX listed July 2009
options on FAS with the following
strikes: 25, 26, 27 and 28. NASDAQ
OMX PHLX does not have restrictions
pertaining to the timing of adding new
series. See NASDAQ OMX PHLX Rules
1012, Series of Options Open for
Trading, and 1101A, Terms of Option
Contracts. However, under CBOE’s
existing rules, the Exchange is not
permitted to add these same series. As
a result, the Exchange has submitted
this current filing seeking to
immediately list the same series listed
by NASDAQ OMX PHLX on July 14 and
15, 2009. To the extent any additional
series are added by NASDAQ OMX
PHLX between the time this filing is
submitted and Friday, July 17, 2009, the
Exchange similarly seeks to
immediately list such same series.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the Act 5
and the rules and regulations
thereunder and, in particular, the
requirements of Section 6(b) of the Act.6
Specifically, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5)7 requirements that
the rules of an exchange be designed to
promote just and equitable principles of
trade, to prevent fraudulent and
manipulative acts, to remove
impediments to and to perfect the
mechanism for a free and open market
and a national market system, and, in
general, to protect investors and the
public interest. The Exchange believes
adding the new FAZ and FAS series
will foster competition and benefit
investors.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CBOE does not believe that the
proposed rule change will impose any
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Act.
5 15
1 15
3 15
U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
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36801
U.S.C. 78s(b)(1).
U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
6 15
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]]>Agencies
[Federal Register Volume 74, Number 141 (Friday, July 24, 2009)]
[Notices]
[Pages 36799-36801]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-17629]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-60317; File No. SR-NYSEAmex-2009-36]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change by NYSE Amex LLC Amending NYSE
Amex Equities Rule 2 To Redefine the Term ``Member Organization''
July 16, 2009.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby given
that on June 30, 2009, NYSE Amex LLC (``NYSE Amex'' or ``Exchange'')
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 self-regulatory organization. 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 Amex Equities Rule 2 to
redefine the term ``member organization.'' 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 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing to amend its rules to broaden the
definition of a ``member organization'' to include a registered broker
or dealer that is not a member of the Financial Industry Regulatory
Authority (``FINRA'') so long as the broker or dealer is a member of
another registered securities exchange. However, member organizations
that transact business with public customers or conduct business on the
Floor of the Exchange must at all times be members of FINRA. The
revised definition as proposed is consistent with the rules of other
national securities exchanges that have been approved by the
Commission.\3\
---------------------------------------------------------------------------
\3\ As part of the relocation of NYSE Amex equities trading to
trading systems and facilities located at 11 Wall Street, New York,
New York, NYSE Amex adopted NYSE Rules 1-1004, subject to such
changes as necessary to apply the Rules to the Exchange, as the NYSE
Amex Equities Rules to govern trading on the NYSE Amex Trading
Systems. The NYSE Amex Equities Rules, which became operative on
December 1, 2008, are substantially identical to the current NYSE
Rules 1-1004 and the Exchange continues to update the NYSE Amex
Equities Rules as necessary to conform with rule changes to
corresponding NYSE Rules filed by the New York Stock Exchange LLC
(``NYSE''). See Securities Exchange Act Release Nos. 58705 (Oct. 1,
2008), 73 FR 58995 (Oct. 8, 2008) (SR-Amex-2008-63); 58833 (Oct. 22,
2008), 73 FR 64642 (Oct. 30, 2008) (SR-NYSE-2008-106); 58839 (Oct.
23, 2008), 73 FR 64645 (Oct. 30, 2008) (SR-NYSEALTR-2008-03); 59022
(Nov. 26, 2008), 73 FR 73683 (Dec. 3, 2008) (SR-NYSEALTR-2008-10);
and 59027 (Nov. 28, 2008), 73 FR 73681 (Dec. 3, 2008) (SR-NYSEALTR-
2008-11). The Exchange is filing this rule proposal as a companion
filing to a rule proposal filed by the NYSE. See SR-NYSE-2009-63.
---------------------------------------------------------------------------
Under current NYSE Amex Equities Rule 2(b)(i), a registered broker
or dealer must be a member of FINRA in order to qualify as a ``member
organization'' of the Exchange and to be eligible for an NYSE Amex
equities trading license. Under this arrangement, FINRA is the DEA for
all NYSE Amex equities member organizations. Similarly, NYSE Amex
Equities Rule 2(b)(ii) provides that a registered broker or dealer can
become a member organization, even though it does not own an NYSE Amex
equities trading license, if it agrees to be regulated as such by the
Exchange, but only if it is a member of FINRA. The Exchange proposes to
make membership more broadly available to other registered brokers or
dealers who are not FINRA members but who are members of another
registered securities exchange and do not transact business with public
customers or conduct business on the Floor of the Exchange. The
Exchange believes that this change can be made without any sacrifice of
regulatory rigor.
