[Federal Register Volume 74, Number 150 (Thursday, August 6, 2009)]
[Notices]
[Pages 39353-39362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-18762]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60409; File No. 4-587]


Program for Allocation of Regulatory Responsibilities Pursuant to 
Rule 17d-2; Notice of Filing and Order Declaring Effective a Proposed 
Plan for the Allocation of Regulatory Responsibilities Among the 
Financial Industry Regulatory Authority, Inc., New York Stock Exchange 
LLC, NYSE Regulation, Inc. and NYSE Amex LLC

July 30, 2009.
    Notice is hereby given that the Securities and Exchange Commission 
(``Commission'' or ``SEC'') has issued an Order pursuant to Section 
17(d) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 
17d-2 thereunder \2\ approving and declaring effective a plan dated 
December 15, 2008 for the allocation of regulatory responsibilities 
(``17d-2 Plan'' or the ``Plan'') filed with the Commission on July 29, 
2009 pursuant to Rule 17d-2 of the Act, by the New York Stock Exchange 
LLC (``NYSE''), NYSE Regulation, Inc. (``NYSE Regulation''), NYSE Amex 
LLC (``NYSE Amex''), and the Financial Industry Regulatory Authority, 
Inc. (``FINRA'') (each individually, a ``Party'' and collectively, the 
``Parties'').
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    \1\ 15 U.S.C. 78q(d).
    \2\ 17 CFR 240.17d-2.
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I. Introduction

    Section 19(g)(1) of the Act,\3\ among other things, requires every 
self-regulatory organization (``SRO'') registered as either a national 
securities exchange or national securities association to examine for, 
and enforce compliance by, its members and persons associated with its 
members with the Act, the rules and regulations thereunder, and the 
SRO's own rules, unless the SRO is relieved of this responsibility 
pursuant to Section 17(d) or Section 19(g)(2) of the Act.\4\ Without 
this relief, the statutory obligation of each individual SRO could 
result in a pattern of multiple examinations of broker-dealers that 
maintain memberships in more than one SRO (``common members''). Such 
regulatory duplication would add unnecessary expenses for common 
members and their SROs.
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    \3\ 15 U.S.C. 78s(g)(1).
    \4\ 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2), respectively.
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    Section 17(d)(1) of the Act \5\ was intended, in part, to eliminate 
unnecessary multiple examinations and regulatory duplication.\6\ With 
respect to a common member, Section 17(d)(1) authorizes the Commission, 
by rule or order, to relieve an SRO of the responsibility to receive 
regulatory reports, to examine for and enforce compliance with 
applicable statutes, rules, and regulations, or to perform other 
specified regulatory functions.
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    \5\ 15 U.S.C. 78q(d)(1).
    \6\ See Securities Act Amendments of 1975, Report of the Senate 
Committee on Banking, Housing, and Urban Affairs to Accompany S. 
249, S. Rep. No. 94-75, 94th Cong., 1st Session 32 (1975).
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    To implement Section 17(d)(1), the Commission adopted two rules: 
Rule 17d-1 and Rule 17d-2 under the Act.\7\ Rule 17d-1 authorizes the 
Commission to name a single SRO as the designated examining authority 
(``DEA'') to examine common members for compliance with the financial 
responsibility requirements imposed by the Act, or by Commission or SRO 
rules.\8\ When an SRO has been named as a common member's DEA, all 
other SROs to which the common member belongs are relieved of the 
responsibility to examine the firm for compliance with the applicable 
financial responsibility rules. On its face, Rule 17d-1 deals only with 
an SRO's obligations to enforce member compliance with financial 
responsibility requirements. Rule 17d-1 does not relieve an SRO from 
its obligation to examine a common member for compliance with its own 
rules and provisions of the Federal securities laws governing matters 
other than financial responsibility, including sales practices and 
trading activities and practices.
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    \7\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
    \8\ See Securities Exchange Act Release No. 12352 (April 20, 
1976), 41 FR 18808 (May 7, 1976).
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    To address regulatory duplication in these and other areas, the 
Commission adopted Rule 17d-2 under the Act.\9\ Rule 17d-2 permits SROs 
to propose joint plans for the allocation of regulatory 
responsibilities with respect to their common members. Under paragraph 
(c) of Rule 17d-2, the Commission may declare such a plan effective if, 
after providing for appropriate notice and comment, it determines that 
the plan is necessary or appropriate in the public interest and for the 
protection of investors; to foster cooperation and coordination among 
the SROs; to remove impediments to, and foster the development of, a 
national market system and a national clearance and settlement system; 
and is in conformity with the factors set forth in Section 17(d) of the 
Act. Commission approval of a plan filed pursuant to Rule 17d-2 
relieves an SRO of those regulatory responsibilities allocated by the 
plan to another SRO.
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    \9\ See Securities Exchange Act Release No. 12935 (October 28, 
1976), 41 FR 49091 (November 8, 1976).
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II. Proposed Plan

    On January 17, 2008, NYSE Euronext, Inc. and The Amex Membership 
Corporation, a New York not-for-profit company and parent of the 
American Stock Exchange LLC (``Amex'') entered into an Agreement and 
Plan of Merger, whereby NYSE Euronext would acquire Amex and as a 
result, Amex would become a wholly-owned subsidiary of NYSE Group, Inc. 
and would be renamed ``NYSE Amex.'' \10\ In connection with the merger, 
the Commission approved proposed rule changes to permit the merger and 
related transactions, including the adoption of an operating agreement 
for NYSE Amex.\11\ The Commission also approved an NYSE Amex rule 
proposal to adopt new rules governing member organizations, member firm 
conduct, and equity trading.\12\ NYSE Amex's new membership and member 
conduct rules are closely modeled on, and largely identical to, 
existing NYSE membership and firm conduct rules,\13\ many of which are 
``common rules'' under the existing 17d-2 plan between NYSE and 
FINRA.\14\
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    \10\ On March 13, 2009, the exchange then known as NYSE 
Alternext U.S. LLC filed for immediate effectiveness a proposal to 
change its name to NYSE Amex LLC. See Securities Exchange Act 
Release No. 59575 (March 13, 2009), 74 FR 11803 (March 19, 2009) 
(SR-NYSEALTR-2009-24).
    \11\ See Securities Exchange Act Release No. 58673 (September 
29, 2008), 73 FR 57707 (October 3, 2008) (SR-Amex-2008-62 and SR-
NYSE-2008-60).
    \12\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex-2008-63).
    \13\ See id. at 58995.
    \14\ See id.; See also Securities Exchange Act Release No. 56148 
(July 26, 2007), 72 FR 42146 (August 1, 2007) (order declaring 
effective the plan between NYSE and FINRA).
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    The purpose of the Plan is to add NYSE Amex as a party to the 
existing 17d-2 plan by and among National Association of Securities 
Dealers, Inc.

[[Page 39354]]

