Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Deleting Rule 123G-NYSE Amex Equities and Adopting New Rule 5290-NYSE Amex Equities to Correspond With Rule Changes Filed by the Financial Industry Regulatory Authority, Inc., 45183-45185 [2010-18891]
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erowe on DSK5CLS3C1PROD with NOTICES
Federal Register / Vol. 75, No. 147 / Monday, August 2, 2010 / Notices
years in an easily accessible place, a
written record of each purchase of
securities in an Affiliated Underwriting
once an investment by a Fund of Funds
in the securities of an Unaffiliated
Management Company exceeds the limit
of section 12(d)(1)(A)(i) of the Act,
setting forth the: (a) Party from whom
the securities were acquired; (b) identity
of the underwriting syndicate’s
members; (c) terms of the purchase; and
(d) information or materials upon which
the determinations of the Board of the
Unaffiliated Management Company
were made.
8. Prior to its investment in shares of
an Unaffiliated Management Company
in excess of the limit set forth in section
12(d)(1)(A)(i) of the Act, the Fund of
Funds and the Unaffiliated Fund will
execute a Participation Agreement
stating, without limitation, that their
boards of directors or trustees and their
investment advisers understand the
terms and conditions of the order and
agree to fulfill their responsibilities
under the order. At the time of its
investment in shares of an Unaffiliated
Management Company in excess of the
limit set forth in section 12(d)(1)(A)(i),
a Fund of Funds will notify the
Unaffiliated Management Company of
the investment. At such time, the Fund
of Funds will also transmit to the
Unaffiliated Management Company a
list of the names of each Fund of Funds
Affiliate and Underwriting Affiliate. The
Fund of Funds will notify the
Unaffiliated Management Company of
any changes to the list as soon as
reasonably practicable after a change
occurs. The Unaffiliated Management
Company and the Fund of Funds will
maintain and preserve a copy of the
order, the Participation Agreement, and
the list with any updated information
for the duration of the investment and
for a period of not less than six years
thereafter, the first two years in an
easily accessible place.
9. Before approving any advisory
contract under section 15 of the Act, the
Board of each Fund of Funds, including
a majority of the Independent Trustees,
shall find that the advisory fees charged
under the advisory contract are based on
services provided that are in addition to,
rather than duplicative of, services
provided under the advisory contract(s)
of any Underlying Fund in which the
Fund of Funds may invest. Such
finding, and the basis upon which the
finding was made, will be recorded fully
in the minute books of the appropriate
Fund of Funds.
10. Each Manager will waive fees
otherwise payable to it by a Fund of
Funds in an amount at least equal to any
compensation (including fees received
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pursuant to any plan adopted by an
Unaffiliated Fund pursuant to rule 12b–
1 under the Act) received from an
Unaffiliated Fund by the Manager, or an
affiliated person of the Manager, other
than any advisory fees paid to the
Manager or its affiliated person by the
Unaffiliated Fund, in connection with
the investment by the Fund of Funds in
the Unaffiliated Fund. Any Sub-Adviser
will waive fees otherwise payable to the
Sub-Adviser, directly or indirectly, by
the Fund of Funds in an amount at least
equal to any compensation received by
the Sub-Adviser, or an affiliated person
of the Sub-Adviser, from an Unaffiliated
Fund, other than any advisory fees paid
to the Sub-Adviser or its affiliated
person by the Unaffiliated Fund, in
connection with the investment by the
Fund of Funds in the Unaffiliated Fund
made at the direction of the SubAdviser. In the event that the SubAdviser waives fees, the benefit of the
waiver will be passed through to the
Fund of Funds.
11. With respect to Registered
Separate Accounts that invest in a Fund
of Funds, no sales load will be charged
at the Fund of Funds level or at the
Underlying Fund level. Other sales
charges and service fees, as defined in
NASD Conduct Rule 2830, if any, will
only be charged at the Fund of Funds
level or at the Underlying Fund level,
not both. With respect to other
investments in a Fund of Funds, any
sales charges and/or service fees
charged with respect to shares of a Fund
of Funds will not exceed the limits
applicable to funds of funds set forth in
NASD Conduct Rule 2830.
