42714 Federal Register / Vol. 74, No. 162 / Monday, August 24, 2009 / Notices 

15 17 CFR 200.30–3(a)(12). 

1 15 U.S.C.78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b–4(f)(6). 

5See SR–NYSE–2009–75, formally submitted on 

July 28, 2009. 

6The Commission notes that this proposed rule 

change would also conform NYSE Amex Rules with 

a rule change recently filed by the Financial 

Industry Regulatory Authority, Inc. (‘‘FINRA’’) and 

approved by the Commission. See Securities 

Exchange Act Release No. 59947 (May 20, 2009), 74 

FR 25293 (May 27, 2009) (order approving FINRA 

2009–017). 

7See Securities Exchange Act Release No. 58673 

(September 29, 2008), 73 FR 57707 (October 3, 

2008) (SR–NYSE–2008–60 and SR–Amex 2008–62) 

(approving the Merger). 

8 15 U.S.C. 78f. 

9See Securities Exchange Act Release No. 58705 

(October 1, 2008), 73 FR 58995 (October 8, 2008) 

(SR–Amex 2008–63) (approving the Equities 

Relocation). 

10See Securities Exchange Act Release Nos. 

58705 (October 1, 2008), 73 FR 58995 (October 8, 

2008) (SR–Amex 2008–63); 58833 (October 22, 

2008), 73 FR 64642 (October 30, 2008) (SR–NYSE– 

2008–106); 58839 (October 23, 2008), 73 FR 64645 

(October 30, 2008) (SR–NYSEALTR–2008–03); 

59022 (November 26, 2008), 73 FR 73683 

(December 3, 2008) (SR–NYSEALTR–2008–10); and 

59027 (November 28, 2008), 73 FR 73681 

(December 3, 2008) (SR–NYSEALTR–2008–11). 

11See Securities Exchange Act Release No. 59947 

(May 20, 2009), 74 FR 25293 (May 27, 2009) (order 

approving FINRA 2009–017). 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–BSECC-2009-04 and should 

be submitted on or before September 14, 

2009. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–20193 Filed 8–21–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60511; File No. SR– 

NYSEAMEX–2009–51] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change by NYSE Amex LLC 

Adopting Rule 406—NYSE Amex 

Equities as New Rule 3250—NYSE 

Amex Equities To Conform to a 

Proposed Rule Change Submitted in a 

Companion Filing by the New York 

Stock Exchange LLC 

August 17, 2009. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on July 28, 

2009, NYSE Amex LLC (the ‘‘Exchange’’ 

or ‘‘NYSE Amex’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been 

substantially prepared by the selfregulatory organization. The Exchange 

has designated this proposal eligible for 

immediate effectiveness pursuant to 

Section 19(b)(3)(A) of the Act 3 and Rule 

19b–4(f)(6) thereunder.4 The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to adopt Rule 

406—NYSE Amex Equities (Designation 

of Accounts) as new Rule 3250—NYSE 

Amex Equities to conform to a proposed 

rule change submitted in a companion 

filing by the New York Stock Exchange 

LLC (‘‘NYSE’’).5 The text of the 

proposed rule change is available at the 

Exchange, the Commission’s Public 

Reference Room, and http:// 

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. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to adopt Rule 406 NYSE Amex 

Equities (Designation of Accounts) as 

new Rule 3250 NYSE Amex Equities to 

conform to a proposed rule change 

submitted in a companion filing by the 

NYSE.6

Background 

As described more fully in a related 

rule filing,7 NYSE Euronext acquired 

The Amex Membership Corporation 

(‘‘AMC’’) pursuant to an Agreement and 

Plan of Merger, dated January 17, 2008 

(the ‘‘Merger’’). In connection with the 

Merger, the Exchange’s predecessor, the 

American Stock Exchange LLC, a 

subsidiary of AMC, became a subsidiary 

of NYSE Euronext called NYSE 

Alternext U.S. LLC, and continues to 

operate as a national securities exchange 

registered under Section 6 of the Act.8

The effective date of the Merger was 

October 1, 2008. 

In connection with the Merger, on 

December 1, 2008, the Exchange 

relocated all equities trading conducted 

on the Exchange legacy trading systems 

and facilities located at 86 Trinity Place, 

New York, New York, to trading systems 

and facilities located at 11 Wall Street, 

New York, New York (the ‘‘Equities 

Relocation’’). The Exchange’s equity 

trading systems and facilities at 11 Wall 

Street (the ‘‘NYSE Amex Trading 

Systems’’) are operated by the NYSE on 

behalf of the Exchange.9

As part of the Equities Relocation, 

NYSE Amex adopted NYSE Rules 1– 

1004, subject to such changes as 

necessary to apply the Rules to the 

Exchange, as the NYSE Amex Equities 

Rules to govern trading on the NYSE 

Amex Trading Systems.10 The NYSE 

Amex Equities Rules, which became 

operative on December 1, 2008, are 

substantially identical to the current 

NYSE Rules 1–1004 and the Exchange 

continues to update the NYSE Amex 

Equities Rules as necessary to conform 

with rule changes to corresponding 

NYSE Rules filed by the NYSE. 