(``NASD'') (n/k/a FINRA), NYSE, and NYSE Regulation without altering 
the scope of that plan. Accordingly, the proposed 17d-2 Plan is 
intended to reduce regulatory duplication for firms that are common 
members of either NYSE and FINRA or NYSE Amex and FINRA. Pursuant to 
the proposed 17d-2 Plan, FINRA would assume certain examination, 
enforcement, and surveillance responsibilities for members of either 
NYSE and FINRA or NYSE Amex and FINRA as well as the associated persons 
therewith (``Common Members'') with respect to certain rules.
    The text of the Plan delineates the proposed regulatory 
responsibilities with respect to the Parties. Included in the proposed 
Plan is Exhibit 1 (the ``List of Common Rules'') that lists every NYSE 
rule, and NYSE Amex Equities rule, for which FINRA would bear 
responsibility under the Plan for overseeing and enforcing with respect 
to Common Members.
    Specifically, under the 17d-2 Plan, FINRA would assume examination 
and enforcement responsibility relating to compliance by Common Members 
with the rules of NYSE and NYSE Amex that are substantially similar to 
the applicable rules of FINRA (``Common Rules'').\15\ The 17d-2 Plan 
would not include the application of any Common Rule to the extent that 
it pertains to matters covered by a separate agreement under Rule 17d-
2.\16\ In the event that a Common Member is the subject of an 
investigation, examination, or enforcement proceeding, the 17d-2 Plan 
acknowledges that any Party may, in its discretion, exercise concurrent 
jurisdiction.\17\
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    \15\ See paragraph 1(a) of the proposed 17d-2 Plan.
    \16\ See, e.g., the Multiparty Agreement made pursuant to Rule 
17d-2 of the Exchange Act among the American Stock Exchange LLC, the 
BATS Exchange, Inc., the Boston Stock Exchange, Inc., the CBOE Stock 
Exchange, LLC, the Chicago Stock Exchange, Inc., Financial Industry 
Regulatory Authority, Inc., the International Securities Exchange, 
LLC, the NASDAQ Stock Market LLC, the National Stock Exchange, Inc., 
the New York Stock Exchange, LLC, NYSE Arca Inc., NYSE Regulation, 
Inc., and the Philadelphia Stock Exchange, Inc., approved by the 
Commission on October 17, 2008, as may be amended from time to time, 
involving the allocation of regulatory responsibilities with respect 
to common members for compliance with the surveillance, 
investigation, and enforcement of common insider trading rules. See 
Securities Exchange Act Release No. 58806 (October 17, 2008), 73 FR 
63216 (October 23, 2008); see also paragraph 20 of the proposed 17d-
2 Plan.
    \17\ See paragraph 7 of the proposed 17d-2 Plan.
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    While NYSE Amex has adopted a number of NYSE member firm conduct 
rules, NYSE Amex equities rules do not include all NYSE rules.\18\ 
Accordingly, certain Common Rules between NYSE and FINRA that have not 
been adopted by NYSE Amex (e.g., NYSE Rule 414 and the NYSE Series 700 
Rules) will not be Common Rules among NYSE, NYSE Amex, and FINRA. In 
addition, certain other NYSE Amex equities trading rules that qualify 
as Common Rules have been modified to reflect the difference in 
products trading at NYSE Amex (e.g., NYSE Amex Equities Rules 345 
(Employees--Registration, Approval, Records) and 408 (Discretionary 
Power in Customers' Accounts)).
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    \18\ For example, NYSE Amex has not adopted rules based on the 
following NYSE products: Cabinet Securities (NYSE Rule 85), Options 
(NYSE Series 700 Rules), Index and Currency Warrants (NYSE Rule 
414), and Basket Trades (NYSE Series 800 Rules).
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    Under the Plan, each of NYSE and NYSE Amex would retain full 
responsibility for surveillance and enforcement with respect to trading 
activities or practices involving the systems and facilities of the 
respective exchange. Each of NYSE and NYSE Amex also would retain 
regulatory responsibility for examinations of conduct or action of a 
Common Member that is not covered under the Common Rules and/or by 
related Federal regulations or laws; processing of applications for 
membership in the respective exchange; qualification and registration 
of member firm personnel to effect transactions on the floor of the 
exchange; and regulatory responsibility for the application of any 
Common Rule as it pertains to matters other than member firm 
regulation.\19\
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    \19\ See paragraphs 2(d) and 2(e) of the proposed 17d-2 Plan.
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    The text of the proposed 17d-2 Plan is as follows:
* * * * *

Agreement by and Among Financial Industry Regulatory Authority, Inc., 
New York Stock Exchange LLC, NYSE Regulation, Inc., and NYSE Amex LLC 
Pursuant to SEC Rule 17d-2 Promulgated by the Securities and Exchange 
Commission Under the Securities Exchange Act of 1934

    This Agreement, (``Agreement'') by and among Financial Industry 
Regulatory Authority, Inc., a Delaware non-stock, not-for-profit 
membership corporation (``FINRA''), New York Stock Exchange LLC, a New 
York limited liability company (``NYSE LLC''), NYSE Regulation, Inc., a 
New York not-for-profit corporation and an indirectly wholly-owned 
subsidiary of NYSE Group, Inc. (``NYSE Regulation''), and NYSE Amex LLC 
(``NYSE Amex''), a Delaware limited liability company and wholly-owned 
subsidiary of NYSE Group, Inc. (herein collectively referred to as the 
``Participants''), dated as of December 15, 2008, pursuant to the 
provisions of Rule 17d-2 promulgated by the Securities and Exchange 
Commission (the ``Commission'') under the Securities Exchange Act of 
1934, as amended (the ``Act''), which authorizes agreements between 
self-regulatory organizations for plans to reduce or eliminate 
regulatory duplication.
    This Agreement amends and restates the agreement entered into among 
National Association of Securities Dealers, Inc. (``NASD'' n/k/a 
FINRA), NYSE LLC, and NYSE Regulation on July 30, 2007, entitled 
``Agreement between National Association of Securities Dealers, Inc., 
New York Stock Exchange LLC, and NYSE Regulation, Inc., pursuant to SEC 
Rule 17d-2 promulgated by the Securities and Exchange Commission under 
the Securities Exchange Act of 1934'' (the ``July 30, 2007 
Agreement'').
    Whereas, NYSE Euronext, a Delaware corporation and the parent 
entity of NYSE Group (as hereinafter defined), and The Amex Membership 
Corporation, a New York not-for-profit corporation and parent company 
of the American Stock Exchange LLC (``Amex''), entered into an 
Agreement and Plan of Merger, dated January 17, 2008 (``Merger 
Agreement''), whereby, through a series of mergers, on October 1, 2008, 
NYSE Euronext acquired Amex (``Merger Transaction'') and as a result of 
these mergers, Amex became a wholly-owned subsidiary of NYSE Group and 
was renamed NYSE Amex; and
    Whereas, the Participants are desirous of reducing duplication in 
the regulation of broker-dealer firms and associated persons therewith 
that are members of NYSE, NYSE Amex, and FINRA (``Common Members'') and 
allocating regulatory responsibilities with respect to such Common 
Members and for which they are subject to Common Rules (as hereinafter 
defined); and
    Whereas, the Participants intend that FINRA will perform various 
functions formerly performed by NYSE Regulation; and
    Whereas, the Participants intend this Agreement to describe the 
functions to be performed by FINRA pursuant to Section 17(d) of the Act 
and Rule 17d-2 promulgated thereunder, and intend to file such with the 
Commission for its approval.
    Now, therefore, in consideration of the foregoing, the mutual 
covenants contained hereinafter, and other good and valuable 
consideration, the Participants hereby agree as follows:

[[Page 39355]]

