15540 Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Notices 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Amendment No. 1 to SR–NYSEALTR–2009–26 

replaces the original filing in its entirety. 

4On March 3, 2009, the Exchange formally 

submitted a filing with the Commission changing 

its name to NYSE Amex LLC. See SR–NYSEALTR– 

2009–24. 

5See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. 

6See 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). 

7 15 U.S.C. 78f. 

8See Securities Exchange Act Release No. 58705 

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

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–NYSE–2009–36 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2009–36. 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 such filing also will be 

available for inspection and copying at 

the principal office of the Exchange. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make publicly available. All 

submissions should refer to File 

Number SR–NYSE–2009–36 and should 

be submitted on or before April 27, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–7662 Filed 4–3–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59656; File No. SR– 

NYSEALTR–2009–26] 

Self-Regulatory Organizations; Notice 

of Filing of Proposed Rule Change by 

NYSE Alternext US LLC, as Modified 

by Amendment No. 1, Changing 

Certain NYSE Amex Equities Rules To 

Conform Them With Changes to 

Corresponding Rules Submitted in a 

Companion Filing by the New York 

Stock Exchange LLC 

March 30, 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 March 9, 

2009, NYSE Alternext US LLC (n/k/a 

NYSE Amex LLC) (‘‘Exchange’’ or 

‘‘NYSE Amex’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’ or ‘‘SEC’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

prepared by the self-regulatory 

organization. On March 27, 2009, the 

Exchange filed Amendment No. 1 to the 

proposed rule change.3 The Commission 

is publishing this notice to solicit 

comments on the proposed rule change, 

as amended, from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange, formerly the American 

Stock Exchange LLC and NYSE 

Alternext US LLC,4 proposes changes to 

certain NYSE Amex Equities Rules, 

retroactively effective to December 15, 

2008, to conform them with changes to 

corresponding rules 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

changes is to change certain NYSE 

Amex Equities Rules to conform them 

with amendments to corresponding 

NYSE Rules submitted in a companion 

filing by the NYSE. 

Background 

As described more fully in a rule 

filing,6 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 

(‘‘Amex’’), a subsidiary of AMC, became 

a subsidiary of NYSE Euronext called 

NYSE Amex US LLC, and continues to 

operate as a national securities exchange 

registered under Section 6 of the Act.7

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.8


pwalker on PROD1PC71 with NOTICES
Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Notices 15541 

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

Relocation). 

9See Securities Exchange Act Release No. 58705 

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

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

Relocation); Securities Exchange Act Release No. 

58833 (October 22, 2008), 73 FR 64642 (October 30, 

2008) (SR–NYSE–2008–106) and Securities 

Exchange Act Release No. 58839 (October 23, 2008), 

73 FR 64645 (October 30, 2008) (SR–NYSEALTR– 

2008–03) (together, approving the Bonds 

Relocation); Securities Exchange Act Release No. 

59022 (November 26, 2008), 73 FR 73683 

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

(adopting amendments to NYSE Amex Equities 

Rules to track changes to corresponding NYSE 

Rules); Securities Exchange Act Release No. 59027 

(November 28, 2008), 73 FR 73681 (December 3, 

2008) (SR–NYSEALTR–2008–11) (adopting 

amendments to Rule 62–NYSE Amex Equities to 

track changes to corresponding NYSE Rule 62). 

10See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. 

11See Securities Exchange Act Release No. 58461 

(September 4, 2008), 73 FR 52710 (September 10, 

2008) (SR–FINRA–2008–033); Securities Exchange 

Act Release No. 58514 (September 11, 2008), 73 FR 

54190 (September 18, 2008) (SR–FINRA–2008–039); 

Securities Exchange Act Release No. 58643 

(September 25, 2008), 73 FR 57174 (October 1, 

2008) (SR–FINRA–2008–021, –022, –026, –028, 

–029); Securities Exchange Act Release No. 58660 

(September 26, 2008), 73 FR 57393 (October 2, 

2008) (SR–FINRA–2008–027); Securities Exchange 

Act Release No. 58661 (September 26, 2008), 73 FR 

57395 (October 2, 2008) (SR–FINRA–2008–030); 

and Securities Exchange Act Release No. 59097 

(December 12, 2008), 73 FR 78412 (December 22, 

2008) (SR–FINRA–2008–057). See also FINRA 

Regulatory Notice 08–57, October 16, 2008. FINRA 

filed the rule changes as part of its effort to develop 

a new consolidated rulebook for its members (the 

‘‘Consolidated FINRA Rulebook’’). 

