Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Deleting the Text of NYSE Rule 409(f) and Adopting the Text of FINRA Rule 2232 and Deleting the Rule Interpretations to NYSE Rule 346, 39951-39953 [2011-16930]
Download as PDF
Federal Register / Vol. 76, No. 130 / Thursday, July 7, 2011 / Notices
the date of the filing.15 However,
pursuant to Rule 19b–4(f)(6)(iii), the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest.16 The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. In its filing, the Exchange notes
that the proposal to add new Rule
2232—NYSE Amex Equities is
substantially similar to the rule that the
Commission approved for FINRA,17 and
the proposal conforms the Exchange’s
Rules with those of FINRA, in
furtherance of the consolidation of the
member firm regulation functions of
NYSE Amex Equities, NYSE, and
FINRA. For this reason, the Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest, and designates the proposed
rule change to be operative upon filing
with the Commission.18
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend 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–2011–41 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–2011–41. 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 the filing will
also be available for inspection and
copying at the NYSE’s principal office
and on its Internet Web site at https://
www.nyse.com. All comments received
will be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEAMEX–2011–41 and should be
submitted on or before July 28, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–16931 Filed 7–6–11; 8:45 am]
16 17
sroberts on DSK5SPTVN1PROD with NOTICES
15 Id.
BILLING CODE 8011–01–P
CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) requires that a self-regulatory
organization submit to the Commission written
notice of its intent to file the proposed rule change,
along with a brief description and text of the
proposed rule change, at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
17 See note 6, supra.
18 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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16:26 Jul 06, 2011
Jkt 223001
PO 00000
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64782; File No. SR–NYSE–
2011–26]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Deleting the
Text of NYSE Rule 409(f) and Adopting
the Text of FINRA Rule 2232 and
Deleting the Rule Interpretations to
NYSE Rule 346
June 30, 2011.
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 June 17,
2011, 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 selfregulatory 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 (1) To delete
the text of NYSE Rule 409(f) and adopt
the text of FINRA Rule 2232 and (2)
delete the Rule Interpretations to NYSE
Rule 346. The text of the proposed rule
change is available at the Exchange, the
Commission’s Public Reference Room,
and https://www.nyse.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a et seq.
3 17 CFR 240.19b–4.
2 15
19 17
CFR 200.30–3(a)(12).
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39951
E:\FR\FM\07JYN1.SGM
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Federal Register / Vol. 76, No. 130 / Thursday, July 7, 2011 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to (1) Delete
the text of NYSE Rule 409(f) and adopt
the text of FINRA Rule 2232 and (2)
delete the Rule Interpretations to NYSE
Rule 346.
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.4 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
NYSE Rule 409(f) and FINRA Rule 2232
sroberts on DSK5SPTVN1PROD with NOTICES
In connection with the rule
consolidation efforts between the
Exchange and FINRA, the Commission
has recently approved FINRA Rule
4 See Securities Exchange Act Release No. 62970
(Sept. 22, 2010), 75 FR 59771 (Sept. 28, 2010) (order
approving SR–FINRA–2010–37).
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.
VerDate Mar<15>2010
16:26 Jul 06, 2011
Jkt 223001
2232,7 which is modeled after NYSE
Rule 409(f), NASD Rule 2230 and NASD
IM–2110–6.8 FINRA Rule 2232 requires
member firms, at or before the
completion of any transaction in any
security effected for or with an account
of a customer, to give or send to such
customer written notification
(‘‘confirmation’’) in conformity with the
requirements of Rule 10b–10 under the
Act. A confirmation given or sent
pursuant to FINRA Rule 2232 must
further disclose (1) With respect to any
transaction in any NMS stock, as
defined in Rule 600 of SEC Regulation
NMS, or any security subject to the
reporting requirements of the FINRA
Rule 6600 Series, other than direct
participation programs as defined in
FINRA Rule 6420, the settlement date of
the transaction; and (2) with respect to
any transaction in a callable equity
security, that (A) the security is a
callable equity security and (B) a
customer may contact the member for
more information concerning the
security.
The Exchange proposes to delete the
text of NYSE Rule 409(f) 9 and adopt the
text of FINRA Rule 2232 as NYSE Rule
2232, with certain technical changes.
Specifically, for consistency with
Exchange rules, the Exchange proposes
to change all references to ‘‘members’’ to
‘‘member organizations.’’ The Exchange
also proposes to delete the text of
Commentary .20 to Rule 411, which will
no longer be applicable after the
deletion of the text of NYSE Rule 409(f).