1. Assumption of Regulatory Responsibilities
    (a) On the effective date, which shall be the date that the 
Commission has declared effective this Agreement, FINRA will assume 
regulatory responsibilities for all Common Members for the list of 
rules attached as Exhibit 1 (``Common Rules'') to this Agreement and 
made part hereof including examination, enforcement and surveillance 
responsibilities for such Common Rules to the extent that such 
responsibilities involve member firm regulation (the ``Regulatory 
Responsibilities''). The Participants agree that the NYSE and NYSE Amex 
rules listed on Exhibit 1 are identical or substantially similar to the 
corresponding FINRA rule.
    (b) FINRA shall not charge NYSE or NYSE Amex for performing the 
Regulatory Responsibilities except for the reasonable notification 
expenses and travel and out-of-pocket expenses, as provided in 
paragraphs 4(c) and 5.
2. Scope of Regulatory Responsibilities
    (a) Whenever a Participant proposes to make a change to the 
substance of any of the Common Rules, before filing such proposal with 
the SEC, it shall inform the other Participants to determine whether 
the other Participants will agree to promptly propose a conforming 
change to its version of the Common Rule. In the event the Participants 
do not agree to propose conforming changes, the Participants agree that 
they will file with the SEC for approval an amendment to this Agreement 
deleting such rule from the list of Common Rules, such amendment to be 
effective no earlier than the date of SEC approval of the change to the 
Common Rule proposed by the NYSE, NYSE Amex, or FINRA, as the case may 
be.
    (b) Common Rulebook. FINRA intends to create a single set of Rules 
to replace the FINRA NASD Rules and the NYSE Rules incorporated by 
FINRA. There is a substantial likelihood that each FINRA rule that 
would replace an existing NYSE Rule incorporated by FINRA and 
applicable to Common Members would be substantially different from the 
then-existing NYSE Rule or NYSE Amex Rule. In such case, pursuant to 
paragraph 2(a) above, NYSE and NYSE Amex would need to file with the 
Commission a proposal to amend their respective corresponding Rules to 
conform to the new FINRA Rule. As provided in Section 13, the 
Participants may make certain amendments to the list of Common Rules in 
Exhibit 1 without constituting an amendment to this Agreement.
    (c) Each year within 30 days of the anniversary date of Commission 
approval of this Agreement, or more frequently if required by changes 
in the rules of a Participant, NYSE and NYSE Amex will submit to FINRA 
an updated list of Common Rules for review. This updated list may add 
to Exhibit 1 rules that qualify as Common Rules, shall delete from 
Exhibit 1 rules of that Participant that are no longer identical or 
substantially similar to the Common Rules, and shall confirm that the 
remaining rules of the Participant included on Exhibit 1 continue to 
qualify as Common Rules. Within 30 days from the date that FINRA has 
received revisions to Exhibit 1, FINRA shall confirm in writing to NYSE 
and NYSE Amex whether the rules listed in Exhibit 1 are Common Rules.
    (d) Notwithstanding anything contained in this Agreement to the 
contrary, NYSE shall retain regulatory responsibility for the following 
(collectively, the ``NYSE Retained Responsibilities''):
    (i) Examinations of conduct or action by a Common Member that is 
otherwise covered by NYSE rules that are not Common Rules (the ``NYSE-
only Rules'') and/or by related Federal laws or regulations;
    (ii) Surveillance of, and investigation and enforcement with 
respect to, conduct or action undertaken in connection with trading on 
or through the systems and facilities of the NYSE, or conduct or 
actions by a Common Member that are otherwise covered by NYSE-only 
Rules, additionally, in all such cases, surveillance, investigation and 
enforcement with respect to how such conduct may constitute a violation 
of applicable Federal laws or regulations;
    (iii) Processing of applications for trading licenses or other 
indicia of membership in the NYSE, including without limitation 
applying NYSE's rules relating to the rights and obligations of Common 
Members that hold a trading license to effect transactions on the floor 
of the NYSE or through any systems or facilities of the NYSE;
    (iv) Qualification and registration of member firm personnel to 
effect transactions or work as Floor employees on the Floor of the 
NYSE, pursuant to the NYSE's applicable rules regarding qualifications 
and registration; and
    (v) The application of any Common Rule as it pertains to matters 
other than member firm regulation, including matters relating to NYSE's 
exclusive responsibility for (ii)-(iv) above (the ``Non-Exclusive 
Common Rules''). The Participants have identified the Non-Exclusive 
Common Rules, which are specifically designated on Exhibit 1, as those 
rules for which both NYSE and FINRA will bear responsibility when 
performing their respective regulatory responsibilities.
    (e) Notwithstanding anything contained in this Agreement to the 
contrary, NYSE Amex shall retain regulatory responsibility for the 
following (collectively, the ``NYSE Amex Retained Responsibilities''):
    (i) Examinations of conduct or action by a Common Member that is 
otherwise covered by NYSE Amex rules that are not Common Rules (the 
``NYSE Amex-only Rules'') and/or by related Federal laws or 
regulations;
    (ii) Surveillance of, and investigation and enforcement with 
respect to, conduct or action undertaken in connection with trading on 
or through the systems and facilities of the NYSE Amex, or conduct or 
actions by a Common Member that are otherwise covered by NYSE Amex-only 
Rules, additionally, in all such cases, surveillance, investigation and 
enforcement with respect to how such conduct may constitute a violation 
of applicable Federal laws or regulations;
    (iii) Processing of applications for trading licenses or other 
indicia of membership in the NYSE Amex, including without limitation 
applying NYSE Amex rules relating to the rights and obligations of 
Common Members that hold a trading license to effect transactions on 
the floor of the NYSE Amex or through any systems or facilities of the 
NYSE Amex;
    (iv) Qualification and registration of member firm personnel to 
effect transactions or work as Floor employees on the Floor of the NYSE 
Amex, pursuant to the NYSE Amex's applicable rules regarding 
qualifications and registration; and
    (v) The application of any Common Rule as it pertains to matters 
other than member firm regulation, including matters relating to NYSE 
Amex's exclusive responsibility for (ii)-(iv) above (the ``Non-
Exclusive Common Rules''). The Participants have identified the Non-
Exclusive Common Rules, which are specifically designated on Exhibit 1, 
as those rules for which both NYSE Amex and FINRA will bear 
responsibility when performing their respective regulatory 
responsibilities.
3. Violations
    (a) Should FINRA become aware of potential violations of another 
Participant's rules that are not within the scope of the Regulatory 
Responsibilities, FINRA will promptly notify the other Participant of 
those

[[Page 39356]]

potential violations, and such matters will be handled by the 
Participant responsible for those regulatory responsibilities.
    (b) Should a Participant other than FINRA become aware of potential 
violations of Common Rules, the Participant will promptly notify FINRA 
of those potential violations, and such matters will be handled by 
FINRA as provided in this Agreement.
4. Applications for, Qualification for, and Termination of, Membership
    (a)(i) Common Members subject to this Agreement will be required to 
submit to FINRA, and FINRA will be responsible for processing, and 
acting upon, all applications (each an ``Application'') submitted on 
behalf of the Common Member and any individual associated with such 
Common Member required to be approved by the rules of NYSE, NYSE Amex, 
and FINRA (collectively, an ``Applicant'').
    (ii) Promptly upon receipt of any complete Application, but in any 
event no later than seven (7) business days thereafter, FINRA shall 
advise NYSE and NYSE Amex of the qualifications and registration status 
of the Applicant required to be approved pursuant to the rules of NYSE, 
NYSE Amex, and FINRA. The NYSE and NYSE Amex each reserve the right to 
require additional qualifications or registrations prior to approving 
an Applicant as a member of the NYSE and NYSE Amex, pursuant to the 
process described in NYSE and NYSE Amex rules.
    (b) FINRA shall promptly advise NYSE and NYSE Amex of information 
regarding changes in status of any person required to be approved 
pursuant to the rules of NYSE, NYSE Amex, and FINRA that relates to a 
statutory disqualification, involuntary termination from employment or 
any other submission made to FINRA pursuant to Incorporated NYSE Rule 
351(a)-(c). The NYSE and NYSE Amex each reserve the right to disqualify 
a member pursuant to the process described in their respective rules.
    (c) Common Members will be required to send to FINRA all letters, 
termination notices or other material respecting persons required to be 
approved pursuant to the rules of NYSE, NYSE Amex, and FINRA. When as a 
result of processing said submissions FINRA becomes aware of a 
statutory disqualification as defined in the Act with respect to a 
Common Member or person associated with a Common Member, FINRA will 
determine pursuant to Section 15A(g) or 6(c) of the Act the 
acceptability or continued acceptability of the person to whom such 
disqualification applies but will not make a determination regarding 
NYSE or NYSE Amex membership or participation, or association of a 
person with an NYSE or NYSE Amex member. FINRA shall advise the other 
Participants in writing of its actions in this regard. The other 
Participants shall, within 30 days of receiving such information from 
FINRA, determine whether to permit a Common Member that has been 
determined to be statutorily disqualified by FINRA from becoming or 
remaining an NYSE or NYSE Amex member or a participant, or a person 
associated with a member. The other Participant will advise FINRA of 
its decision.
    The other Participant will reimburse FINRA for reasonable expenses 
incurred in notifying a Participant of FINRA's decision regarding a 
statutory disqualification under Section 15A(g) or Section 6(c) of the 
Act.
    FINRA will also be responsible for processing and, if required, 
acting upon all requests for the opening, address changes, and 
terminations of branch offices by Common Members and any other 
applications required of Common Members under the Common Rules.
5. Information Sharing
    The Participants agree to share information as follows:
    (a) General.
    A Participant shall promptly furnish to the other Participants any 
information that it determines indicates possible financial or 
operational problems that may affect the continued ability of any 
Common Member to conduct business.
    (b) Reports and Other Documents.
    A Participant shall upon request promptly make available to the 
other Participants at no cost any existing financial, operational, or 
related report filed with that Participant by a Common Member, as well 
as any existing files, information on customer complaints, termination 
notices, copies of an examination report, examination workpapers, 
investigative material, enforcement referrals or other documents 
involving compliance with the Federal securities laws and regulations 
and the rules of the Participants by the Common Member, or other 
documents in the possession of the Participant relating to the Common 
Member as necessary to assist the other Participants in fulfilling 
their Retained Responsibilities.
    (c) Third-party Complaints.
    If a Participant receives a copy of a complaint from any third 
party, including but not limited to a report from a Common Member 
pursuant to FINRA Incorporated NYSE Rule 351 or NYSE Amex Equities Rule 
351, relating to possible violations by a Common Member or persons 
associated with a Common Member that is not within the scope of that 
Participant's regulatory responsibilities and is within the scope of 
another Participant's regulatory responsibilities, that Participant 
shall promptly forward to the other Participant copies of such 
complaints. The Participant with the regulatory responsibilities vis-
[agrave]-vis such complaint shall have responsibility to review and 
take any appropriate action with respect to such complaint.
    (d) Information on Formal and Informal Discipline.
    A Participant shall promptly make available to the other 
Participants information on (1) formal disciplinary actions taken by 
that Participant involving a Common Member or persons associated with a 
Common Member; and (2) informal disciplinary actions taken by that 
Participant involving a Common Member. For purposes of this paragraph 
(d), informal disciplinary actions shall mean Cautionary Actions and 
MRVP (if FINRA) and Letters of Education, Letters of Admonition, and 
Summary Fines (if NYSE or NYSE Amex).
    (e) Participants to Make Personnel Available as Witnesses.
    A Participant shall make its personnel available to the other 
Participants to serve as testimonial or non-testimonial witnesses as 
necessary to assist the respective Participant in fulfilling the self-
regulatory responsibilities retained by it under this Agreement. The 
Participant requiring the services of such witnesses shall pay all 
reasonable travel and other out-of-pocket expenses incurred by the 
other Participant's employees to the extent that the requesting 
Participant requires such employees to serve as a witness, and provide 
information or other assistance pursuant to this Agreement.
    (f) Confidentiality. The Participants agree that documents or 
information shared shall be held in confidence, and be used only for 
the purposes of carrying out their respective regulatory obligations. 
No Participant shall assert regulatory or other privileges as against 
the others with respect to documents or information that is required to 
be shared pursuant to this Agreement.
    (g) No Waiver of Privilege. The sharing of documents or information 
among the Participants pursuant to this Agreement shall not be deemed a 
waiver as against third parties of regulatory or other privileges 
relating to the discovery of documents or information.