12 In its filing, the NYSE proposes to change 

certain NYSE Rule Interpretations. The Exchange 

has not adopted a corresponding version of the 

NYSE Rule Interpretations and so those proposed 

rule changes are not applicable to the Exchange and 

are not included in this filing. 

13See Securities Exchange Act Release No. 58660 

(September 26, 2008), 73 FR 57393 (October 2, 

2008). 

14FINRA also noted that certain provisions of 

FINRA Incorporated NYSE Rules 350 and 350.10 

and Rule Interpretation 350/02 related to 

operations/Floor employees of the NYSE are not 

applicable to FINRA and could be deleted. See 

Securities Exchange Act Release No. 58660 

(September 26, 2008), 73 FR 57393 (October 2, 

2008). NYSE Amex believes that the substance of 

these provisions is adequately addressed in existing 

NYSE Amex Equities Rules and the proposed NYSE 

Amex Equities Rules 2070 and 3220. 

15See Securities Exchange Act Release No. 55765 

(May 15, 2007), 72 FR 28743 (May 22, 2007) (SR– 

NASD–2006–44), as subsequently amended, 

January 2, 2008. The NYSE has proposed the 

adoption of a new NYSE Rule 350A that is 

substantively duplicative of the rule proposed in 

SR–NASD–2006–044. See Securities Exchange Act 

Release No. 55766 (May 15, 2007), 72 FR 28534 

(May 21, 2007) (SR–NYSE–2006–06). These filings 

have not been approved by the Commission as of 

the date of this filing. Upon approval, the Exchange 

will adopt a corresponding NYSE Amex Equities 

Rule. The Commission notes that NYSE Amex must 

file a proposed rule change under Section 19(b) of 

the Act to adopt such corresponding NYSE Amex 

Equities Rule. 

16See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. 

17See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. 

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.9 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 Amendments to 

NYSE Amex Equities Rules 

As noted above, the Exchange 

proposes to change certain NYSE Amex 

Equities Rules to conform them with 

changes to corresponding NYSE Rules 

submitted in a companion filing by the 

NYSE.10 The NYSE is filing the 

proposed rule changes, retroactively 

effective to December 15, 2008, to 

harmonize its Rules with changes to 

corresponding rules recently filed by the 

Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) and approved 

by the Commission or submitted for 

immediate effectiveness.11 Unless 

specifically noted, and subject to such 

technical changes as are necessary to 

apply the Rules to the Exchange, NYSE 

Amex is proposing to adopt the NYSE’s 

proposed rule changes in the form that 

they have been approved for filing by 

the Commission. The NYSE’s proposed 

rule changes and the Exchange’s 

proposed conforming rule changes are 

described below.12

The Exchange further proposes that 

these rule changes be retroactively 

effective to December 15, 2008, the same 

as the effective date of the NYSE’s 

proposed rule changes and FINRA’s rule 

changes on which this filing and the 

NYSE’s filing are based. 

FINRA Rule Filing SR–FINRA–2008– 

027 13

In this filing, FINRA adopted NASD 

Rules 3060 (Influencing or Rewarding 

Employees of Others) and 3090 

(Transactions Involving Association and 

American Stock Exchange Employees) 

as FINRA Rules 3220 and 2070, 

respectively. FINRA Rule 3220 prohibits 

members or associated persons from 

giving gifts or gratuities in excess of 

$100 per year to an agent or employee 

of another person where it relates to the 

business of the employer of the 

recipient. FINRA Rule 2070 addresses 

conflicts of interest involving FINRA 

employees. 

