Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Deleting NYSE Rule 123G and Adopting New Rule 5290 To Correspond With Rule Changes Filed by the Financial Industry Regulatory Authority, Inc., 45188-45190 [2010-18893]
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<![CDATA[
45188
Federal Register / Vol. 75, No. 147 / Monday, August 2, 2010 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
The purpose of the proposed rule
changes is to delete NYSE Rule 123G
(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.
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.
July 26, 2010.
Background
Current FINRA Rule 5290
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, New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
On July 30, 2007, FINRA’s
predecessor, the National Association of
Securities Dealers, Inc. (‘‘NASD’’), and
NYSE Regulation, Inc. (‘‘NYSER’’)
consolidated their member firm
regulation operations into a combined
organization, FINRA. Pursuant to Rule
17d–2 under the Act, NYSE, NYSER and
FINRA entered into an agreement (the
‘‘Agreement’’) to reduce regulatory
duplication for their members by
allocating to FINRA certain regulatory
responsibilities for certain NYSE rules
and rule interpretations (‘‘FINRA
Incorporated NYSE Rules’’). NYSE
Amex LLC (‘‘NYSE Amex’’) 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
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.8
Consolidated FINRA Rule 5290 is
substantially the same as NYSE Rule
123G; however, consolidated FINRA
Rule 5290 applies to the unbundling or
splitting of both orders and executions,
whereas NYSE Rule 123G applies only
to order entry and not execution.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62569; File No. SR–NYSE–
2010–54]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Deleting NYSE
Rule 123G and Adopting New Rule
5290 To Correspond With Rule
Changes Filed by the Financial
Industry Regulatory Authority, Inc.
erowe on DSK5CLS3C1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to delete
NYSE Rule 123G and adopt new Rule
5290 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,
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.
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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15:04 Jul 30, 2010
Jkt 220001
1. Purpose
Current NYSE Rule 123G
NYSE Rule 123G provides that a
member, member organization, allied
member (principal executive),7
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 (‘‘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.
7 In 2008, as part of the FINRA rulebook
consolidation and harmonization process, the
PO 00000
Frm 00102
Fmt 4703
Sfmt 4703
Proposed Conforming Amendments to
NYSE Rules
Even though NYSE Rule 123G 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 and
replace it with proposed NYSE Rule
5290, which is substantially similar to
the new FINRA Rule.9
As proposed, NYSE Rule 5290 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 NYSE Rule 5290 and
FINRA Rule 5290 are fully harmonized,
the Exchange also proposes to add
Supplementary Material .01 to NYSE
Rule 5290 to provide that, for the
Exchange replaced the term ‘‘allied member’’ in
certain NYSE Rules with the newly defined term of
‘‘principal executive’’, which has substantially the
same meaning. See Securities Exchange Act Release
No. 58549 (September 15, 2008), 73 FR 54444
(September 19, 2008) (SR–NYSE–2008–80). Rule
123G should have been updated at that time to
include ‘‘principal executives’’ but was not.
8 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.
9 NYSE Amex has submitted a companion rule
filing amending its rules in accordance with
FINRA’s rule changes. See SR–NYSEAmex–2010–
72.
E:\FR\FM\02AUN1.SGM
02AUN1
Federal Register / Vol. 75, No. 147 / Monday, August 2, 2010 / Notices
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, it
intends to add the Rule to the
Agreement as a Common Rule for dual
NYSE/FINRA members.
2. Statutory Basis
The Exchange believes that the
proposed rule changes are consistent
with Section 6(b) of the Act,10 in
general, and further the objectives of
Section 6(b)(5) of the Act,11 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
Rules and FINRA Rules (including
Common Rules) of similar purpose,
resulting in less burdensome and more
efficient regulatory compliance for Dual
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 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.
erowe on DSK5CLS3C1PROD with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 12 and Rule
19b–4(f)(6) thereunder.13 Because the
10 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
12 15 U.S.C. 78s(b)(3)(A)(iii).
13 17 CFR 240.19b–4(f)(6).
11 15
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15:04 Jul 30, 2010
Jkt 220001
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.14
A proposed rule change filed under
Rule 19b–4(f)(6) 15 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),16 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 NYSE Rule 5290 to prevent any
regulatory gaps between the NYSE and
FINRA rules. In addition, as noted by
the Exchange, NYSE Rule 5290 is
consistent with FINRA Rule 5290,
which was previously approved by the
Commission.17
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
14 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.
15 17 CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6)(iii).
17 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).
PO 00000
Frm 00103
Fmt 4703
Sfmt 4703
45189
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–2010–54 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–2010–54. 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–NYSE–
2010–54 and should be submitted on or
before August 23, 2010.