Proposed Conforming Amendment to 

NYSE Amex Equities Rules 

As noted above, the Exchange 

proposes to adopt Rule 406—NYSE 

Amex Equities as new Rule 3250— 

NYSE Amex Equities to conform to a 

proposed rule change submitted in a 

companion filing by the NYSE. As 

discussed in more detail below, the 

NYSE is filing the proposed rule change 

to harmonize the NYSE Rules with a 

change to corresponding Incorporated 

NYSE Rules filed by FINRA and 

approved by the Commission.11 Unless 

specifically noted, the Exchange is 

proposing to adopt the NYSE’s proposed 

rule change in the form that it has been 

approved for filing by the Commission, 

subject to such technical changes as are 

necessary to apply the NYSE’s proposed 

rule change to the Exchange. The 

Exchange further proposes that the 

operative date of the rule change be the 

same as the operative date of the NYSE’s 

proposed rule change on which this 

filing is based. 

Specifically, FINRA adopted FINRA 

Incorporated NYSE Rule 406 


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Federal Register / Vol. 74, No. 162 / Monday, August 24, 2009 / Notices 42715 

12 Id. As noted by FINRA, member organizations 

are subject to additional requirements regarding 

customer accounts under the Act. See, e.g., 17 CFR 

240.17a–3(a)(9) (requiring records indicating the 

name and address of the beneficial owner of cash 

and margin customer accounts). 

13See Securities Exchange Act Release No. 59947 

(May 20, 2009), 74 FR 25293 (May 27, 2009). 

14See SR–NYSE–2009–75, formally submitted on 

July 28, 2009. 

15 15 U.S.C. 78f(b). 

16 15 U.S.C. 78f(b)(5). 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

19For 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). 

(Designation of Accounts) as 

consolidated FINRA Rule 3250, subject 

to some minor technical changes. 

FINRA Rule 3250 provides that no 

member shall carry an account on its 

books in the name of a person other 

than that of the customer. However, an 

account may be designated by a number 

or symbol, provided the member 

organization has a written statement of 

ownership signed by the customer.12

FINRA adopted FINRA Incorporated 

NYSE Rule 406 (Designation of 

Accounts) as consolidated FINRA Rule 

3250 because it believes the Rule is an 

important enforcement tool used to 

address, inter alia, sales practice abuses, 

including commingling of funds, failure 

to disclose ownership interests in 

accounts and unauthorized trading, and 

should be applied to all FINRA 

members. In addition, the Rule provides 

customers and their accounts with a 

level of anonymity that may be useful 

while still permitting identification to 

the member organization carrying the 

account as well as regulators. Upon 

adoption of Rule 3250, FINRA made 

minor technical changes to apply the 

Rule to all FINRA members, replacing 

the terms ‘‘member organization’’ or 

‘‘organization’’ with the term 

‘‘member.’’ 13

To harmonize the NYSE Rules with 

the approved FINRA Rules, NYSE 

correspondingly proposes to adopt 

NYSE Rule 406 as new Rule 3250, 

which is substantially similar to the 

new FINRA rule. As proposed, NYSE 

Rule 3250 adopts the same language as 

FINRA Rule 3250, except for retaining 

or adding, as needed, the term ‘‘member 

organization’’ and making 

corresponding technical changes. As 

with the consolidated FINRA Rule, 

under proposed NYSE Rule 3250 

Exchange member organizations will be 

required to carry customer accounts in 

the name of the customer, except that an 

account may be designated by a number 

or symbol, as long as the member 

maintains documentation identifying 

the customer.14

The Exchange proposes to 

correspondingly adopt Rule 406—NYSE 

Amex Equities as new Rule 3250— 

NYSE Amex Equities in the form 

proposed by the NYSE. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,15 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act,16 in particular, in that it is 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, if 

consistent with the protection of 

investors and the public interest, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 17 and Rule 19b– 

4(f)(6) thereunder.18

The Exchange has requested that the 

Commission waive the 30-day operative 

delay so that the proposal may become 

operative immediately upon filing. The 

Commission has determined that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest 

because such waiver will ensure the 

elimination of any potential regulatory 

gap among the Exchange’s, the NYSE’s 

and FINRA’s rules. Therefore, the 

Commission designates the proposal 

operative upon filing.19

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–NYSEAMEX–2009–51 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–2009–51. 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/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of the filing will also be available 


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42716 Federal Register / Vol. 74, No. 162 / Monday, August 24, 2009 / Notices 

20 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The Commission has modified the text of the 

summaries prepared by FICC. 

4 VaR is defined as the maximum amount of 

money that may be lost on a given portfolio over 

a given period of time within a given level of 

confidence. 