The Exchange proposes that these
changes, including new NYSE Rule
2232, be effective on the same date as
FINRA makes FINRA Rule 2232
effective.10
7 See Securities Exchange Act Release No. 63150
(October 21, 2010), 75 FR 66173 (October 27, 2010)
(SR–FINRA–2009–058). See also Securities
Exchange Act Release No. 63561 (December 16,
2010), 75 FR 80556 (December 22, 2010) (SR–
FINRA–2010–066).
8 NYSE Rule 409(f) currently provides that
confirmation of all transactions in securities
admitted to dealings on the Exchange, sent by
members or member organizations to their
customers, shall clearly set forth with a suitable
legend the settlement date of each transaction.
9 NYSE Rule 409(f) would be marked as
‘‘Reserved’’ until such time as NYSE Rule 409 is
fully harmonized with FINRA rules. The Exchange
notes that FINRA has proposed a rule change that
would result in the deletion of the remaining text
of FINRA Incorporated NYSE Rule 409. See
Securities Exchange Act Release No. 59921 (May
14, 2009), 74 FR 23912 (May 21, 2009) (SR–FINRA–
2009–028).
10 See FINRA Regulatory Notice 10–62. The
implementation date is currently scheduled for June
17, 2011. NYSE Amex also has submitted a
companion rule filing amending its rules in
accordance with FINRA’s rule changes. See SR–
NYSEAmex–2011–41.
PO 00000
Frm 00142
Fmt 4703
Sfmt 4703
Rule Interpretations to NYSE Rule 346
The Exchange has previously
submitted a proposed rule change with
the Commission that deleted NYSE Rule
346 (Limitations—Employment and
Association with Members and Member
Organizations) and adopted new Rule
3270 (Outside Business Activities of
Registered Persons) to correspond with
rule changes filed by FINRA and
approved by the Commission.11 As
such, the Exchange also proposes to
delete the Rule Interpretations to NYSE
Rule 346 in their entirety, which were
also deleted by FINRA when it deleted
its Incorporated NYSE Rule 346. To
harmonize Exchange Rule
Interpretations with FINRA’s rule, the
Exchange proposes that this change be
immediately effective upon filing.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the
Act,12 in general, and furthers the
objectives of Section 6(b)(5),13 in
particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, and to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system.
Specifically, the Exchange believes that
the proposed rule change supports the
objectives of the Act by providing
greater harmonization between NYSE
Rules and FINRA Rules of similar
purpose, resulting in less burdensome
and more efficient regulatory
compliance. 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. Additionally, the
proposed deletion of the Rule
Interpretations to NYSE Rule 346 would
result in the removal of interpretations
to an NYSE Rule that no longer exists
and would therefore eliminate any
potential confusion among members or
member organizations regarding the
applicability of such Rule
Interpretations.
11 See Securities Exchange Act Release No. 64131
(March 28, 2011), 76 FR 18285 (April 1, 2011) (SR–
NYSE–2011–12). See also Securities Exchange Act
Release No. 62762 (August 23, 2010), 75 FR 53362
(August 31, 2010) (order approving SR–FINRA–
2009–042).
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(5).
E:\FR\FM\07JYN1.SGM
07JYN1
Federal Register / Vol. 76, No. 130 / Thursday, July 7, 2011 / Notices
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 14 and Rule
19b–4(f)(6) thereunder.15 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.
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative prior to 30 days after
the date of the filing.16 However,
pursuant to Rule 19b–4(f)(6)(iii),17 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. In its filing, the Exchange notes
that the proposal to add new NYSE Rule
2232 is substantially similar to the rule
that the Commission approved for
FINRA,18 and the proposal conforms the
Exchange’s Rules with those of FINRA,
in furtherance of the consolidation of
14 15
15 17
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
sroberts on DSK5SPTVN1PROD with NOTICES
16 Id.
17 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) requires that a self-regulatory