[[Page 39357]]

    (h) Periodic Meetings. The Participants agree that they shall 
conduct regular joint meetings among them for the purposes of reporting 
on the conduct of the Regulatory Responsibilities and current 
investigations involving significant rule violations by a Common 
Member, and identifying issues or concerns with respect to the 
regulation of Common Members.
6. Arbitration of Disputes Under This Agreement
    (a) Regulatory Services Manager. The Participants hereby each 
appoint the employee identified on Exhibit 2 hereto as its respective 
Regulatory Services Manager (the ``Regulatory Services Manager'') to, 
among other things, resolve disputes pursuant to Section 6(b) of this 
Agreement and oversee day-to-day management of the services and 
activities contemplated by this Agreement. On reasonable prior written 
notice to the other, the Participants shall each have the right to 
replace its respective Regulatory Services Manager with an employee or 
officer with comparable knowledge, expertise and decision-making 
authority.
    (b) Dispute Resolution. Except as otherwise expressly set forth in 
this Agreement, any dispute arising out of or relating to this 
Agreement shall be submitted for resolution to the Regulatory Services 
Managers. In the event the Regulatory Services Managers fail to resolve 
a dispute pursuant to this Section 6(b) within a reasonable time of 
receiving notice of such dispute from a Participant, then the 
Participants shall refer the dispute to the employee identified on 
Exhibit 2 as its respective Senior Officer (the ``Senior Officer'') and 
such Senior Officers shall attempt in good faith to conclusively 
resolve any such dispute. On reasonable prior written notice to the 
other, the Participants shall each have the right to replace its 
respective Senior Officer with an officer with comparable rank, 
knowledge, expertise and decision-making authority. If the Senior 
Officers are unable to resolve the dispute amicably within 30 days, the 
dispute will be resolved by binding arbitration between or among the 
Participants as provided herein. Arbitration shall be conducted by a 
single arbitrator agreed upon by the Participants in accordance with 
the arbitration rules of the American Arbitration Association (the 
``AAA''); provided, that, if the Participants cannot agree on the 
identity of the arbitrator, then the arbitrator shall be chosen by the 
AAA in accordance with its rules. All arbitration hearings shall be 
conducted in New York, New York. Each Participant shall pay its own 
costs for the arbitration, with the cost of the arbitrator to be 
equally divided between or among the Participants; provided, that the 
arbitrator may, in his or her discretion, award reasonable attorneys' 
fees and expenses to the prevailing Participant. The arbitrator will 
have no authority to award punitive damages or any other damages not 
measured by the prevailing Participant's actual damages, and may not, 
in any event, make any ruling, finding or award that does not conform 
to the terms and conditions of this Agreement. A judgment upon an award 
may be entered in any court having jurisdiction. No Participant or the 
arbitrator may disclose the existence, content, or results of any 
arbitration hereunder without the prior written consent of the other 
Participants, other than to the Commission. Except as otherwise 
expressly set forth in this Agreement, the procedures set forth in this 
Section 6(b) must be satisfied as a condition precedent to a 
Participant commencing any arbitration in connection with any dispute 
arising hereunder. A Participant's failure to comply with the preceding 
sentence shall constitute cause for the dismissal without prejudice of 
any such arbitration.
    (c) Continuity of Services. Each Participant acknowledges that the 
timely and complete performance of its obligations pursuant to this 
Agreement is critical to the business and operations of the other 
Participants. In the event of a dispute between or among the 
Participant, the Participants will continue to perform their respective 
obligations under this Agreement in good faith during the resolution of 
such dispute unless and until this Agreement is terminated in 
accordance with its provisions. Nothing in this Section 6(c) will 
interfere with a Participant's right to terminate this Agreement as set 
forth in this Agreement.
7. No Restrictions on Regulatory Action
    Nothing contained in this Agreement shall restrict or in any way 
encumber the right of a Participant to conduct its own independent or 
concurrent investigation, examination or enforcement proceeding of or 
against Common Members, as a Participant, in its sole discretion, shall 
deem appropriate or necessary.
8. Limitation of Liability
    None of the Participants nor any of their respective directors, 
governors, officers, employees, affiliates or agents shall be liable to 
any other Participants or such Participant's directors, governors, 
officers, employees, affiliates or agents for any liability, loss or 
damage resulting from any delays, inaccuracies, errors or omissions 
with respect to its performing or failing to perform its obligations 
under this Agreement, except as otherwise provided for under the Act or 
for any liability, loss or damage resulting from the gross negligence, 
willful misconduct, reckless disregard or breach of confidentiality by 
a Participant or its directors, governors, officers, employees, 
affiliates or agents. The Participants understand and agree with each 
other that the Regulatory Responsibilities are being performed on a 
good faith and best effort basis and no warranties, express or implied, 
are made by any Participant to any other Participant with respect to 
any of the obligations to be performed by the Participants hereunder.
9. Commission Approval
    (a) The Participants agree to file promptly this Agreement with the 
Commission for its review and approval. This Agreement shall be 
effective upon approval of the Commission.
    (b) If approved by the Commission, FINRA will notify Common Members 
of the general terms of the Agreement and its impact on such members. 
The notice will be sent on behalf of all Participants and, prior to 
being sent, NYSE and NYSE Amex will review and approve the notice.
10. Applicability of Certain Laws
    Notwithstanding any provision hereof, this Agreement shall be 
subject to any applicable Federal or State statute, or any rule or 
order of the Commission reassigning regulatory responsibilities between 
self-regulatory organizations. To the extent such statute, rule, or 
order is inconsistent with one or more provisions of this Agreement, 
such statute, rule, or order shall supersede the provision(s) hereof to 
the extent necessary to be properly effectuated and the provision(s) 
hereof in that respect shall be null and void.
11. Definitions
    Unless otherwise defined in this Agreement, or unless the context 
otherwise requires, the terms used in this Agreement shall have the 
same meaning as they have under the Act and the rules and regulations 
promulgated by the Commission thereunder.
12. Severability
    Any term or provision of this Agreement that is invalid or 
unenforceable in any jurisdiction shall, as to such jurisdiction, be 
ineffective to the extent of such invalidity or