Because they are substantively 

duplicative of these FINRA Rules, 

FINRA deleted the corresponding 

provisions of FINRA Incorporated NYSE 

Rules 407(a) and 407.10 (Transactions— 

Employees of Members, Member 

Organizations and the Exchange) and 

350 (Compensation or Gratuities to 

Employees of Others), and Rule 

Interpretations 350/01 (Application) and 

/02 (Conflicts of Interest).14 FINRA also 

deleted FINRA Incorporated NYSE Rule 

Interpretation 350/03 (Entertainment), 

which deals with business 

entertainment expenses, since it is 

addressed in a separate rule filing.15

Accordingly, to harmonize the NYSE 

Rules with the approved FINRA rule 

changes, the NYSE proposes to (i) delete 

NYSE Rule 350 and Rule Interpretations 

350/01–/03, and (ii) adopt proposed 

NYSE Rules 2070 and 3220, which are 

nearly identical to FINRA Rules 2070 

and 3220, to replace the deleted NYSE 

Rules. The NYSE believes that proposed 

NYSE Rules 2070 and 3220, together 

with other existing and/or proposed 

NYSE Rules, address the specific 

provisions of NYSE Rule 350 and the 

related Rule Interpretations.16

Specifically, NYSE Rule 350(a) 

addresses the giving of gifts or gratuities 

by members, member organizations and 

their employees to other members, 

member organizations, their employees 

or the employees of non-members 

engaged in certain businesses. NYSE 

Rules 350(a) and (b) address the 

employment or compensation of others 

by members, member organizations and 

their employees, including Floor-based 

employees of other members or member 

organizations. Under NYSE Rule 350(b), 

payment in excess of $200 for 

employment or compensation of a Floor 

employee of another member or member 

organization requires the employee to 

become registered with such member or 

member organization. 

The NYSE believes that proposed new 

NYSE Rule 3220 replaces NYSE Rule 

350(a) because it addresses the giving of 

gifts or gratuities to, and the 

employment or compensation for 

services of, the employees of others, 

both members and non-members. 

Proposed NYSE Rule 3220(a) 

harmonizes with FINRA Rule 3220(a) 

because it prohibits the giving of gifts or 

gratuities in excess of $100 per year to 

‘‘any person, principal, proprietor, 

employee, agent or representative of 

another person’’ where that gift is 

related to the business of the recipient’s 

employer.17

Proposed NYSE Rule 3220(b) replaces 

NYSE Rule 350(b) because it addresses 

situations requiring dual employment 

and prior written consent when 


pwalker on PROD1PC71 with NOTICES
15542 Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Notices 

18See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. 

19See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. 

20See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. The Exchange, which 

is the NYSE’s corporate affiliate, has the same 

policies and procedures governing the acceptance 

of gifts and gratuities and dual employment 

arrangements by its employees. 

21See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. In its filing, the NYSE 

proposes to replace current NYSE Rule 401(a), 

concerning good business practices, with proposed 

NYSE Rules 2010 and 2020, which are substantially 

identical to FINRA Rules 2010 and 2020, approved 

by the Commission. The Exchange proposes, infra, 

the adoption of NYSE Amex Equities Rules 2010 

and 2020 in the form proposed by the NYSE, 

subject to such changes as are necessary to apply 

them to the Exchange. 

22See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. Specifically, FINRA’s 

interpretative guidance concerning business 

entertainment expenses includes a June 24, 1999, 

Letter to Henry H. Hopkins and Sarah McCafferty, 

T. Rowe Price Investment Services, Inc. This 

interpretative letter and other interpretive guidance 

concerning business entertainment expenses are 

currently available at FINRA’s Web site at http:// 

www.finra.org/Industry/Regulation/Guidance/ 

InterpretiveLetters/ConductRules/index.htm. 

23See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. Unlike FINRA, both 

the NYSE and the Exchange still review listing 

applications and conduct delisting proceedings and 

believe it is appropriate to include these matters in 

proposed NYSE and NYSE Amex Equities Rule 

2070(c). In addition, since neither the NYSE nor the 

Exchange no longer engages in dispute-resolution 

proceedings (i.e. arbitrations), they do not need 

such a designation in either proposed NYSE or 

NYSE Amex Equities Rule 2070. 

24See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. 

25See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. Even though FINRA 

amended FINRA Incorporated NYSE Rule 407 when 

it adopted FINRA Rule 2070, those two rules are not 

inconsistent. NYSE Rule 407(a) provides, inter alia, 

that a member or member organization must obtain 

prior written consent before opening an account or 

executing a trade for an NYSE employee. FINRA 

Rule 2070(a) and proposed NYSE Rule 2070(a) 

simply require that, once a member or member 

organization has actual notice of an account held 

by a FINRA or NYSE employee, it must provide 

duplicate account statements to the NYSE. In 

addition, NYSE Rule 407.10 prescribes procedures 

for how NYSE employees may open accounts that 

are not addressed by FINRA Rule 2070 or proposed 

compensation provided to another 

employee exceeds a specified amount. 