18 17
E:\FR\FM\02AUN1.SGM
CFR 200.30–3(a)(12).
02AUN1
45190
Federal Register / Vol. 75, No. 147 / Monday, August 2, 2010 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–18893 Filed 7–30–10; 8:45 am]
BILLING CODE 8010–01–P
SOCIAL SECURITY ADMINISTRATION
Agency Information Collection
Activities: Proposed Request and
Comment Request
The Social Security Administration
(SSA) publishes a list of information
collection packages requiring clearance
by the Office of Management and
Budget (OMB) in compliance with
Public Law (Pub. L.) 104–13, the
Paperwork Reduction Act of 1995,
effective October 1, 1995. This notice
includes revisions of OMB-approved
information collections.
I. The information collections below
are pending at SSA. SSA will submit
them to OMB within 60 days from the
date of this notice. To be sure we
consider your comments, we must
receive them no later than October 1,
2010. Individuals can obtain copies of
the collection instruments by calling the
SSA Reports Clearance Officer at 410–
965–8783 or by writing to the above email address.
1. Request for Corrections of Earnings
Record—20 CFR 404.820 and 20 CFR
422.125—0960–0029. Individuals
alleging inaccurate earnings records that
SSA maintains for them use Form SSA–
7008 to provide the information SSA
needs to check earnings posted, and as
necessary, initiate development to
resolve any inaccuracies. The
respondents are individuals who
request correction of earnings posted to
their Social Security earnings record.
Type of Request: Revision of an OMBapproved information collection.
SSA is soliciting comments on the
accuracy of the agency’s burden
estimate; the need for the information;
its practical utility; ways to enhance its
quality, utility, and clarity; and ways to
minimize burden on respondents,
including the use of automated
collection techniques or other forms of
information technology. Mail, e-mail, or
fax your comments and
recommendations on the information
collection(s) to the OMB Desk Officer
and SSA Reports Clearance Officer to
the following addresses or fax numbers.
(OMB), Office of Management and
Budget, Attn: Desk Officer for SSA,
Fax: 202–395–6974, E-mail address:
OIRA_Submission@omb.eop.gov.
(SSA), Social Security Administration,
DCBFM, Attn: Reports Clearance
Officer, 1333 Annex Building, 6401
Security Blvd., Baltimore, MD 21235,
Fax: 410–965–6400, E-mail address:
OPLM.RCO@ssa.gov.
Number of
respondents
Method of collection
Frequency of
response
Estimated
burden per
response
(minutes)
Estimated
annual
burden
(hours)
37,500
337,500
1
1
10
10
6,250
56,250
Total ..........................................................................................................
erowe on DSK5CLS3C1PROD with NOTICES
Paper form .......................................................................................................
In-person or telephone interview .....................................................................
375,000
........................
........................
62,500
2. Missing and Discrepant Wage
Reports Letter and Questionnaire—26
CFR 31.6051–2—0960–0432. Each year
employers report the wage amounts they
paid their employees to the Internal
Revenue Service (IRS) for tax purposes,
and separately to SSA for retirement
and disability coverage purposes. These
reported amounts should equal each
other. However, each year some
employer wage reports SSA receives are
less than the wage amounts employers
report to the IRS. SSA uses Forms SSA–
L93–SM, SSA–L94–SM, SSA–95–SM,
and SSA–97–SM to ensure employees
receive full credit for their wages.
Respondents are employers who
reported lower wage amounts to SSA
than they reported to the IRS.
Type of Request: Revision of an OMBapproved information collection.
Number of Respondents: 360,000.
Frequency of Response: 1.
Average Burden per Response: 30
minutes.
Estimated Annual Burden: 180,000
hours.
3. Appointment of Representative—20
CFR 404.1707, 4041720, 404.1725,
410.684 and 416.1507—0960–0527.
Persons claiming benefits under the
Social Security Act must notify SSA in
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15:04 Jul 30, 2010
Jkt 220001
writing when they appoint an
individual to represent them in dealings
with SSA. SSA collects the information
on Form SSA–1696–U4 to verify the
appointment of such representatives.
The SSA–1696–U4 also allows SSA to
inform representatives of items affecting
the recipient’s claim and allows
claimants to give permission to their
appointed representatives to designate a
person to copy claims files.
Respondents are applicants/recipients
of Social Security benefits or
Supplemental Security Income (SSI)
payments who are notifying SSA they
have appointed a person to represent
them in their dealings with SSA.
Type of Request: Revision of an OMBapproved information collection.
Number of Respondents: 551,520.
Frequency of Response: 1.
Average Burden per Response: 10
minutes.
Estimated Annual Burden: 91,920
hours.