[[Page 39358]]

unenforceability without rendering invalid or unenforceable the 
remaining terms and provisions of this Agreement or affecting the 
validity or enforceability of any of the terms or provisions of this 
Agreement in any other jurisdiction.
13. Amendment
    This Agreement may be amended in writing duly approved by each 
Participant. All such amendments, other than modifications to the list 
of Common Rules in Exhibit 1 pursuant to (i) a Commission order or 
other effective proposed rule change to FINRA approving the deletion of 
an NYSE Rule incorporated by FINRA or the creation of a FINRA rule to 
replace an NYSE Rule incorporated by FINRA, and (ii) a Commission order 
or other effective proposed rule change to NYSE or NYSE Amex approving 
the deletion of an NYSE or NYSE Amex Equities Rule or an amendment to 
an NYSE or NYSE Amex rule that makes such NYSE or NYSE Amex rule 
substantially identical to a FINRA rule, must be filed with and 
approved by the Commission before they become effective.
14. Termination
    This Agreement may be terminated by a Participant at any time upon 
the approval of the Commission after 180 days written notice to the 
other Participants.
15. General
    The Participants agree to perform all acts and execute all 
supplementary instruments or documents that may be reasonably necessary 
or desirable to carry out the provisions of this Agreement.
16. Liaison and Notices
    All questions regarding the implementation of this Agreement shall 
be directed to the persons identified in subsections (a), (b) and (c), 
as applicable, below. All notices and other communications required or 
permitted to be given under this Agreement shall be in writing and 
shall be deemed to have been duly given upon (i) actual receipt by the 
notified Participant or (ii) constructive receipt (as of the date 
marked on the return receipt) if sent by certified or registered mail, 
return receipt requested, to the following addresses:
    (a) If to NYSE Regulation: NYSE Regulation, Inc., 11 Wall Street, 
New York, New York 10005. Telephone: (212) 656-3000. Facsimile: (212) 
656-8101. Attention: General Counsel, Regulatory Services Manager.
    (b) If to New York Stock Exchange LLC: New York Stock Exchange LLC, 
11 Wall Street, New York, NY 10005. Telephone: (212) 656-3000. 
Facsimile: (212) 656-8101. Attention: General Counsel.
    (c) If to FINRA: Financial Industry Regulatory Authority, Inc., 
1735 K Street, NW., Washington, DC 20006-1500. Telephone: (202) 728-
8071. Facsimile: (202) 728-8075. Attention: General Counsel, Regulatory 
Services Manager.
    (d) If to NYSE Amex LLC: NYSE Amex LLC, 11 Wall Street, New York, 
NY 10005. Telephone: (212) 656-3000. Facsimile: (212) 656-8101. 
Attention: General Counsel, Regulatory Services Manager.
17. Relief From Regulatory Responsibility
    Pursuant to Section 17(d)(1)(A) of the Act, and Rule 17d-2 
thereunder, the Participants jointly request the SEC, upon its approval 
of this Agreement, to relieve the NYSE and NYSE Amex of any and all 
responsibilities with respect to the matters allocated to FINRA 
pursuant to this Agreement for purposes of Sections 17(d) and 19(g) of 
the Act.
18. Governing Law
    This Agreement shall be deemed to have been made in the State of 
New York, and shall be construed and enforced in accordance with the 
law of the State of New York, without reference to principles of 
conflicts of laws thereof. Each of the Participants hereby consents to 
submit to the jurisdiction of the courts by or for the State of New 
York or the United States District Court for the Southern District of 
New York in connection with any action or proceeding relating to this 
Agreement.
19. Survival of Provisions
    Provisions intended by their terms or context to survive and 
continue notwithstanding delivery of the regulatory services by FINRA, 
the payment of the price by the NYSE or NYSE Amex, and any termination 
of this Agreement shall survive and continue.
20. Prior Agreements
    This Agreement is wholly separate from: (a) The multiparty 
Agreement made pursuant to Rule 17d-2 of the Exchange Act among the 
American Stock Exchange LLC, the Boston Stock Exchange, Inc., the 
Chicago Board Options Exchange, Incorporated, the International 
Securities Exchange LLC, the National Association of Securities 
Dealers, Inc., the New York Stock Exchange, LLC, the NYSE Arca, Inc., 
and the Philadelphia Stock Exchange, Inc. involving the allocation of 
regulatory responsibilities with respect to common members for 
compliance with common rules relating to the conduct by broker-dealers 
of accounts for listed options or index warrants entered into on June 
5, 2008, and as may be amended from time to time; (b) the multiparty 
Agreement made pursuant to Rule 17d-2 of the Exchange Act among the 
American Stock Exchange LLC, the BATS Exchange, Inc. the Boston Stock 
Exchange, Inc., the CBOE Stock Exchange, LLC, the Chicago Stock 
Exchange, Inc., Financial Industry Regulatory Authority, Inc., the 
International Securities Exchange, LLC, the NASDAQ Stock Market LLC, 
the National Stock Exchange, Inc., the New York Stock Exchange, LLC, 
NYSE Arca Inc., NYSE Regulation, Inc., and the Philadelphia Stock 
Exchange, Inc., approved by the Commission on October 17, 2008, as may 
be amended from time to time, involving the allocation of regulatory 
responsibilities with respect to common members for compliance with the 
surveillance, investigation, and enforcement of common insider trading 
rules; and (c) the multiparty Agreement made pursuant to Rule 17d-2 of 
the Exchange Act among American Stock Exchange LLC, Boston Stock 
Exchange, Inc., Chicago Board Options Exchange, Incorporated, the 
International Securities Exchange LLC, Financial Industry Regulatory 
Authority, Inc., NYSE Arca, Inc., The NASDAQ Stock Market LLC, and the 
Philadelphia Stock Exchange, Inc. involving the allocation of 
regulatory responsibilities with respect to common members for 
compliance with common rules relating to certain options-related market 
surveillance matters entered into on March 31, 2008, as amended October 
1, 2008, and as may be amended from time to time.
21. Counterparts
    This Agreement may be executed in one or more counterparts, each of 
which shall be deemed an original, and such counterparts together shall 
constitute but one and the same instrument.
    In witness whereof, the Participants hereto have caused this 
Agreement to be executed by their respective officers thereunto duly 
authorized, as of the date first written above.

Financial Industry Regulatory Authority
By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------

New York Stock Exchange, LLC
By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------


[[Page 39359]]

-----------------------------------------------------------------------
Nyse Regulation, Inc.
By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------

NYSE AMEX LLC
By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------

Exhibit 1

List of Common Rules

    As referenced in paragraph 2(d)(v) of the Agreement, rules 
designated with a ``*'' are Non-Exclusive Common Rules, and NYSE and 
NYSE Amex shall retain regulatory responsibility for these rules 
insofar as necessary to discharge their respective Retained 
Responsibilities.