NYSE Rule 350(b) requires dual 

employment for any payments over 

$200 to Floor employees whereas 

proposed NYSE Rule 3220(b) requires 

dual employment for any payment made 

to any employee for employment or 

services over the $100 limit prescribed 

by NYSE Rule 3220(a), including Floor 

employees of a member organization.18

Because under proposed NYSE Rule 

3220(a) any employee, including Floor 

employees, receiving more than $100 for 

services from another member 

organization must be dually employed 

with that member organization, the 

requirement under NYSE Rule 350(b) 

that a Floor employee receiving more 

than $200 in compensation be dually 

registered is no longer necessary. Under 

NYSE Rules 35 and 35.50, which 

require that all member and member 

organization Floor employees must be 

registered with the NYSE on Form U– 

4, any Floor employee that is dually 

employed must be registered with each 

member organization for whom he or 

she works. Accordingly, because the 

new dual employment requirement 

under proposed NYSE Rule 3220(b) 

triggers the NYSE Rule 35 dual 

registration requirements, it is not 

necessary to specify dual registration in 

proposed NYSE Rule 3220. Upon 

adoption of NYSE Rule 3220 the NYSE 

and the Exchange intend to issue 

guidance to their members and member 

organizations reminding them that any 

person who is dually employed by two 

or more members or member 

organizations must be registered with 

each such member or member 

organization pursuant to NSYE and 

NYSE Amex Equities Rule 35.19

NYSE Rules 350(a) and 350.10 also 

specifically address, inter alia, the 

giving of gifts or gratuities to, or the 

employment or compensation of, 

employees of the NYSE by members, 

member organizations and their 

employees. In particular, NYSE Rule 

350.10 specifies, inter alia, the 

procedures for seeking NYSE’s consent 

for the employment or compensation of 

NYSE employees and describes the 

types of dual-employment arrangements 

generally acceptable to the NYSE and 

those that are not acceptable. 

The NYSE believes that proposed 

NYSE Rules 3220 and 2070 specifically 

address the provisions of NYSE Rule 

350(a) and 350.10 dealing expressly 

with NYSE employees. To begin with, 

proposed NYSE Rule 3220 concerns the 

giving of gifts or gratuities to, or the 

employment or compensation of, any 

employee of another, which would 

include employees of the NYSE. In 

addition, proposed NYSE Rule 2070(c) 