12. No Underlying Fund will acquire
securities of any other investment
company or company relying on section
3(c)(1) or 3(c)(7) of the Act in excess of
the limits contained in section
12(d)(1)(A) of the Act, except to the
extent that such Underlying Fund: (a)
Receives securities of another
investment company as a dividend or as
a result of a plan of reorganization of a
company (other than a plan devised for
the purpose of evading section 12(d)(1)
of the Act); or (b) acquires (or is deemed
to have acquired) securities of another
investment company pursuant to
exemptive relief from the Commission
permitting such Underlying Fund to: (i)
Acquire securities of one or more
investment companies for short-term
cash management purposes, or (ii)
engage in interfund borrowing and
lending transactions.
PO 00000
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45183
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–18894 Filed 7–30–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62572; File No. SR–
NYSEAmex–2010–72]
Self-Regulatory Organizations; NYSE
Amex LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Deleting Rule 123G—
NYSE Amex Equities and Adopting
New Rule 5290—NYSE Amex Equities
to Correspond With Rule Changes
Filed by the Financial Industry
Regulatory Authority, Inc.
July 26, 2010.
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 July 19,
2010, NYSE Amex LLC (the ‘‘Exchange’’
or ‘‘NYSE Amex’’) 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
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 Rule
123G—NYSE Amex Equities and adopt
new Rule 5290—NYSE Amex Equities
to correspond with rule changes filed by
the Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) and approved
by the Commission.4 The text of the
proposed rule change is available at the
Exchange, at the Commission’s Public
Reference Room, on the Commission’s
Web site at https://www.sec.gov, and at
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,
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 See Securities Exchange Act Release No. 61071
(November 30, 2009), 74 FR 64109 (December 7,
2009) (order approving SR–FINRA–2009–067).
2 15
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45184
Federal Register / Vol. 75, No. 147 / Monday, August 2, 2010 / Notices
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
changes is to delete Rule 123G—NYSE
Amex Equities (Order Entry Practices)
and adopt new Rule 5290 (Order Entry
and Execution Practices) to correspond
with rule changes filed by FINRA and
approved by the Commission.
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, the New York
Stock Exchange LLC (‘‘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’’). The
Exchange became a party to the
Agreement effective December 15,
2008.5
As part of its effort to reduce
regulatory duplication and relieve firms
that are members of FINRA, NYSE and
NYSE Amex 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.6
5 See Securities Exchange Act Release Nos. 56148
(July 26, 2007), 72 FR 42146 (August 1, 2007) (order
approving the Agreement); 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’’); and 60409 (July 30,
2009), 74 FR 39353 (August 6, 2009) (order
approving the amended and restated Agreement,
adding NYSE Amex LLC as a party). Paragraph 2(b)
of the Agreement sets forth procedures regarding
proposed changes by FINRA, NYSE or NYSE Amex
to the substance of any of the Common Rules.
6 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, while the consolidated FINRA Rules
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Current Rule 123G—NYSE Amex
Equities
Rule 123G—NYSE Amex Equities
provides that a member, member
organization, principal executive,
approved person, or registered or nonregistered employee thereof, may not
engage in conduct that has the intent or
effect of unbundling or splitting orders
for execution in order to maximize a
monetary or in-kind payment received
as a result of the execution of such
orders. For purposes of the Rule,
‘‘monetary or in-kind amounts’’ include
commissions, gratuities, payments for or
rebate of fees, or any similar payments
of value resulting from the entry of such
orders.
Equities and FINRA Rule 5290 are fully
harmonized, the Exchange also proposes
to add Supplementary Material .01 to
Rule 5290—NYSE Amex Equities to
provide that, for the purposes of the
rule, the term ‘‘associated person’’ shall
have the same meaning as the terms
‘‘person associated with a member’’ or
‘‘associated person of a member’’ as
defined in Article I (rr) of the FINRA ByLaws.
The Exchange also notes that, upon
adoption of proposed Rule 5290—NYSE
Amex Equities, it intends to add the
Rule to the Agreement as a Common
Rule for dual NYSE Amex/FINRA
members.