 
------------------------------------------------------------------------
                               NYSE Amex Equities
          NYSE Rule                   Rule               FINRA Rule
------------------------------------------------------------------------
*Rule 1 ``The Exchange''....  *Rule 1 ``The         NYSE Rule 1 ``The
                               Exchange''.           Exchange''.
*Rule 2 ``Member,''           *Rule 2 ``Member,''   NYSE Rule 2
 ``Membership,'' ``Member      ``Membership,''       ``Member,''
 Firm,'' etc.                  ``Member Firm,''      ``Membership,''
                               etc.                  ``Member Firm,''
                                                     etc.
*Rule 2A ``Jurisdiction''...  *Rule 2A              NYSE Rule 2A
                               ``Jurisdiction''.     ``Jurisdiction''.
*Rule 2B No Affiliation       *Rule 2B No           NYSE Rule 2B No
 between Exchange and any      Affiliation between   Affiliation between
 Member Organization.          Exchange and any      Exchange and any
                               Member Organization.  Member
                                                     Organization.
*Rule 3 ``Security''........  *Rule 3 ``Security''  NYSE Rule 3
                                                     ``Security''.
*Rule 4 ``Stock''...........  *Rule 4 ``Stock''...  NYSE Rule 4
                                                     ``Stock''.
*Rule 5 ``Bond''............  *Rule 5 ``Bond''....  NYSE Rule 5
                                                     ``Bond''.
*Rule 6 ``Floor''...........  *Rule 6 ``Floor''...  NYSE Rule 6
                                                     ``Floor''.
*Rule 8 ``Delivery''........  *Rule 8 ``Delivery''  NYSE Rule 8
                                                     ``Delivery''.
*Rule 9 ``Branch Office       *Rule 9 ``Branch      NYSE Rule 9 ``Branch
 Manager''.                    Office Manager''.     Office Manager''.
*Rule 10 ``Registered         *Rule 10              NYSE Rule 10
 Representative''.             ``Registered          ``Registered
                               Representative''.     Representative''.
*Rule 11 Effect of            *Rule 11 Effect of    NYSE Rule 11 Effect
 Definitions.                  Definitions.          of Definitions.
*Rule 12 ``Business Day''...  *Rule 12 ``Business   NYSE Rule 12
                               Day''.                ``Business Day''.
*Rule 134 Differences and     *Rule 134             NYSE Rule 134
 Omissions--Cleared            Differences and       Differences and
 Transactions.                 Omissions --.         Omissions--Cleared
                                                     Transactions.
Rule 176 Delivery Time......  Rule 176 Delivery     NYSE Rule 176
                               Time.                 Delivery Time.
Rule 177 Delivery Time--      Rule 177 Delivery     NYSE Rule 177
 ``Cash'' Contracts.           Time--``Cash''        Delivery Time--
                               Contracts.            ``Cash'' Contracts.
Rule 180 Failure to Deliver.  Rule 180 Failure to   NYSE Rule 180
                               Deliver.              Failure to Deliver.
Rule 282 Buy-in Procedures..  Rule 282 Buy-in       NYSE Rule 282 Buy-in
                               Procedures.           Procedures.
Rule 291 Failure to Fulfill   Rule 291 Failure to   NYSE Rule 291
 Closing Contract.             Fulfill Closing       Failure to Fulfill
                               Contract.             Closing Contract.
Rule 292 Restrictions on      Rule 292              NYSE Rule 292
 Members' Participation in     Restrictions on       Restrictions on
 Transaction to Close          Members'              Members'
 Defaulted Contracts.          Participation in      Participation in
                               Transaction to        Transaction to
                               Close Defaulted       Close Defaulted
                               Contracts.            Contracts.
Rule 293 Closing Contracts    Rule 293 Closing      NYSE Rule 293
 in Suspended Securities.      Contracts in          Closing Contracts
                               Suspended             in Suspended
                               Securities.           Securities.
Rule 294 Default in Loan of   Rule 294 Default in   NYSE Rule 294
 Money.                        Loan of Money.        Default in Loan of
                                                     Money.
Rule 296 Liquidation of       Rule 296 Liquidation  NYSE Rule 296
 Securities Loans and          of Securities Loans   Liquidation of
 Borrowings.                   and Borrowings.       Securities Loans
                                                     and Borrowings.
Rule 311 Formation and        Rule 311 Formation    NYSE Rule 311
 Approval of Member            and Approval of       Formation and
 Organizations.                Member                Approval of Member
                               Organizations.        Organizations.
Rule 312 Changes Within       Rule 312 Changes      NYSE Rule 312
 Member Organizations.         Within Member         Changes Within
                               Organizations.        Member
                                                     Organizations.
Rule 313 Submission of        Rule 313 Submission   NYSE Rule 313
 Partnership Articles--        of Partnership        Submission of
 Submission of Corporate       Articles--Submissio   Partnership
 Documents.                    n of Corporate        Articles--Submissio
                               Documents.            n of Corporate
                                                     Documents.
Rule 319 Fidelity Bonds.....  Rule 319 Fidelity     NYSE Rule 319
                               Bonds.                Fidelity Bonds.
Rule 321 Formation of         Rule 321 Formation    NYSE Rule 321
 Acquisition of Subsidiaries.  of Acquisition of     Formation of
                               Subsidiaries.         Acquisition of
                                                     Subsidiaries.
Rule 322 Guarantees by, or    Rule 322 Guarantees   NYSE Rule 322
 Flow Through Benefits for     by, or Flow Through   Guarantees by, or
 Members or Member             Benefits for          Flow Through
 Organizations.                Members or Member     Benefits for
                               Organizations.        Members or Member
                                                     Organizations.
*Rule 325 Capital             *Rule 325 Capital     NYSE Rule 325
 Requirements Members          Requirements          Capital
 Organizations.                Members               Requirements
                               Organizations.        Members
                                                     Organizations.
Rule 326(a) Growth Capital    Rule 326(a) Growth    NYSE Rule 326(a)
 Requirement.                  Capital Requirement.  Growth Capital
                                                     Requirement.
Rule 326(b) Business          Rule 326(b) Business  NYSE Rule 326(b)
 Reduction Capital             Reduction Capital     Business Reduction
 Requirement.                  Requirement.          Capital
                                                     Requirement.
Rule 326(c) Business          Rule 326(c) Business  NYSE Rule 326(c)
 Reduction Capital             Reduction Capital     Business Reduction
 Requirement.                  Requirement.          Capital
                                                     Requirement.
Rule 326(d) Reduction of      Rule 326(d)           NYSE Rule 326(d)
 Elimination of Loans and      Reduction of          Reduction of
 Advances.                     Elimination of        Elimination of
                               Loans and Advances.   Loans and Advances.
Rule 328 Sale-and-            Rule 328 Sale-and-    NYSE Rule 328 Sale-
 Leasebacks, Factoring,        Leasebacks,           and-Leasebacks,
 Financing and Similar         Factoring,            Factoring,
 Arrangements.                 Financing and         Financing and
                               Similar               Similar
                               Arrangements.         Arrangements.
*Rule 342 Offices--Approval,  *Rule 342 Offices--   NYSE Rule 342
 Supervision and Control.      Approval,             Offices--Approval,
                               Supervision and       Supervision and
                               Control.              Control.
Rule 343 Offices--Sole        Rule 343 Offices--    NYSE Rule 343
 Tenancy, Hours, Display of    Sole Tenancy,         Offices--Sole
 Membership Certificates.      Hours, Display of     Tenancy, Hours,
                               Membership            Display of
                               Certificates.         Membership
                                                     Certificates.
Rule 344 Research Analysts    Rule 344 Research     NYSE Rule 344
 and Supervisory Analysts.     Analysts and          Research Analysts
                               Supervisory           and Supervisory
                               Analysts.             Analysts.

[[Page 39360]]