specifically provides that, 

notwithstanding the more general 

prescriptions of NYSE Rule 3220(a), 

members and member organizations are 

prohibited from giving anything of value 

to an NYSE employee responsible for 

any regulatory matter involving such 

member or member organization. The 

NYSE did not include the standards or 

procedures for dual-employment 

arrangements for its employees 

contained in NYSE Rule 350.10 into the 

proposed NYSE Rules 2070 and 3220 

because those rules bind only NYSE 

members and member organizations and 

not its employees. The NYSE does 

believe, however, that proposed NYSE 

Rules 2070 and 3220 governing member 

conduct, together with the NYSE’s 

internal policies and procedures 

governing the acceptance of gifts and 

gratuities and dual employment 

arrangements by its employees, provide 

sufficient protection against any 

improper relationships between its 

employees and its members.20

In its filing, the NYSE also noted that 

NYSE Rule Interpretations 350/01–/03 

are addressed by proposed NYSE Rules 

2010, 2020 and 3220, as well as existing 

NYSE Rules 476(a)(1) and (a)(5).21 The 

NYSE also noted that, upon adoption of 

new NYSE Rule 3220, it would issue an 

Information Memorandum to its 

members and member organizations, 

including dual FINRA and NYSE 

members and members organizations as 

well as NYSE-only members and 

member organizations, informing them 

of their obligations under the new Rule 

incorporating the FINRA interpretations 

under its Rule 3220 concerning business 

entertainment expenses. The Exchange 

would issue joint guidance to its 

members and member organizations, 

including both dual FINRA and NYSE 

Amex members and member 

organizations as well as NYSE Amexonly members and member 

organizations, concurrently with the 

NYSE.22

As proposed, new NYSE Rules 2070 

and 3220 are virtually identical to 

FINRA Rules 2070 and 3220, previously 

approved by the Commission. With 

respect to proposed NYSE Rule 2070, 

the NYSE proposes minor changes to 

the approved FINRA version of that 

Rule to conform it to the Exchange, 

including changing the title of the Rule 

to ‘‘Transactions Involving Exchange 

Employees,’’ adding the term ‘‘member 

organization,’’ and adding language that 

requires member organizations to 

provide statements to the NYSE, rather 

than FINRA, for accounts held by NYSE 

employees. In addition, the NYSE 

proposes to add language to NYSE 

2070(c) to include listing applications 

and delisting proceedings, and to 

remove the reference to disputeresolution proceedings.23 With respect 

to proposed NYSE Rule 3220, to 

conform that Rule to NYSE definitions, 

the NYSE proposes adding the term 

‘‘member organization.’’ 24

Finally, although FINRA has deleted 

language from FINRA Incorporated 

NYSE Rule 407, because the NYSE uses 

its corresponding NYSE Rule to, inter 

alia, monitor accounts held by NYSE 

employees, the NYSE will retain NYSE 

Rule 407 without change.25


pwalker on PROD1PC71 with NOTICES
Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Notices 15543 

NYSE Rule 2070. Thus, the NYSE can retain NYSE 

Rule 407 in its original form as well as adopt NYSE 

Rule 2070 without any regulatory conflict for its 

members and member organizations. Similarly, the 

Exchange will retain Rule 407–NYSE Amex 

Equities. 

26See Securities Exchange Act Release No. 58643 

(September 25, 2008), 73 FR 57174 (October 1, 

2008) (SR–FINRA–2008–021, –022, –026,–028, 

–029). 

27FINRA Rule 6140 was adopted in SR–FINRA– 

2008–021. See Securities Exchange Act Release No. 

58643 (September 25, 2008), 73 FR 57174 (October 

1, 2008) (SR–FINRA–2008–021, –022, –026, –028, 

–029). 

28 In addition to being covered more generally by 

FINRA Rules 2010 and 2020, provisions (1), (3) and 

(4) of FINRA Incorporated NYSE Rule 435 are also 

substantially the same as FINRA Rule 6140. See 

Securities Exchange Act Release No. 58643 

(September 25, 2008), 73 FR 57174 (October 1, 

2008) (SR–FINRA–2008–021, –022, –026, –028, 

–029). 

29FINRA has stated that these particular NASD 

and NYSE Rules are proposed for inclusion in the 

so-called ‘‘supervision rules’’ that are to be adopted 

at some later date as part of the Consolidated 

FINRA Rulebook. See FINRA Regulatory Notice 08– 

24. 

30See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. Although it is not 

addressed by FINRA in its filing because it is not 

a FINRA Incorporated NYSE Rule subject to 

FINRA’s regulatory responsibility under the 

Agreement, NYSE Rule 476(a)(6) prescribes that 

NYSE members and member organizations and 

their employees may not engage in conduct 

‘‘inconsistent with just and equitable principles of 

trade[.]’’ The NYSE thus includes this provision for 

deletion since ‘‘just and equitable principles of 

trade’’ are addressed in proposed NYSE Rule 2010. 

The Exchange correspondingly proposes to delete 

Non-NYSE Amex Equities Rule 476(a)(6). 

31See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. 

32For a definition of ‘‘Non-NYSE Amex Equities 

Rules,’’ see legacy Amex Rule 0 and Rule 0—NYSE 

Amex Equities. 

33See Securities Exchange Act Release No. 58643 

(September 25, 2008), 73 FR 57174 (October 1, 

2008) (SR–FINRA–2008–021, –022, –026, –028, 

–029). 

34NASD Rule 2110 was adopted by FINRA as 

FINRA Rule 2010 in SR–FINRA–2008–028. See 

Securities Exchange Act Release No. 58643 

(September 25, 2008), 73 FR 57174 (October 1, 

2008) (SR–FINRA–2008–021, –022, –026, –028, 

–029). 

