Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change by New York Stock Exchange LLC Adopting NYSE Rule 406 as New Rule 3250 To Correspond With a Rule Change Recently Filed by the Financial Industry Regulatory Authority, Inc., 42717-42719 [E9-20196]
Download as PDF
<![CDATA[
Federal Register / Vol. 74, No. 162 / Monday, August 24, 2009 / Notices
correlated more closely with the level of
risk associated with IDB positions.
(B) Self-Regulatory Organization’s
Statement on Burden on Competition
FICC does not believe that the
proposed rule change will have any
impact or impose any burden on
competition.
Written comments relating to the
proposed rule change have not yet been
solicited or received. FICC will notify
the Commission of any written
comments received by FICC.
erowe on DSK5CLS3C1PROD with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Commission finds that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder and
particularly with the requirements of
Section 17A(b)(3)(F).8 Section
17A(b)(3)(F) requires that the rules of a
clearing agency remove impediments to
and perfect the mechanism of a national
system for the prompt and accurate
clearance and settlement of securities
transactions and protect investors and
the public interest. The Commission
finds that the approval of FICC’s rule
change is consistent with this section
because it will allow FICC to modify its
rules regarding the calculation of
clearing fund deposits on inter-dealer
broker positions to correlate more
closely those deposits with the level of
risk associated with such positions.
FICC has requested that the
Commission approve the proposed rule
prior to the thirtieth day after
publication of the notice of the amended
filing. The Commission finds good
cause for approving the proposed rule
change prior to the thirtieth day after
the publication of notice because such
approval will allow FICC to better
correlate inter-dealer broker clearing
fund deposits with the level of risk
associated with their positions
immediately.
The Commission is approving the
proposed rule filing on a temporary
basis through August 20, 2010, so that
FICC will have time to evaluate the
modified calculation of clearing fund
deposits on inter-dealer broker positions
and to report its findings to the
Commission before the Commission
decides on permanent approval.
8 U.S.C.
78q–1(b)(3)(F).
VerDate Nov<24>2008
15:04 Aug 21, 2009
Jkt 217001
IV. Solicitation of Comments
V. Conclusion
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:
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,9 that the
proposed rule change (File No. SR–
FICC–2009–08) be and hereby is
approved on an accelerated basis
through August 20, 2010.10
Electronic Comments
(C) Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
42717
• 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–FICC–2009–08 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.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.11
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–20197 Filed 8–21–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60512; File No. SR–NYSE–
2009–75]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change by New York
Stock Exchange LLC Adopting NYSE
All submissions should refer to File
Rule 406 as New Rule 3250 To
Number SR–FICC–2009–08. This file
Correspond With a Rule Change
number should be included on the
Recently Filed by the Financial
subject line if e-mail is used. To help the Industry Regulatory Authority, Inc.
Commission process and review your
August 17, 2009.
comments more efficiently, please use
Pursuant to Section 19(b)(1) of the
only one method. The Commission will
post all comments on the Commission’s Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
Internet Web site (https://www.sec.gov/
notice is hereby given that on July 28,
rules/sro.shtml). Copies of the
2009, New York Stock Exchange LLC
submission, all subsequent
(‘‘NYSE’’ or the ‘‘Exchange’’) filed with
amendments, all written statements
the Securities and Exchange
with respect to the proposed rule
Commission (the ‘‘Commission’’) the
change that are filed with the
proposed rule change as described in
Commission, and all written
Items I and II below, which Items have
communications relating to the
been substantially prepared by the selfproposed rule change between the
Commission and any person, other than regulatory organization. The Exchange
has designated this proposal eligible for
those that may be withheld from the
immediate effectiveness pursuant to
public in accordance with the
Section 19(b)(3)(A) of the Act 3 and Rule
provisions of 5 U.S.C. 552, will be
19b–4(f)(6) thereunder.4 The
available for inspection and copying in
Commission is publishing this notice to
the Commission’s Public Reference
solicit comments on the proposed rule
Section, 100 F Street, NE., Washington,
change from interested persons.
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m. I. Self-Regulatory Organization’s
Copies of such filings also will be
Statement of the Terms of Substance of
available for inspection and copying at
the Proposed Rule Change
the principal office of FICC and on
The Exchange proposes to adopt
FICC’s Web site at https://www.dtcc.com/
downloads/legal/rule_filings/2009/ficc/ NYSE Rule 406 (Designation of
Accounts) as new Rule 3250 to
2009-08.pdf. All comments received
will be posted without change; the
9 15 U.S.C. 78s(b)(2).