 
Rule 345 Employees--          Rule 345 Employees--  NYSE Rule 345
 Registration, Approval,       Registration,         Employees--Registra
 Records.                      Approval, Records.    tion, Approval,
                                                     Records.
Rule 345A Continuing          Rule 345A Continuing  NYSE Rule 345A
 Education for Registered      Education for         Continuing
 Persons.                      Registered Persons.   Education for
                                                     Registered Persons.
Rule 346 Limitations--        Rule 346              NYSE Rule 346
 Employment and Association    Limitations--Employ   Limitations--Employ
 with Members and Member       ment and              ment and
 Organizations.                Association with      Association with
                               Members and Member    Members and Member
                               Organizations.        Organizations.
Rule 351 Reporting            Rule 351 Reporting    NYSE Rule 351
 Requirements.                 Requirements.         Reporting
                                                     Requirements.
Rule 352 Guarantees, Sharing  Rule 352 Guarantees,  NYSE Rule 352
 in Accounts, and Loan         Sharing in            Guarantees, Sharing
 Arrangements.                 Accounts, and Loan    in Accounts, and
                               Arrangements.         Loan Arrangements.
Rule 353 Rebates and          Rule 353 Rebates and  NYSE Rule 353
 Compensation.                 Compensation.         Rebates and
                                                     Compensation.
Rule 354 Reports to Control   Rule 354 Reports to   NYSE Rule 354
 Persons.                      Control Persons.      Reports to Control
                                                     Persons.
*Rule 375 Missing the Market  *Rule 375 Missing     NYSE Rule 375
                               the Market.           Missing the Market.
Rule 382 Carrying Agreements  Rule 382 Carrying     NYSE Rule 382
                               Agreements.           Carrying
                                                     Agreements.
Rule 387 COD Orders.........  Rule 387 COD Orders.  NYSE Rule 387 COD
                                                     Orders.
Rule 401A Customer            Rule 401A Customer    NYSE Rule 401A
 Complaints.                   Complaints.           Customer
                                                     Complaints.
Rule 402 Customer             Rule 402 Customer     NYSE Rule 402
 Protection--Reserves and      Protection--Reserve   Customer
 Custody of Securities.        s and Custody of      Protection--Reserve
                               Securities.           s and Custody of
                                                     Securities.
Rule 404 Individual Members   Rule 404 Individual   NASD Rule 1014.
 Not To Carry Accounts.        Members Not To
                               Carry Accounts.
Rule 405 Diligence as to      Rule 405 Diligence    NYSE Rule 405
 Accounts.                     as to Accounts.       Diligence as to
                                                     Accounts.
Rule 406 Designation of       Rule 406 Designation  NYSE Rule 406
 Accounts.                     of Accounts.          Designation of
                                                     Accounts.
*Rule 407 Transactions--      *Rule 407             NYSE Rule 407
 Employees of Members,         Transactions--Emplo   Transactions--Emplo
 Member Organizations and      yees of Members,      yees of Members,
 the Exchange.                 Member                Member
                               Organizations and     Organizations and
                               the Exchange.         the Exchange. \20\
*Rule 407A Disclosure of All  *Rule 407A            NYSE Rule 407A
 Member Accounts.              Disclosure of All     Disclosure of All
                               Member Accounts.      Member Accounts.
Rule 408 Discretionary Power  Rule 408              NYSE Rule 408
 in Customers' Accounts.       Discretionary Power   Discretionary Power
                               in Customers'         in Customers'
                               Accounts.             Accounts.
Rule 409 Statements of        Rule 409 Statements   NYSE Rule 409
 Accounts to Customers.        of Accounts to        Statements of
                               Customers.            Accounts to
                                                     Customers.
Rule 409A SIPC Disclosures..  Rule 409A SIPC        NYSE Rule 409A SIPC
                               Disclosures.          Disclosures.
*Rule 410 Records of Orders.  *Rule 410 Records of  NYSE Rule 410
                               Orders.               Records of Orders.
*Rule 411 Erroneous Reports.  *Rule 411 Erroneous   NYSE Rule 411
                               Reports.              Erroneous Reports.
Rule 412 Customer Account     Rule 412 Customer     NASD Rule 11870.
 Transfer Contracts.           Account Transfer
                               Contracts.
Rule 413 Uniform Forms......  Rule 413 Uniform      NYSE Rule 413
                               Forms.                Uniform Forms.
*Rule 416 Questionnaires and  *Rule 416             NYSE Rule 416
 Reports.                      Questionnaires and    Questionnaires and
                               Reports.              Reports.
*Rule 416A Member and Member  *Rule 416A Member     NYSE Rule 416A
 Organization Profile          and Member            Member and Member
 Information Updates and       Organization          Organization
 Quarterly Certifications      Profile Information   Profile Information
 Via The Electronic Filing     Updates and           Updates and
 Platform.                     Quarterly             Quarterly
                               Certifications Via    Certifications Via
                               The Electronic        the Electronic
                               Filing Platform.      Filing Platform.
Rule 418 Audit..............  Rule 418 Audit......  NYSE Rule 418 Audit.
Rule 420 Reports of           Rule 420 Reports of   NYSE Rule 420
 Borrowings and Subordinate    Borrowings and        Reports of
 Loans for Capital Purposes.   Subordinate Loans     Borrowings and
                               for Capital           Subordinate Loans
                               Purposes.             for Capital
                                                     Purposes.
Rule 421 Periodic Reports...  Rule 421 Periodic     NYSE Rule 421
                               Reports.              Periodic Reports.
Rule 430 Partial Delivery of  Rule 430 Partial      NYSE Rule 430
 Securities to Customers on    Delivery of           Partial Delivery of
 C.O.D. Purchases.             Securities to         Securities to
                               Customers on C.O.D.   Customers on C.O.D.
                               Purchases.            Purchases.
Rule 431 Margin Requirements  Rule 431 Margin       NYSE Rule 431 Margin
                               Requirements.         Requirements.
Rule 432 Daily Record of      Rule 432 Daily        NYSE Rule 432 Daily
 Required Margin.              Record of Required    Record of Required
                               Margin.               Margin.
Rule 434 Required Submission  Rule 434 Required     NYSE Rule 434
 of Requests for Extensions    Submission of         Required Submission
 of Time for Customers.        Requests for          of Requests for
                               Extensions of Time    Extensions of Time
                               for Customers.        for Customers.
*Rule 435 Miscellaneous       *Rule 435             NYSE Rule 435
 Prohibitions (Excessive       Miscellaneous         Miscellaneous
 Trading by Members).          Prohibitions          Prohibitions
                               (Excessive Trading    (Excessive Trading
                               by Members).          by Members).
*Rule 440 Books and Records.  *Rule 440 Books and   NYSE Rule 440 Books
                               Records.              and Records.
Rule 440A Telephone           Rule 440A Telephone   NYSE Rule 440A
 Solicitation.                 Solicitation.         Telephone
                                                     Solicitation.
Rule 440I Records of          Rule 440I Records of  NYSE Rule 440I
 Compensation Arrangements--   Compensation          Records of
 Floor Brokerage.              Arrangements--Floor   Compensation
                               Brokerage.            Arrangements--Floor
                                                     Brokerage.
Rule 445 Anti-Money           Rule 445 Anti-Money   NYSE Rule 445 Anti-
 Laundering Compliance         Laundering            Money Laundering
 Program.                      Compliance Program.   Compliance Program.
Rule 446 Business Continuity  Rule 446 Business     NASD Rule 3510
 and Contingency Plans.        Continuity and        Business Continuity
                               Contingency Plans.    Plans and NASD Rule
                                                     3520 Emergency
                                                     Contact
                                                     Information.
Rule 472 Communications with  Rule 472              NYSE Rule 472
 the Public.                   Communications with   Communications with
                               the Public.           the Public.
*Rule 3130 (Annual            *Rule 3130 (Annual    *Rule 3130 (Annual
 Certification of Compliance   Certification of      Certification of
 and Supervisory Processes).   Compliance and        Compliance and
                               Supervisory           Supervisory
                               Processes).           Processes). \21\
Rule 3220 (Influencing or     Rule 3220             Rule 3220
 Rewarding Employees of        (Influencing or       (Influencing or
 Others).                      Rewarding Employees   Rewarding Employees
                               of Others).           of Others).
Rule 4560 (Short-Interest     Rule 4560 (Short-     Rule 4560 (Short-
 Reporting).                   Interest Reporting).  Interest
                                                     Reporting).

[[Page 39361]]

 
*Rule 5190 (Notification      *Rule 5190            *Rule 5190
 Requirements for Offering     (Notification         (Notification
 Participants).                Requirements for      Requirements for
                               Offering              Offering
                               Participants).        Participants).\22\
*Rule 6140 (Other Trading     *Rule 6140 (Other     *Rule 6140 (Other
 Practices).                   Trading Practices).   Trading Practices).
------------------------------------------------------------------------

Exhibit 2

    For purposes of this Agreement, the Regulatory Services Managers 
required under paragraph 6 shall be:
---------------------------------------------------------------------------

    \20\ Those portions of the NYSE and NYSE Amex Equities Rules 
407(a) and 407.10 that concern Exchange employees, which differ from 
the FINRA Incorporated NYSE Rule 407, are not Common Rules and FINRA 
will not be allocated regulatory responsibility for compliance with 
those portions of the rules.
    \21\ Those portions of NYSE and NYSE Amex Equities Rule 
3130(c)(1), 3130.03, and 3130.10 that relate to compliance with 
Exchange Rules are not Common Rules and FINRA will not be allocated 
regulatory responsibility for compliance with those portions of the 
rules.
    \22\ Those portions of NYSE and NYSE Amex Equities Rules 
5190(c)(1) requiring notice to the Exchange and 5190(e) that relate 
to placing or transmitting a stabilizing bid or filing are not 
Common Rules and FINRA will not be allocated regulatory 
responsibility for compliance with those portions of the rules.
---------------------------------------------------------------------------

    For NYSE Regulation (on behalf of both NYSE and NYSE Amex): Clare 
F. Saperstein, Managing Director, NYSE Regulation, Inc., 20 Broad 
Street, 24th Floor, New York, NY 10005 (212) 656-2355 (phone). (212) 
656-2333 (fax).
    For FINRA: James F. Price, Jr., Senior Vice President, Business and 
Exchange Solutions, FINRA, 9509 Key West Avenue, Rockville, MD 20850-
33329. (240) 386-4608 (phone). (240) 386-5139 (fax).
    For purposes of this Agreement, the Senior Officers required under 
paragraph 6 shall be: For NYSE Regulation (on behalf of both NYSE and 
NYSE Amex): James F. Duffy, Interim Chief Executive Officer, NYSE 
Regulation, Inc., 11 Wall Street, New York, NY 10005. (212) 656-2789 
(phone). (212) 656-5809 (fax).
    For FINRA: Stephen I. Luparello, Senior Executive Vice President, 
FINRA, 1735 K Street, NW., Washington, DC 20006. (202) 728-6947 
(phone). (202) 728-8075 (fax).