35See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. Neither NYSE nor the 

Exchange is adopting NASD Notice 03–68 as it is 

not a formally adopted rule. It is important to note 

that all of the Exchange’s members and member 

organizations that have public customers are also 

members of, and have their member firm conduct 

regulated by, FINRA. Thus, to the extent FINRA 

Rule 2010 and new Rule 2010—NYSE Amex 

Equities apply to conduct involving non-managed 

fee-based account programs, which concerns 

member firm conduct, such application will be 

administered by FINRA. Upon adoption of new 

Rule 2010—NYSE Amex Equities, the Exchange 

intends to issue guidance to its members and 

member organizations informing them of their 

obligations for such programs under the new Rule 

and FINRA rules. 

The Exchange proposes to 

correspondingly delete Rule 350–NYSE 

Amex Equities and adopt Rules 2070– 

and 3220–NYSE Amex Equities in the 

form proposed by the NYSE, subject to 

such changes as are necessary to apply 

them to the Exchange. Similarly, the 

Exchange will retain Rule 407–NYSE 

Amex Equities without change to 

monitor accounts held by Exchange 

employees. 

FINRA Rule Filing SR–FINRA–2008– 

028 26

Here, FINRA adopted, inter alia, 

NASD Rules 2110 (Standards of 

Commercial Honor and Principles of 

Trade) and 2120 (Use of Manipulative, 

Deceptive or Other Fraudulent Devices) 

as FINRA Rules 2010 and 2020, 

respectively. FINRA Rule 2010 requires 

members to observe high standards of 

commercial honor and just and 

equitable principles of trade in the 

conduct of their business. This Rule is 

used to protect market participants from 

dishonest and unfair practices even 

where those practices do not violate a 

specific law, rule or regulation. FINRA 

Rule 2020 is a general antifraud 

provision that is used to address a range 

of conduct, including market 

manipulation, excessive trading, insider 

trading and fraudulent 

misrepresentation. In a separate filing, 

FINRA also adopted FINRA Rule 6140 

(Other Trading Practices), which 

replaces NASD Rule 5120 and governs 

a number of prohibited trading 

practices, including manipulation and 

disseminating false and misleading 

information about a security.27

Because they are substantively 

duplicative of these FINRA Rules, 

FINRA deleted the corresponding 

provisions of FINRA Incorporated NYSE 

Rules 401(a) (Business Conduct) and 

435(1), (3) and (4) (Miscellaneous 

Prohibitions) and Rule Interpretation 

401/01 (Trading Against Firm 

Recommendations).28 In addition, 

FINRA deleted NYSE Rule 

Interpretation 401/02 (Private Sales), 

which requires members to monitor 

personnel that market securities through 

private offerings, for being substantively 

duplicative of NYSE Rules 407(b) and 

407.11.29 FINRA also deleted FINRA 

Incorporated NYSE Rule 435 provisions 

(6) and (7) as being obsolete and/or 

substantively duplicative of Federal 

Reserve Board Regulation T. 

Accordingly, to harmonize NYSE 

Rules with the approved FINRA Rules, 

the NYSE similarly proposes to delete 

(i) NYSE Rule 401(a) and Rule 

Interpretations 401/01 and/02, (ii) NYSE 

Rule 476(a)(6),30 and (iii) NYSE Rules 

435(1), (3), (4), (6) and (7). To replace 

NYSE Rules 401(a) and 476(a)(6) and 

Rule Interpretation 401/01, the NYSE 

proposes to adopt NYSE Rules 2010 and 

2020, which are substantially identical 

to FINRA Rules 2010 and 2020, except 

for adding the term ‘‘member 

organization.’’ To replace NYSE Rules 

435(1), (3), and (4), the NYSE proposes 

to adopt NYSE Rule 6140, which is 

substantially identical to FINRA Rule 

6140, except for adding the term 

‘‘member organization.’’ For the same 

reasons proposed by FINRA, the NYSE 

proposes deleting NYSE Rule 

Interpretation 401/02 as being 

substantively duplicative of NYSE Rules 

407(b) and 407.11, and deleting NYSE 

Rules 435(6) and (7) as being obsolete 

and/or substantively duplicative of 

Reserve Board Regulation T.31

The Exchange proposes to 

correspondingly delete Rules 401(a)– 

and 435(1), (3), (4), (6) and (7)–NYSE 

Amex Equities and Non-NYSE Amex 

Equities Rule 476(a)(6).32 The Exchange 

further proposes to adopt Rules 2010–, 

2020– and 6140–NYSE Amex Equities 

in the form proposed by the NYSE, 

subject to such changes as are necessary 

to apply them to the Exchange. 