Current FINRA Rule 5290
In December 2009, FINRA adopted
NASD Rule 3380 (Order Entry and
Execution Practices), which governs
certain order entry and/or execution
practices, as consolidated FINRA Rule
5290, subject to certain modifications.7
Consolidated FINRA Rule 5290 is
substantially the same as Rule 123G—
NYSE Amex Equities; however,
consolidated FINRA Rule 5290 applies
to the unbundling or splitting of both
orders and executions, whereas Rule
123G—NYSE Amex Equities applies
only to order entry and not execution.
2. Statutory Basis
Proposed Conforming Amendments to
NYSE Amex Equities Rules
Even though Rule 123G—NYSE Amex
Equities is not part of the Common
Rules subject to the rulebook
consolidation and harmonization
process governed by the Agreement, the
Exchange hereby proposes to delete
Rule 123G—NYSE Amex Equities and
replace it with proposed Rule 5290—
NYSE Amex Equities, which is
substantially similar to the new FINRA
Rule.8
As proposed, Rule 5290—NYSE Amex
Equities adopts the same language as
FINRA Rule 5290, except for
substituting for or adding to, as needed,
the term ‘‘member organization’’ for the
term ‘‘member’’, and making
corresponding technical changes. In
addition, in order to ensure that both
proposed Rule 5290—NYSE Amex
apply to all FINRA members. For more information
about the FINRA rulebook consolidation process,
see FINRA Information Notice, March 12, 2008.
7 See Securities Exchange Act Release No. 61071
(November 30, 2009), 74 FR 64109 (December 7,
2009). In this filing FINRA also adopted NASD Rule
3120 (Use of Information Obtained in Fiduciary
Capacity) as consolidated FINRA Rule 2060. The
Exchange does not intend to adopt a corresponding
rule at this time.
8 NYSE has submitted a companion rule filing
amending its rules in accordance with FINRA’s rule
changes. See SR–NYSE–2010–54.
PO 00000
Frm 00098
Fmt 4703
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The Exchange believes that the
proposed rule changes are consistent
with Section 6(b) of the Act,9 in general,
and further the objectives of Section
6(b)(5) of the Act,10 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 Exchange believes that the
proposed rule changes support the
objectives of the Act by providing
greater harmonization between NYSE
Amex Equities Rules and FINRA Rules
of similar purpose, resulting in less
burdensome and more efficient
regulatory compliance for joint
members. To the extent the Exchange
has proposed changes that differ from
the FINRA version of the Rules, such
changes are technical in nature and do
not change the substance of the
proposed NYSE Amex Equities Rules.
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.
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 15
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Federal Register / Vol. 75, No. 147 / Monday, August 2, 2010 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 11 and Rule
19b–4(f)(6) thereunder.12 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b-4(f)(6)(iii)
thereunder.13
A proposed rule change filed under
Rule 19b–4(f)(6) 14 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),15 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 Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest,
because such waiver will enable the
Exchange to immediately implement
new Rule 5290—NYSE Amex Equities
to prevent any regulatory gaps between
the NYSE Amex and FINRA rules. In
addition, as noted by the Exchange,
Rule 5290—NYSE Amex Equities is
consistent with FINRA Rule 5290,
which was previously approved by the
Commission.16
Accordingly, the Commission waives
the 30-day operative delay requirement
and designates the proposed rule change
as operative upon filing with the
Commission. At any time within 60
days of the filing of the proposed rule
change, the Commission may summarily
11 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
13 See id. 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.
14 17 CFR 240.19b–4(f)(6).
15 17 CFR 240.19b–4(f)(6)(iii).
16 See supra note 4. 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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12 17
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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–2010–72 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–2010–72. 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 Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal office of the
Exchange. All comments received will
be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
publicly available. All submissions
should refer to File Number SR–
PO 00000
Frm 00099
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Sfmt 4703
45185
NYSEAmex–2010–72 and should be
submitted on or before August 23, 2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–18891 Filed 7–30–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62578; File Nos. SR–NYSE–
2010–43 and SR–NYSEAmex–2010–53]
Self-Regulatory Organizations; New
York Stock Exchange LLC and NYSE
Amex LLC; Order Approving Proposed
Rule Changes Amending the
Exchanges’ Rules To Incorporate the
Receipt and Execution of Odd-Lot
Interest Into the Round Lot Market and
Decommission the Use of the ‘‘Odd-Lot
System’’
July 27, 2010.