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. Comments may be submitted by any of 
the following methods:

Electronic Comments

    <bullet> Use the Commission's Internet comment form (http://www.sec.gov/rules/other.shtml); or
    <bullet> Send an e-mail to <a href="/cdn-cgi/l/email-protection#8af8ffe6efa7e9e5e7e7efe4fef9caf9efe9a4ede5fc"><span class="__cf_email__" data-cfemail="c4b6b1a8a1e9a7aba9a9a1aab0b784b7a1a7eaa3abb2">[email protected]</span></a>. Please include 
File Number 4-587 on the subject line.

Paper Comments

    <bullet> Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number 4-587. 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 (http://www.sec.gov/rules/other.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed plan that are filed with the 
Commission, and all written communications relating to the proposed 
plan between the Commission and any person, other than those that may 
be withheld from the public in accordance with the provisions of 5 
U.S.C. 552, will be available for inspection and copying in the 
Commission's Public Reference Room, on official business days between 
the hours of 10 a.m. and 3 p.m. Copies of the plan also will be 
available for inspection and copying at the principal offices of FINRA, 
NYSE, and NYSE Amex. 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 4-
587 and should be submitted on or before August 27, 2009.

IV. Discussion

    Pursuant to paragraph (c) of Rule 17d-2,\23\ the Commission may, 
after appropriate notice and comment, declare a plan effective if the 
Commission finds that the plan is necessary or appropriate in the 
public interest and for the protection of investors, to foster 
cooperation and coordination among self-regulatory organizations, or to 
remove impediments to and foster the development of the national market 
system and a national system for the clearance and settlement of 
securities transactions and in conformity with the factors set forth in 
Section 17(d) of the Act.
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    \23\ 17 CFR 240.17d-2.
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    In this instance, the Commission believes that appropriate notice 
and comment can take place after the proposed Plan is effective. The 
purpose of this Plan is to add NYSE Amex as a party to the existing 
17d-2 plan between NYSE, NYSE Regulation, and FINRA. As NYSE Amex has 
adopted many of the NYSE rules covered by the existing plan,\24\ the 
proposed Plan does not change the scope of that existing plan. 
Consequently, the Commission does not believe that the Plan raises any 
new regulatory issues that the Commission has not previously considered 
in the context of the existing plan between NYSE, NYSE Regulation, and 
FINRA. By declaring the Plan effective today, the Commission can reduce 
regulatory duplication for common members of FINRA and NYSE Amex, the 
latter of which has adopted many of the NYSE rules crossed by the Plan, 
as it has done for common members of FINRA and NYSE, and the new Plan 
can be implemented without delay.
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    \24\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex-2008-63).
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    The Commission finds that the proposed Plan is consistent with the 
factors set forth in Section 17(d) of the Act \25\ and Rule 17d-2(c) 
thereunder \26\ in that the Plan is necessary or appropriate in the 
public interest and for the protection of investors, fosters 
cooperation and coordination among SROs, and removes impediments to and 
fosters the development of the national market system. In particular, 
the Commission believes that the Plan will reduce unnecessary 
regulatory duplication by fostering cooperation and coordination 
between NYSE, NYSE Amex, and FINRA, and will thereby remove impediments 
to the development of the national market system. In particular, the 
Plan will allocate to FINRA certain responsibilities for Common Members 
that would otherwise be performed by

[[Page 39362]]

both NYSE and FINRA or NYSE Amex and FINRA. Accordingly, the Plan 
promotes efficiency by reducing costs to Common Members. Furthermore, 
because FINRA, NYSE, and NYSE Amex will coordinate their regulatory 
functions in accordance with the Plan, the Plan should promote investor 
protection and the public interest.
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    \25\ 15 U.S.C. 78q(d).
    \26\ 17 CFR 240.17d-2(c).
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    In particular, the Commission notes that, under the proposed Plan, 
FINRA, NYSE, and NYSE Amex have allocated regulatory responsibility for 
Common Rules to the extent that such responsibilities involve member 
firm regulation. The Plan also sets forth those areas for which NYSE 
and NYSE Amex will retain regulatory responsibility, including: 
examinations of conduct or actions by a Common Member covered by NYSE-
only or NYSE Amex-only rules and/or by related Federal laws or 
regulations; surveillance, investigation, and enforcement with respect 
to conduct or action relating to trading on or through the systems and 
facilities of NYSE or NYSE Amex and conduct otherwise covered by NYSE-
only or NYSE Amex-only rules, as well as whether such conduct may 
constitute a violation of Federal laws or regulations; processing of 
applications for trading licenses or other membership in NYSE or NYSE 
Amex; and qualification and registration of member firm personnel to 
effect transactions or work on the floor of NYSE or NYSE Amex pursuant 
to such SRO's rules.\27\
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    \27\ See paragraphs 2(d)(i)-(iv) and (e)(i)-(iv) of the proposed 
17d-2 Plan.
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    In addition, the proposed Plan provides that NYSE and NYSE Amex 
will retain regulatory responsibility for the application of any Common 
Rule as it pertains to matters other than member firm regulation, 
including matters relating to such SRO's retained responsibilities as 
set forth in the Plan (the ``Non-Exclusive Common Rules''). The Non-
Exclusive Common Rules are specifically annotated in the List of Common 
Rules and include those rules for which FINRA, NYSE, and NYSE Amex will 
each bear their respective regulatory responsibilities, consistent with 
the scope of the 17d-2 Plan. Such rules are ``non-exclusive'' in the 
sense that they may relate to member firm regulation (for which FINRA 
would assume regulatory responsibility) as well as matters other than 
member firm regulation (for which NYSE or NYSE Amex would retain 
regulatory responsibility). Accordingly, NYSE and NYSE Amex will each 
bear responsibility for the application of their Non-Exclusive Common 
Rules concerning their particular regulatory responsibilities.
    According to the Plan, whenever any Party seeks to make a change to 
any of its rules that are Common Rules, before filing a proposed rule 
change with the Commission, it will inform the other Parties of the 
intended change to determine whether the other Parties will propose a 
conforming change to its version of the Common Rule. If the Parties do 
not agree to propose conforming changes, the Parties agree to file with 
the Commission an amendment to the 17d-2 Plan to delete such rule from 
the list of Common Rules.\28\ Finally, the proposed Plan requires the 
Parties annually (or more frequently if required by changes in the 
rules of a Party) to confirm in writing the accuracy of the list of 
Common Rules.\29\ This provision ensures that the Parties keep the 
Common Rules up-to-date vis-[agrave]-vis the other Parties and should 
facilitate the ability of the Parties to accurately administer their 
responsibilities under the proposed Plan consistent with the scope of 
the Plan declared effective by the Commission herein.
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    \28\ See paragraph 2(a) of the proposed 17d-2 Plan.
    \29\ See paragraph 2(c) of the proposed 17d-2 Plan.
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    The proposed Plan also requires the Parties to share information on 
a number of matters, including, for example, financial and operational 
matters of Common Members, third-party complaints, and disciplinary 
actions.\30\ The Commission believes that the information-sharing 
provisions contained in the proposed Plan fosters cooperation and 
coordination among the Parties, thereby promoting investor protection 
and removing impediments to the development of a national market 
system.
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    \30\ See paragraph 5 of the proposed 17d-2 Plan.
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    Finally, the Plan permits any Party to terminate the Plan at any 
time, subject to 180 days written notice to the other Parties and 
subject to Commission approval.\31\
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    \31\ See paragraph 14 of the proposed 17d-2 Plan. The Commission 
notes that, as reflected in paragraph 14, Commission approval is 
required for any Party to terminate its participation in the Plan.
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V. Conclusion

    This Order gives effect to the Plan filed with the Commission in 
File No. 4-587. The Parties shall notify all members affected by the 
Plan of their rights and obligations under the Plan.
    It is therefore ordered, pursuant to Section 17(d) of the Act,\32\ 
that the Plan, made by and among NYSE, NYSE Regulation, NYSE Amex, and 
FINRA, that is contained in File No. 4-587 and filed pursuant to Rule 
17d-2, is hereby approved and declared effective.
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    \32\ 15 U.S.C. 78q(d).
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    It is therefore ordered that NYSE and NYSE Amex are relieved of 
those responsibilities allocated to FINRA under the Plan in File No. 4-
587.
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    \33\ 17 CFR 200.30-3(a)(34).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\33\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-18762 Filed 8-5-09; 8:45 am]
BILLING CODE 8010-01-P


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