Commission does not edit personal
10 In approving the proposed rule change, the
identifying information from
Commission considered the proposal’s impact on
efficiency, competition, and capital formation. 15
submissions. You should submit only
U.S.C. 78c(f).
information that you wish to make
11 17 CFR 200.30–3(a)(12).
available publicly. All submissions
1 15 U.S.C. 78s(b)(1).
should refer to File Number SR–FICC–
2 17 CFR 240.19b–4.
2009–08 and should be submitted on or
3 15 U.S.C. 78s(b)(3)(A).
before September 14, 2009.
4 17 CFR 240.19b–4(f)(6).
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
E:\FR\FM\24AUN1.SGM
24AUN1
42718
Federal Register / Vol. 74, No. 162 / Monday, August 24, 2009 / Notices
correspond with a rule change recently
filed by the Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’)
and approved by the Commission.5 The
text of the proposed rule change is
available at the Exchange, the
Commission’s Public Reference Room,
and https://www.nyse.com.
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 NASD and FINRA
Incorporated NYSE Rules in order to
create a consolidated FINRA rulebook.9
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.
Proposed Conforming Amendment to
NYSE Rules
As discussed in more detail below,
FINRA adopted FINRA Incorporated
NYSE Rule 406 (Designation of
Accounts) as consolidated FINRA Rule
3250, subject to some minor technical
changes. The NYSE hereby proposes to
adopt NYSE Rule 406 as new Rule 3250
to conform to the rule change adopted
by FINRA.10
Specifically, FINRA Incorporated
NYSE Rule 406 provides that no NYSE
member organization shall carry an
account on its books in the name of a
person other than that of the customer.
However, an account may be designated
by a number or symbol, provided the
member organization has a written
statement of ownership signed by the
customer. This Rule has been used to
address, inter alia, sales practice abuses,
including commingling of funds, failure
to disclose ownership interests in
accounts and unauthorized trading.11
FINRA adopted FINRA Incorporated
NYSE Rule 406 as consolidated FINRA
Rule 3250 because it believes the Rule
is an important enforcement tool and
should be applied to all FINRA
members and not just Dual Members. In
addition, the Rule provides customers
and their accounts with a level of
anonymity that may be useful while still
permitting identification to the member
organization carrying the account as
well as regulators. Upon adoption of
Rule 3250, FINRA made minor technical
changes to apply the Rule to all FINRA
members, replacing the terms ‘‘member
organization’’ or ‘‘organization’’ with
the term ‘‘member.’’ 12
To harmonize the NYSE Rules with
the approved FINRA Rules, the
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 adopt NYSE Rule 406
(Designation of Accounts) as new Rule
3250 to correspond with a rule change
recently filed by FINRA and approved
by the Commission.6
erowe on DSK5CLS3C1PROD with NOTICES
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,7 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
5 See Securities Exchange Act Release No. 59947
(May 20, 2009), 74 FR 25293 (May 27, 2009) (order
approving FINRA 2009–017).
6 Id.
7 17 CFR 240.17d–2.
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.
VerDate Nov<24>2008
15:04 Aug 21, 2009
Jkt 217001
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 NYSE Amex LLC has submitted a companion
rule filing to conform its corresponding NYSE
Amex Equities Rules to the changes proposed in
this filing. See SR–NYSE–Amex–2009–51, formally
submitted July 28, 2009.
11 See Securities Exchange Act Release No. 59947
(May 20, 2009), 74 FR 25293 (May 27, 2009).
12 Id.
PO 00000
Frm 00075
Fmt 4703
Sfmt 4703
Exchange correspondingly proposes to
adopt NYSE Rule 406 as new Rule 3250,
which is substantially similar to the
new FINRA Rule. As proposed, NYSE
Rule 3250 adopts the same language as
FINRA Rule 3250, except for retaining
or adding, as needed, the term ‘‘member
organization’’ and making
corresponding technical changes. As
with the consolidated FINRA Rule,
under proposed NYSE Rule 3250
Exchange member organizations will be
required to carry customer accounts in
the name of the customer, except that an
account may be designated by a number
or symbol, as long as the member
maintains documentation identifying
the customer.13
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,14 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,15 in particular, in that it is
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.