I. Introduction
On June 9, 2010 and June 10, 2010
respectively, the New York Stock
Exchange LLC (‘‘NYSE’’) and NYSE
Amex LLC (‘‘NYSE Amex’’ and, with
NYSE, each an ‘‘Exchange’’ and
collectively, the ‘‘Exchanges’’) each filed
with the Securities and Exchange
Commission (the ‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule change to incorporate the
receipt and execution of odd-lot interest
into the round lot market and
decommission the use of the ‘‘Odd-lot
System.’’ The proposed rule changes
were published for comment in the
Federal Register on June 23, 2010.3 The
Commission received one comment
letter in support of NYSE’s proposal.4
This order approves the proposed rule
changes.
II. Description of the Proposals
The Exchanges seek to amend their
rules to incorporate the receipt and
execution of odd-lot interest into the
round lot market and decommission the
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release Nos. 62302
(June 16, 2010), 75 FR 35856; and 62303 (June 16,
2010), 75 FR 35865 (each a ‘‘Notice’’ and
collectively, the ‘‘Notices’’).
4 See Letter from John N. Jacobs, Chief Operations
Officer, Lime Brokerage LLC, dated June 28, 2010
(‘‘Lime Letter’’). The Lime Letter generally endorsed
the incorporation of odd lots and the odd lot
portion of partial round lots into the round lot
system.
1 15
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]]>Agencies
[Federal Register Volume 75, Number 147 (Monday, August 2, 2010)]
[Notices]
[Pages 45183-45185]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-18891]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62572; File No. SR-NYSEAmex-2010-72]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Deleting Rule
123G--NYSE Amex Equities and Adopting New Rule 5290--NYSE Amex Equities
to Correspond With Rule Changes Filed by the Financial Industry
Regulatory Authority, Inc.
July 26, 2010.
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 July 19, 2010, NYSE Amex LLC (the ``Exchange'' or ``NYSE
Amex'') 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 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to delete Rule 123G--NYSE Amex Equities and
adopt new Rule 5290--NYSE Amex Equities to correspond with rule changes
filed by the Financial Industry Regulatory Authority, Inc. (``FINRA'')
and approved by the Commission.\4\ The text of the proposed rule change
is available at the Exchange, at the Commission's Public Reference
Room, on the Commission's Web site at https://www.sec.gov, and at https://www.nyse.com.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 61071 (November 30,
2009), 74 FR 64109 (December 7, 2009) (order approving SR-FINRA-
2009-067).
---------------------------------------------------------------------------
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,
[[Page 45184]]
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 changes is to delete Rule 123G--
NYSE Amex Equities (Order Entry Practices) and adopt new Rule 5290
(Order Entry and Execution Practices) to correspond with rule changes
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, the
New York Stock Exchange LLC (``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''). The Exchange became a party to the
Agreement effective December 15, 2008.\5\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release Nos. 56148 (July 26,
2007), 72 FR 42146 (August 1, 2007) (order approving the Agreement);
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''); and 60409 (July 30, 2009), 74 FR 39353 (August 6,
2009) (order approving the amended and restated Agreement, adding
NYSE Amex LLC as a party). Paragraph 2(b) of the Agreement sets
forth procedures regarding proposed changes by FINRA, NYSE or NYSE
Amex to the substance of any of the Common Rules.
---------------------------------------------------------------------------
As part of its effort to reduce regulatory duplication and relieve
firms that are members of FINRA, NYSE and NYSE Amex 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.\6\
---------------------------------------------------------------------------
\6\ 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, 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.
---------------------------------------------------------------------------
Current Rule 123G--NYSE Amex Equities
Rule 123G--NYSE Amex Equities provides that a member, member
organization, principal executive, approved person, or registered or
non-registered employee thereof, may not engage in conduct that has the
intent or effect of unbundling or splitting orders for execution in
order to maximize a monetary or in-kind payment received as a result of
the execution of such orders. For purposes of the Rule, ``monetary or
in-kind amounts'' include commissions, gratuities, payments for or
rebate of fees, or any similar payments of value resulting from the
entry of such orders.