organization submit to the Commission written
notice of its intent to file the proposed rule change,
along with a brief description and text of the
proposed rule change, at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
18 See note 6, supra.
VerDate Mar<15>2010
16:26 Jul 06, 2011
Jkt 223001
the member firm regulation functions of
NYSE, NYSE Amex Equities, and
FINRA. Furthermore, the proposed
deletion of the Rule Interpretations to
NYSE Rule 346 would remove
interpretations to an NYSE Rule that no
longer exists and would therefore
eliminate any potential confusion
among members or member
organizations regarding the applicability
of such Rule Interpretations. For these
reasons, the Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest, and
designates the proposed rule change to
be operative upon filing with the
Commission.19
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend 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:
39953
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 the filing will
also be available for inspection and
copying at the NYSE’s principal office
and on its Internet Web site at https://
www.nyse.com. All comments received
will be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–NYSE–
2011–26 and should be submitted on or
before July 28, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–16930 Filed 7–6–11; 8:45 am]
BILLING CODE 8011–01–P
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–2011–26 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–2011–26. 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
19 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 00143
Fmt 4703
Sfmt 4703
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64781; File No. SR–BATS–
2011–009]
Self-Regulatory Organizations; BATS
Exchange, Inc.; Notice of Filing of
Amendment No. 2 and Order Granting
Accelerated Approval to Proposed
Rule Change, as Modified by
Amendment Nos. 1 and 2 Thereto, to
Create, on a Six-Month Pilot Basis, a
Directed Order Program
June 30, 2011.
I. Introduction
On March 16, 2011, BATS Exchange,
Inc. (the ‘‘Exchange’’ or ‘‘BATS’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’),1 and
Rule 19b–4 thereunder,2 a proposal to
establish, on a six-month pilot basis, a
directed order (‘‘Directed Order’’)
program on its options facility (‘‘BATS
20 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\07JYN1.SGM
07JYN1
Agencies
[Federal Register Volume 76, Number 130 (Thursday, July 7, 2011)]
[Notices]
[Pages 39951-39953]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-16930]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64782; File No. SR-NYSE-2011-26]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Deleting the Text of NYSE Rule 409(f) and Adopting the Text of FINRA
Rule 2232 and Deleting the Rule Interpretations to NYSE Rule 346
June 30, 2011.
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 June 17, 2011, 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 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 et seq.
\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 (1) To delete the text of NYSE Rule 409(f)
and adopt the text of FINRA Rule 2232 and (2) delete the Rule
Interpretations to NYSE Rule 346. The text of the proposed rule change
is available at the Exchange, the Commission's Public Reference Room,
and https://www.nyse.com.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
[[Page 39952]]
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to (1) Delete the text of NYSE Rule 409(f)
and adopt the text of FINRA Rule 2232 and (2) delete the Rule
Interpretations to NYSE Rule 346.
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.\4\ 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\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 62970 (Sept. 22,
2010), 75 FR 59771 (Sept. 28, 2010) (order approving SR-FINRA-2010-
37).
\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.
---------------------------------------------------------------------------
NYSE Rule 409(f) and FINRA Rule 2232
In connection with the rule consolidation efforts between the
Exchange and FINRA, the Commission has recently approved FINRA Rule
2232,\7\ which is modeled after NYSE Rule 409(f), NASD Rule 2230 and
NASD IM-2110-6.\8\ FINRA Rule 2232 requires member firms, at or before
the completion of any transaction in any security effected for or with
an account of a customer, to give or send to such customer written
notification (``confirmation'') in conformity with the requirements of
Rule 10b-10 under the Act. A confirmation given or sent pursuant to
FINRA Rule 2232 must further disclose (1) With respect to any
transaction in any NMS stock, as defined in Rule 600 of SEC Regulation
NMS, or any security subject to the reporting requirements of the FINRA
Rule 6600 Series, other than direct participation programs as defined
in FINRA Rule 6420, the settlement date of the transaction; and (2)
with respect to any transaction in a callable equity security, that (A)
the security is a callable equity security and (B) a customer may
contact the member for more information concerning the security.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 63150 (October 21,
2010), 75 FR 66173 (October 27, 2010) (SR-FINRA-2009-058). See also
Securities Exchange Act Release No. 63561 (December 16, 2010), 75 FR
80556 (December 22, 2010) (SR-FINRA-2010-066).
\8\ NYSE Rule 409(f) currently provides that confirmation of all
transactions in securities admitted to dealings on the Exchange,
sent by members or member organizations to their customers, shall
clearly set forth with a suitable legend the settlement date of each
transaction.