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 from the date on
which it was filed, or such shorter time
as the Commission may designate, if
13 Id. As noted by FINRA, member organizations
are subject to additional requirements regarding
customer accounts under the Act. See, e.g., 17 CFR
240.17a–3(a)(9) (requiring records indicating the
name and address of the beneficial owner of cash
and margin customer accounts).
14 15 U.S.C. 78f(b).
15 15 U.S.C. 78f(b)(5).
E:\FR\FM\24AUN1.SGM
24AUN1
Federal Register / Vol. 74, No. 162 / Monday, August 24, 2009 / Notices
consistent with the protection of
investors and the public interest, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 16 and Rule 19b–
4(f)(6) thereunder.17
The Exchange has requested that the
Commission waive the 30-day operative
delay so that the proposal may become
operative immediately upon filing. The
Commission has determined that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because such waiver will allow the
Exchange to promptly conform its rule
with the approved FINRA Rule, and will
ensure the elimination of any potential
regulatory gap and that the NYSE Rules
maintain their status as Common Rules
under the Agreement. Therefore, the
Commission designates the proposal
operative upon filing.18
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–NYSE–2009–75 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.
16 15
U.S.C. 78s(b)(3)(A).
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.
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).
erowe on DSK5CLS3C1PROD with NOTICES
17 17
VerDate Nov<24>2008
15:04 Aug 21, 2009
Jkt 217001
All submissions should refer to File
Number SR–NYSE–2009–75. 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 the filing will also be available
for inspection and copying at the
principal office of the Exchange and on
its 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–2009–75 and should
be submitted on or before September 14,
2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–20196 Filed 8–21–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60513; File No. SR–CBOE–
2009–059]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to the Options
Regulatory Fee
August 17, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934, 15
U.S.C. 78s(b)(1), notice is hereby given
that on August 12, 2009, Chicago Board
Options Exchange, Incorporated
(‘‘CBOE’’ or the ‘‘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 by CBOE. CBOE has
designated this proposal as one
establishing or changing a due, fee, or
other charge applicable only to a
member under Section 19(b)(3)(A)(ii) of
the Act,1 and Rule 19b–4(f)(2)
thereunder,2 which renders the proposal
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
Chicago Board Options Exchange,
Incorporated (‘‘CBOE’’ or ‘‘Exchange’’)
proposes to amend its Fees Schedule
relating to the Options Regulatory Fee.
The text of the proposed rule change is
below. Additions are in italics.
Deletions are in [brackets].
*
*
*
*
*
Chicago Board Options Exchange,
Incorporated Fees Schedule
[August] September 1, 2009
1.–4. Unchanged.
Footnotes:
(1)–(17) Unchanged.
5.–11. Unchanged.
12. Regulatory Fees:
A) Options Regulatory Fee: $.004 per
contract*
*The Options Regulatory Fee is
assessed by CBOE to each member for
all options transactions executed or
cleared by the member that are cleared
by The Options Clearing Corporation
(OCC) in the customer range, excluding
Linkage orders, regardless of the
exchange on which the transaction
occurs. The fee is collected indirectly
from members through their clearing
firms by OCC on behalf of CBOE. There
is a minimum one-cent charge per trade.
Remainder of Fees Schedule—
Unchanged.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
CBOE included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
1 15
19 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00076
Fmt 4703
Sfmt 4703
42719
2 17
E:\FR\FM\24AUN1.SGM
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
24AUN1
]]>Agencies
[Federal Register Volume 74, Number 162 (Monday, August 24, 2009)]
[Notices]
[Pages 42717-42719]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-20196]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-60512; File No. SR-NYSE-2009-75]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
by New York Stock Exchange LLC Adopting NYSE Rule 406 as New Rule 3250
To Correspond With a Rule Change Recently Filed by the Financial
Industry Regulatory Authority, Inc.
August 17, 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 28, 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 substantially prepared by the self-
regulatory organization. The Exchange has designated this proposal
eligible for immediate effectiveness pursuant to Section 19(b)(3)(A) 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.
---------------------------------------------------------------------------
\1\ 15 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).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to adopt NYSE Rule 406 (Designation of
Accounts) as new Rule 3250 to
[[Page 42718]]
correspond with a rule change recently filed by the Financial Industry
Regulatory Authority, Inc. (``FINRA'') and approved by the
Commission.\5\ The text of the proposed rule change is available at the
Exchange, the Commission's Public Reference Room, and https://www.nyse.com.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 59947 (May 20,
2009), 74 FR 25293 (May 27, 2009) (order approving FINRA 2009-017).