FINRA Rule Filing SR–FINRA–2008– 

029 33

In this filing, FINRA deleted, inter 

alia, FINRA Incorporated NYSE Rules 

405A (Non-Managed Fee-Based Account 

Programs—Disclosure and Monitoring), 

440F (Public Short Sale Transactions 

Effected on the Exchange), 440G 

(Transactions in Stocks and Warrants 

for the Accounts of Members, Allied 

Members and Member Organizations) 

and 477 (Retention of Jurisdiction— 

Failure to Cooperate) as being 

duplicative of other NASD, FINRA or 

SEC rules or regulations or as being 

specific to the NYSE marketplace. 

For the same reasons set forth in the 

approved FINRA filing, the NYSE 

proposes to delete NYSE Rule 405A. As 

FINRA noted, the prescriptions of Rule 

405A are addressed under the 

Investment Advisers Act of 1940 and 

also, to the extent fee-based programs 

continue to exist in brokerage accounts, 

in NASD Notice to Members 03–68, 

which applies NASD Rule 2110 

(Standards of Commercial Honor and 

Principles of Trade) to such accounts.34

The NYSE is proposing to adopt NYSE 

Rule 2010, which is substantially the 

same as FINRA 2010, and so, to the 

extent fee-based programs continue to 

exist in brokerage accounts they would 

be addressed under the proposed 

Rule.35

With respect to NYSE Rules 440F and 

440G, as FINRA noted these Rules are 

NYSE specific—they require member 

organizations to file with the NYSE 

certain information about short sale and 

proprietary transactions executed at the 


pwalker on PROD1PC71 with NOTICES
15544 Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Notices 

36See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. 

37See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. 

38See Securities Exchange Act Release No. 58661 

(September 26, 2008), 73 FR 57395 (October 2, 

2008) (SR–FINRA–2008–030). 

39See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. 

40See Securities Exchange Act Release No. 58461 

(September 4, 2008), 73 FR 52710 (September 10, 

2008) (SR–FINRA–2008–033). 

41See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. 

42See Securities Exchange Act Release No. 58514 

(September 11, 2008), 73 FR 54190 (September 18, 

2008) (SR–FINRA–2008–039). 

NYSE. These Rules date to a time when 

trading at the NYSE was not as 

automated as it is today. Today, the 

NYSE is able to track short sale and 

proprietary trades through its ‘‘OCS’’ 

and ‘‘PTP’’ systems and run 

surveillances based on that information. 

Because the NYSE can derive that 

information from its trading systems, 

the NYSE no longer needs member 

organizations to file separately that 

information. The NYSE therefore 

believes that these Rules can be deleted 

in their entirety.36

Finally, although FINRA has deleted 

FINRA Incorporated NYSE Rule 477, 

because the NYSE uses that Rule for 

disciplinary purposes specific to the 

organization, the NYSE will retain 

NYSE Rule 477 without change. 

Because FINRA has deleted FINRA 

Incorporated NYSE Rule 477, NYSE 

Rule 477 will lose its status as a 

Common Rule and FINRA will no 

longer retain any regulatory 

responsibility for this Rule.37

The Exchange proposes to 

correspondingly delete Rules 405A–, 

440F– and 440G– NYSE Amex Equities. 

Similarly, the Exchange will retain NonNYSE Amex Equities Rule 477 without 

change for disciplinary purposes 

specific to NYSE Amex. 

FINRA Rule Filing SR–FINRA–2008– 

030 38

In this filing, FINRA adopted NASD 

Rule 3013 (Annual Certification of 

Compliance and Supervisory Processes) 

and IM–3013 (Annual Compliance and 

Supervision Certification) as FINRA 

Rule 3130. FINRA Rule 3130 requires 

each member firm to designate one or 

more principals to serve as Chief 

Compliance Officer and also requires 

that the Chief Executive Officer certify 

annually that the firm has established 

and maintained procedures and 

processes reasonably designed to ensure 

compliance with all applicable FINRA 

Rules and federal laws and regulations. 