4. Appeal of Determination for Help
with Medicare Prescription Drug Plan
Costs—0960–0695. Public Law 108–173,
the Medicare Prescription Drug,
Improvement, and Modernization Act of
2003 (MMA) established the Medicare
Part D program for voluntary
PO 00000
Frm 00104
Fmt 4703
Sfmt 4703
prescription drug coverage for certain
low-income individuals. The MMA
stipulates subsidies must be available
for individuals who are eligible for the
program and who meet eligibility
criteria for help with premium,
deductible, and/or co-payment costs.
Form SSA–1021, Appeal of
Determination for Help with Medicare
Prescription Drug Plan Costs, obtains
information from individuals who
appeal SSA’s decisions regarding
eligibility or continuing eligibility for a
Medicare Part D subsidy. The
respondents are applicants who are
appealing SSA’s eligibility or
continuing eligibility decisions.
Type of Request: Revision of an OMBapproved information collection.
Number of Respondents: 75,000.
Frequency of Response: 1.
Average Burden per Response: 10
minutes.
Estimated Annual Burden: 12,500
hours.
5. Consent Based Social Security
Number Verification Process—20 CFR
400.100—0960–0760. The ConsentBased Social Security Number (SSN)
Verification (CBSV) process is a feebased automated SSN verification
service available to private businesses
E:\FR\FM\02AUN1.SGM
02AUN1
]]>Agencies
[Federal Register Volume 75, Number 147 (Monday, August 2, 2010)]
[Notices]
[Pages 45188-45190]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-18893]
[[Page 45188]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62569; File No. SR-NYSE-2010-54]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Deleting NYSE Rule 123G and Adopting New Rule 5290 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, New York Stock Exchange LLC (``NYSE'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the self-regulatory
organization. The 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 NYSE Rule 123G and adopt new Rule
5290 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, 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 NYSE Rule
123G (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,
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''). NYSE Amex LLC
(``NYSE Amex'') 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 (``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.
---------------------------------------------------------------------------
Current NYSE Rule 123G
NYSE Rule 123G provides that a member, member organization, allied
member (principal executive),\7\ 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.
---------------------------------------------------------------------------
\7\ In 2008, as part of the FINRA rulebook consolidation and
harmonization process, the Exchange replaced the term ``allied
member'' in certain NYSE Rules with the newly defined term of
``principal executive'', which has substantially the same meaning.
See Securities Exchange Act Release No. 58549 (September 15, 2008),
73 FR 54444 (September 19, 2008) (SR-NYSE-2008-80). Rule 123G should
have been updated at that time to include ``principal executives''
but was not.
---------------------------------------------------------------------------
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.\8\
---------------------------------------------------------------------------
\8\ 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.
---------------------------------------------------------------------------
Consolidated FINRA Rule 5290 is substantially the same as NYSE Rule
123G; however, consolidated FINRA Rule 5290 applies to the unbundling
or splitting of both orders and executions, whereas NYSE Rule 123G
applies only to order entry and not execution.
Proposed Conforming Amendments to NYSE Rules
Even though NYSE Rule 123G 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 and replace
it with proposed NYSE Rule 5290, which is substantially similar to the
new FINRA Rule.\9\
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\9\ NYSE Amex has submitted a companion rule filing amending its
rules in accordance with FINRA's rule changes. See SR-NYSEAmex-2010-
72.
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As proposed, NYSE Rule 5290 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 NYSE Rule 5290 and FINRA Rule 5290 are fully harmonized,
the Exchange also proposes to add Supplementary Material .01 to NYSE
Rule 5290 to provide that, for the
[[Page 45189]]
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,
it intends to add the Rule to the Agreement as a Common Rule for dual
NYSE/FINRA members.
2. Statutory Basis
The Exchange believes that the proposed rule changes are consistent
with Section 6(b) of the Act,\10\ in general, and further the
objectives of Section 6(b)(5) of the Act,\11\ 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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\10\ 15 U.S.C. 78f(b).
\11\ 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
Rules and FINRA Rules (including Common Rules) of similar purpose,
resulting in less burdensome and more efficient regulatory compliance
for Dual 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 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.
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 \12\ and Rule 19b-4(f)(6) thereunder.\13\
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.\14\
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\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6).
\14\ 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) \15\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\16\ 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 NYSE Rule 5290 to
prevent any regulatory gaps between the NYSE and FINRA rules. In
addition, as noted by the Exchange, NYSE Rule 5290 is consistent with
FINRA Rule 5290, which was previously approved by the Commission.\17\
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
\17\ 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-NYSE-2010-54 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-2010-54. 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-NYSE-2010-54 and should be
submitted on or before August 23, 2010.
[[Page 45190]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-18893 Filed 7-30-10; 8:45 am]
BILLING CODE 8010-01-P