---------------------------------------------------------------------------
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 adopt NYSE Rule 406
(Designation of Accounts) as new Rule 3250 to correspond with a rule
change recently filed by FINRA and approved by the Commission.\6\
---------------------------------------------------------------------------
\6\ Id.
---------------------------------------------------------------------------
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,\7\
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 NASD and FINRA Incorporated NYSE Rules in order to
create a consolidated FINRA rulebook.\9\
---------------------------------------------------------------------------
\7\ 17 CFR 240.17d-2.
\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 Amendment to NYSE Rules
As discussed in more detail below, FINRA adopted FINRA Incorporated
NYSE Rule 406 (Designation of Accounts) as consolidated FINRA Rule
3250, subject to some minor technical changes. The NYSE hereby proposes
to adopt NYSE Rule 406 as new Rule 3250 to conform to the rule change
adopted by FINRA.\10\
---------------------------------------------------------------------------
\10\ NYSE Amex LLC has submitted a companion rule filing to
conform its corresponding NYSE Amex Equities Rules to the changes
proposed in this filing. See SR-NYSE-Amex-2009-51, formally
submitted July 28, 2009.
---------------------------------------------------------------------------
Specifically, FINRA Incorporated NYSE Rule 406 provides that no
NYSE member organization shall carry an account on its books in the
name of a person other than that of the customer. However, an account
may be designated by a number or symbol, provided the member
organization has a written statement of ownership signed by the
customer. This Rule has been used to address, inter alia, sales
practice abuses, including commingling of funds, failure to disclose
ownership interests in accounts and unauthorized trading.\11\
---------------------------------------------------------------------------
\11\ See Securities Exchange Act Release No. 59947 (May 20,
2009), 74 FR 25293 (May 27, 2009).
---------------------------------------------------------------------------
FINRA adopted FINRA Incorporated NYSE Rule 406 as consolidated
FINRA Rule 3250 because it believes the Rule is an important
enforcement tool and should be applied to all FINRA members and not
just Dual Members. In addition, the Rule provides customers and their
accounts with a level of anonymity that may be useful while still
permitting identification to the member organization carrying the
account as well as regulators. Upon adoption of Rule 3250, FINRA made
minor technical changes to apply the Rule to all FINRA members,
replacing the terms ``member organization'' or ``organization'' with
the term ``member.'' \12\
---------------------------------------------------------------------------
\12\ Id.
---------------------------------------------------------------------------
To harmonize the NYSE Rules with the approved FINRA Rules, the
Exchange correspondingly proposes to adopt NYSE Rule 406 as new Rule
3250, which is substantially similar to the new FINRA Rule. As
proposed, NYSE Rule 3250 adopts the same language as FINRA Rule 3250,
except for retaining or adding, as needed, the term ``member
organization'' and making corresponding technical changes. As with the
consolidated FINRA Rule, under proposed NYSE Rule 3250 Exchange member
organizations will be required to carry customer accounts in the name
of the customer, except that an account may be designated by a number
or symbol, as long as the member maintains documentation identifying
the customer.\13\
---------------------------------------------------------------------------
\13\ Id. As noted by FINRA, member organizations are subject to
additional requirements regarding customer accounts under the Act.
See, e.g., 17 CFR 240.17a-3(a)(9) (requiring records indicating the
name and address of the beneficial owner of cash and margin customer
accounts).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\14\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\15\ in particular, in that it
is 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.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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 from the date on which it was filed, or
such shorter time as the Commission may designate, if
[[Page 42719]]
consistent with the protection of investors and the public interest, it
has become effective pursuant to Section 19(b)(3)(A) of the Act \16\
and Rule 19b-4(f)(6) thereunder.\17\
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 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.
---------------------------------------------------------------------------
The Exchange has requested that the Commission waive the 30-day
operative delay so that the proposal may become operative immediately
upon filing. The Commission has determined that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest because such waiver will allow the Exchange to promptly
conform its rule with the approved FINRA Rule, and will ensure the
elimination of any potential regulatory gap and that the NYSE Rules
maintain their status as Common Rules under the Agreement. Therefore,
the Commission designates the proposal operative upon filing.\18\
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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-NYSE-2009-75 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-NYSE-2009-75. 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 the filing will also be available for
inspection and copying at the principal office of the Exchange and on
its 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-2009-75 and should be submitted on
or before September 14, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------
\19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-20196 Filed 8-21-09; 8:45 am]
BILLING CODE 8010-01-P