Under the proposed rule change, those NYSE Amex equities member
organizations that are also members of FINRA will be regulated pursuant
to the terms of an allocation plan pursuant to Rule 17d-2 of the Act
among FINRA, New York Stock Exchange LLC (``NYSE''), NYSE Amex, and
NYSE Regulation, Inc. (``NYSE Regulation''),
[[Page 36800]]
and FINRA will continue to be the DEA for these member organizations.
For those NYSE Amex equities member organizations that are not members
of FINRA, but are members of another registered securities exchange,
NYSE Regulation will provide for the exercise of certain of its
regulatory responsibilities with respect to these member organizations
pursuant to an existing regulatory services agreement among NYSE, NYSE
Amex, NYSE Regulation, and FINRA.
The Exchange believes that the proposed rule change is consistent
with the rules of other registered national securities exchanges that
have previously been approved by the Commission. For example, the rules
of BATS Exchange, Inc. (``BATS'') provide that ``any registered broker
or dealer which is a member of another registered national securities
exchange or association or any person associated with such a registered
broker or dealer shall be eligible'' to be a member of that
exchange.\4\ Stated otherwise, to be eligible for BATS membership, a
firm must be a member of either FINRA or another registered national
securities exchange. Similarly, the rules of National Stock Exchange,
Inc. (``NSX'') contain no requirement for FINRA membership in its
eligibility requirements and restrictions applicable to a registered
broker or dealer that seeks to become an ETP Holder on that
Exchange.\5\
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\4\ See BATS Rule 2.3.
\5\ See NSX Rules 2.3 and 2.4.
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Finally, the rules of The NASDAQ Stock Market LLC (``Nasdaq'')
provide for membership in Nasdaq of a registered broker or dealer that
is either a member of FINRA or a member of another registered
securities exchange, with the additional requirement (also being
proposed herein by the Exchange) that ``Nasdaq members that transact
business with customers shall at all times be members of FINRA.'' \6\
The term ``customers'' in the foregoing sentence refers to public
customers and does not include brokers or dealers.\7\
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\6\ See Nasdaq Rule 1002(e). See also Nasdaq Rule 1014(a)(3).
\7\ See Nasdaq Rule 0120(g).
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \8\ of the
Act, in general, and furthers the objectives of Section 6(b)(5) \9\ 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, 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. More specifically, the Exchange believes that, by (i)
expanding the number of registered brokers and dealers that are
eligible to become NYSE Amex equities member organizations and trade on
the Exchange, while maintaining high regulatory standards with respect
to such firms, and (ii) aligning NYSE Amex equities membership
requirements more closely with those of other registered securities
exchanges, the proposed rule change will contribute to perfecting the
mechanism of a free and open market and a national market system, which
outcomes are also consistent with the protection of investors and the
public interest.
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\8\ 15 U.S.C. 78f(b).
\9\ 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
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
Because the foregoing 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 the filing, or such
shorter time as the Commission may designate, if consistent with the
protection of investors and the public interest, it has become
effective pursuant to 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6)
thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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The Exchange has requested that the Commission waive the 30-day
operative delay so that the Exchange may expand the number of
registered brokers and dealers that are eligible to become NYSE Amex
member organizations and trade on the Exchange without delay. 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 enable the Exchange to
extend Exchange membership to registered broker-dealers that are
members of other exchanges in a manner that is consistent with the
rules of other exchanges, which previously were approved by the
Commission.\12\ Therefore, the Commission designates the proposal
operative upon filing.\13\
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\12\ See, e.g., Securities Exchange Act Release Nos. 58375
(August 18, 2008), 73 FR 49498 (August 21, 2008) (order approving
rules of BATs Exchange); 53128 (January 13, 2006), 71 FR 3550
(January 23, 2006) (order approving rules of the Nasdaq Stock Market
LLC).
\13\ 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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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 rule-comments@sec.gov. Please include
File Number SR-NYSEAmex-2009-36 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-NYSEAmex-2009-36. 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/
[[Page 36801]]
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 the 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-NYSEAmex-2009-36 and should
be submitted on or before August 14, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-17629 Filed 7-23-09; 8:45 am]
BILLING CODE 8010-01-P