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The Exchange proposes to delete the text of NYSE Rule 409(f) \9\
and adopt the text of FINRA Rule 2232 as NYSE Rule 2232, with certain
technical changes. Specifically, for consistency with Exchange rules,
the Exchange proposes to change all references to ``members'' to
``member organizations.'' The Exchange also proposes to delete the text
of Commentary .20 to Rule 411, which will no longer be applicable after
the deletion of the text of NYSE Rule 409(f). The Exchange proposes
that these changes, including new NYSE Rule 2232, be effective on the
same date as FINRA makes FINRA Rule 2232 effective.\10\
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\9\ NYSE Rule 409(f) would be marked as ``Reserved'' until such
time as NYSE Rule 409 is fully harmonized with FINRA rules. The
Exchange notes that FINRA has proposed a rule change that would
result in the deletion of the remaining text of FINRA Incorporated
NYSE Rule 409. See Securities Exchange Act Release No. 59921 (May
14, 2009), 74 FR 23912 (May 21, 2009) (SR-FINRA-2009-028).
\10\ See FINRA Regulatory Notice 10-62. The implementation date
is currently scheduled for June 17, 2011. NYSE Amex also has
submitted a companion rule filing amending its rules in accordance
with FINRA's rule changes. See SR-NYSEAmex-2011-41.
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Rule Interpretations to NYSE Rule 346
The Exchange has previously submitted a proposed rule change with
the Commission that deleted NYSE Rule 346 (Limitations--Employment and
Association with Members and Member Organizations) and adopted new Rule
3270 (Outside Business Activities of Registered Persons) to correspond
with rule changes filed by FINRA and approved by the Commission.\11\ As
such, the Exchange also proposes to delete the Rule Interpretations to
NYSE Rule 346 in their entirety, which were also deleted by FINRA when
it deleted its Incorporated NYSE Rule 346. To harmonize Exchange Rule
Interpretations with FINRA's rule, the Exchange proposes that this
change be immediately effective upon filing.
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\11\ See Securities Exchange Act Release No. 64131 (March 28,
2011), 76 FR 18285 (April 1, 2011) (SR-NYSE-2011-12). See also
Securities Exchange Act Release No. 62762 (August 23, 2010), 75 FR
53362 (August 31, 2010) (order approving SR-FINRA-2009-042).
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\12\ in general, and furthers the objectives of Section
6(b)(5),\13\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system. Specifically, the Exchange
believes that the proposed rule change supports the objectives of the
Act by providing greater harmonization between NYSE Rules and FINRA
Rules of similar purpose, resulting in less burdensome and more
efficient regulatory compliance. 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. Additionally, the proposed deletion of the Rule
Interpretations to NYSE Rule 346 would result in the removal of
interpretations to an NYSE Rule that no longer exists and would
therefore eliminate any potential confusion among members or member
organizations regarding the applicability of such Rule Interpretations.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
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[[Page 39953]]
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 \14\ and Rule 19b-4(f)(6) thereunder.\15\
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.
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\14\ 15 U.S.C. 78s(b)(3)(A)(iii).
\15\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of the filing.\16\
However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. In its filing, the
Exchange notes that the proposal to add new NYSE Rule 2232 is
substantially similar to the rule that the Commission approved for
FINRA,\18\ and the proposal conforms the Exchange's Rules with those of
FINRA, in furtherance of the consolidation of the member firm
regulation functions of NYSE, NYSE Amex Equities, and FINRA.
Furthermore, the proposed deletion of the Rule Interpretations to NYSE
Rule 346 would remove interpretations to an NYSE Rule that no longer
exists and would therefore eliminate any potential confusion among
members or member organizations regarding the applicability of such
Rule Interpretations. For these reasons, the Commission believes that
waiving the 30-day operative delay is consistent with the protection of
investors and the public interest, and designates the proposed rule
change to be operative upon filing with the Commission.\19\
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\16\ Id.
\17\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to
the Commission written notice of its intent to file the proposed
rule change, along with a brief description and text of the proposed
rule change, at least five business days prior to the date of filing
of the proposed rule change, or such shorter time as designated by
the Commission. The Exchange has satisfied this requirement.
\18\ See note 6, supra.
\19\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend 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-2011-26 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-2011-26. 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 the filing will also be available for
inspection and copying at the NYSE's principal office and on its
Internet Web site at https://www.nyse.com. All comments received will be
posted without change; the Commission does not edit personal
identifying information from submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSE-2011-26 and should be submitted on
or before July 28, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-16930 Filed 7-6-11; 8:45 am]
BILLING CODE 8011-01-P