Current FINRA Rule 5290
In December 2009, FINRA adopted NASD Rule 3380 (Order Entry and
Execution Practices), which governs certain order entry and/or
execution practices, as consolidated FINRA Rule 5290, subject to
certain modifications.\7\
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\7\ See Securities Exchange Act Release No. 61071 (November 30,
2009), 74 FR 64109 (December 7, 2009). In this filing FINRA also
adopted NASD Rule 3120 (Use of Information Obtained in Fiduciary
Capacity) as consolidated FINRA Rule 2060. The Exchange does not
intend to adopt a corresponding rule at this time.
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Consolidated FINRA Rule 5290 is substantially the same as Rule
123G--NYSE Amex Equities; however, consolidated FINRA Rule 5290 applies
to the unbundling or splitting of both orders and executions, whereas
Rule 123G--NYSE Amex Equities applies only to order entry and not
execution.
Proposed Conforming Amendments to NYSE Amex Equities Rules
Even though Rule 123G--NYSE Amex Equities is not part of the Common
Rules subject to the rulebook consolidation and harmonization process
governed by the Agreement, the Exchange hereby proposes to delete Rule
123G--NYSE Amex Equities and replace it with proposed Rule 5290--NYSE
Amex Equities, which is substantially similar to the new FINRA Rule.\8\
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\8\ NYSE has submitted a companion rule filing amending its
rules in accordance with FINRA's rule changes. See SR-NYSE-2010-54.
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As proposed, Rule 5290--NYSE Amex Equities adopts the same language
as FINRA Rule 5290, except for substituting for or adding to, as
needed, the term ``member organization'' for the term ``member'', and
making corresponding technical changes. In addition, in order to ensure
that both proposed Rule 5290--NYSE Amex Equities and FINRA Rule 5290
are fully harmonized, the Exchange also proposes to add Supplementary
Material .01 to Rule 5290--NYSE Amex Equities to provide that, for the
purposes of the rule, the term ``associated person'' shall have the
same meaning as the terms ``person associated with a member'' or
``associated person of a member'' as defined in Article I (rr) of the
FINRA By-Laws.
The Exchange also notes that, upon adoption of proposed Rule 5290--
NYSE Amex Equities, it intends to add the Rule to the Agreement as a
Common Rule for dual NYSE Amex/FINRA members.
2. Statutory Basis
The Exchange believes that the proposed rule changes are consistent
with Section 6(b) of the Act,\9\ in general, and further the objectives
of Section 6(b)(5) of the Act,\10\ 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.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule changes support the
objectives of the Act by providing greater harmonization between NYSE
Amex Equities Rules and FINRA Rules of similar purpose, resulting in
less burdensome and more efficient regulatory compliance for joint
members. To the extent the Exchange has proposed changes that differ
from the FINRA version of the Rules, such changes are technical in
nature and do not change the substance of the proposed NYSE Amex
Equities Rules.
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.
[[Page 45185]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.\13\
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
\13\ See id. 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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A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ 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 Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest, because such waiver
will enable the Exchange to immediately implement new Rule 5290--NYSE
Amex Equities to prevent any regulatory gaps between the NYSE Amex and
FINRA rules. In addition, as noted by the Exchange, Rule 5290--NYSE
Amex Equities is consistent with FINRA Rule 5290, which was previously
approved by the Commission.\16\
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ See supra note 4. 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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Accordingly, the Commission waives the 30-day operative delay
requirement and designates the proposed rule change as operative upon
filing with the Commission. 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-2010-72 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-2010-72. 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 Web site
viewing and printing in the Commission's Public Reference Room, 100 F
Street, NE., Washington, DC 20549, on official business days between
the hours of 10 a.m. and 3 p.m. Copies of such filing also will be
available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
publicly available. All submissions should refer to File Number SR-
NYSEAmex-2010-72 and should be submitted on or before August 23, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-18891 Filed 7-30-10; 8:45 am]
BILLING CODE 8010-01-P