5Accordingly, GSD invoked its emergency power 

to adjust CC to IDB transactions in November 2008 

and conducted a review of the current margin 

methodology as applied to IDB activity. As a result, 

CC currently is not calculated with respect to interdealer broker repo transactions, and GSD has 

recently adjusted the CC charge with respect to 

certain cash IDB transactions on a temporary basis. 

6Margin calculated for all other activity is based 

on a three-day liquidation horizon. 

7U.S.C. 78q–1. 

for inspection and copying at the 

principal office of the Exchange and on 

its Web site at http://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–2009–51 and 

should be submitted on or before 

September 14, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–20198 Filed 8–21–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60510; File No. SR–FICC– 

2009–08] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Filing and Order Granting Accelerated 

Approval on a Temporary Basis of 

Proposed Rule Change To Modify the 

Rules of the Government Securities 

Division Regarding the Calculation of 

Clearing Fund Deposits Relating to 

Inter-Dealer Broker Positions 

August 17, 2009. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder 2

notice is hereby given that on August 

10, 2009, the Fixed Income Clearing 

Corporation (‘‘FICC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change described in Items I, II, and III 

below, which items have been prepared 

primarily by FICC. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested parties and is granting 

accelerated approval of the proposal 

through August 20, 2010. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The proposed rule change seeks to 

modify the rules of FICC’s Government 

Securities Division (‘‘GSD’’) regarding 

the calculation of clearing fund deposits 

relating to inter-dealer broker positions. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FICC 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 these statements 

may be examined at the places specified 

in Item IV below. FICC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements.3

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

The GSD maintains a clearing fund 

comprised of member deposits of cash 

and eligible securities to provide 

liquidity and to enable FICC to satisfy 

any losses that might otherwise be 

incurred as a result of a member’s 

default and the subsequent close-out of 

its positions. GSD uses a Value-at-Risk 

(‘‘VaR’’) methodology to calculate 

clearing fund requirements.4 The 

clearing fund methodology used by GSD 

analyzes risk by reference to three 

factors: (i) End-of-day VaR charge to 

assess market volatility for observed 

open positions at the end-of-day after 

giving effect to offsetting positions 

within the portfolio; (ii) margin 

requirement differential (‘‘MRD’’) to 

address intraday risk; and (iii) coverage 

component (‘‘CC’’) to adjust the 

calculation if necessary to reach a given 

confidence level. The margin 

calculation is predicated upon an 

assumption that the open positions of a 

defaulting member would be liquidated 

at the end of a three-day period. 

Inter-dealer brokers (‘‘IDBs’’) function 

as intermediaries trading with multiple 

counterparties and with respect to 

government securities trades, provide 

anonymity and liquidity for trading 

partners. IDBs operate on small spreads, 

handle large transactions, and perform a 

critical function in the government 

securities market in the absence of a 

centralized trading exchange. 

IDBs submit affirmed trades from 

their systems to GSD, each trade already 

matched to the counterparty that will 

ultimately deliver or receive the 

securities. Although IDBs generally do 

not maintain positions, they may have 

positions versus GSD when their 

counterparties are not GSD members. 

Because these trades are matched by the 

IDB to a counterparty prior to 

submission to the GSD, the risk to FICC 

in the case of an IDB’s default is 

different from that presented when a 

dealer member submits a trade that may 

not have been already matched to a 

counterparty. 

The clearing fund requirement 

applicable to IDBs has increased 

significantly because of recent market 

volatility to the point where FICC 

believes it is disproportionate to the risk 

that IDB activity presents to GSD. Given 

the importance of IDB transactions in 

the government securities marketplace, 

unsustainable margin requirements on 

GSD IDB activity may be harmful and 

may introduce systemic risk in the event 

members are motivated to avoid 

imposition of disproportionate changes 

by netting outside of GSD or by delaying 

trade submission until later in the day.5

To alleviate this situation, FICC is 

proposing to use a one-day liquidation 

assumption when calculating margin 

applicable to IDB activity.6 The 

assumption of a three-day liquidation 

period will continue to apply to nonIDB activity. Since IDB trades are 

matched prior to submission, FICC 

believes that the one-day liquidation 

period is a reasonable assumption. FICC 

will continue to monitor the IDB 

activity of its members and will 

periodically reassess whether the oneday liquidation period provides 

adequate coverage. In this regard, FICC 

will provide the Commission with data 

to allow the Commission to track the 

magnitudes and behaviors of the VaR for 

a one-day liquidation horizon and for a 

three-day liquidation horizon, and with 

such other information that the 

Commission may request. FICC further 

notes its ability to impose special 

charges in response to market 

circumstances or other risk factors with 

respect to a particular member. 

FICC believes that the proposed rule 

change is consistent with the 

requirements of Section 17A of the Act 7

and the rules and regulations 

thereunder because the proposed 

change will modify the calculation of 

clearing fund deposits of IDB positions 

so that the clearing fund contribution is 


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