Because they are substantively 

duplicative of the FINRA Rule, FINRA 

deleted the corresponding provisions of 

FINRA Incorporated NYSE Rules 

342.30(d) and (e) (Annual Report and 

Certification) and Rule Interpretations 

311(b)(5)/04 (Formation and Approval 

of Member Organizations—Officers— 

Other Dual or Multi-Designations) and/ 

05 (Co-Designation of Principle 

Executive Officers) and 342.30(d)/01 

(Annual Reports and Certification— 

Designation of Chief Compliance 

Officer) and (e)/01 (Annual 

Certification). 

To harmonize NYSE Rules with the 

approved FINRA Rules, the NYSE 

proposes to (i) delete NYSE Rules 

342.30(d) and (e) and Rule 

Interpretations 311(b)(5)/04 and/05 and 

342.30(d)/01 and (e)/01, and (ii) replace 

them with proposed NYSE Rule 3130, 

which is substantially similar to FINRA 

Rule 3130. As proposed, NYSE Rule 

3130 adopts the same language as 

FINRA Rule 3130, except for changing 

the term ‘‘member’’ to ‘‘member 

organization’’. Therefore, as proposed, 

NYSE Rule 3130 would require NYSE 

member organizations to complete their 

annual certifications at the same time 

they complete their certifications for 

FINRA.39

The Exchange proposes to 

correspondingly delete Rules 342.30(d) 

and (e)—NYSE Amex Equities and 

adopt Rule 3130—NYSE Amex Equities 

in the form proposed by the NYSE, 

subject to such changes as are necessary 

to apply the Rule to the Exchange. 

FINRA Rule Filing SR–FINRA–2008– 

033 40

Here, FINRA adopted NASD Rule 

3360 (Short-Interest Reporting) and 

FINRA Incorporated NYSE Rules 421(1) 

(Periodic Reports) and 421.10 (Short 

Positions) as new FINRA Rule 4560 and 

deleted these provisions from the 

Common Rules. FINRA Rule 4560 

adopted rule text to consolidate the 

NASD and NYSE short-interest 

reporting requirements, including 

requiring members to follow certain 

reporting requirements for short 

positions in over-the-counter (‘‘OTC’’) 

and exchange-listed securities for all 

customer and proprietary accounts. 

Accordingly, the NYSE proposes to (i) 

delete NYSE Rules 421(1) and 421.10, 

and (ii) adopt proposed NYSE Rule 4560 

to replace the deleted NYSE Rules. 

Proposed NYSE Rule 4560 is 

substantially identical to FINRA Rule 

4560. To conform NYSE Rule 4560 to 

the NYSE, the NYSE proposes to remove 

the references to ‘‘OTC Equity 

Securities’’ in the rule, including 

provision (b)(3), and change the term 

‘‘member’’ to ‘‘member organization.’’ 

Because FINRA processes short-interest 

reporting on behalf of multiple 

exchanges, including the NYSE, 

proposed NYSE Rule 4560 will retain 

the requirement that member 

organizations report to FINRA.41

The Exchange proposes to 

correspondingly delete Rules 421(1) and 

421.10—NYSE Amex Equities and adopt 

Rule 4560—NYSE Amex Equities in the 

form proposed by the NYSE, subject to 

such changes as are necessary to apply 

the Rule to the Exchange. 

FINRA Rule Filing SR–FINRA–2008– 

039 42

In this filing, FINRA adopted, inter 

alia, provisions of NASD Rules 

2710(b)(10) and (11) (Corporate 

Financing Rule—Underwriting Terms 

and Arrangements) and FINRA 

Incorporated NYSE Rule 392(a) 

(Notification Requirements for Offerings 

of Listed Securities) as consolidated 

FINRA Rule 5190. FINRA Rule 5190 

contains the Regulation M-related notice 

requirements for members participating 

in securities offerings. FINRA also 

deleted FINRA Incorporated NYSE Rule 

392(b) as specific to the NYSE 

marketplace. 

The NYSE continues to have 

regulatory responsibility with respect to 

Regulation M and relies on reports filed 

by member organizations pursuant to 

NYSE Rule 392 to conduct certain 

surveillances. Accordingly, the NYSE 

continues to need an NYSE-specific rule 

requiring firms to report this 

information to the NYSE. However, in 

an effort to harmonize the reporting 

obligations across the NYSE and FINRA 

as much as possible, the NYSE proposes 

to delete NYSE Rule 392 and adopt 

proposed NYSE Rule 5190. 

Proposed NYSE Rule 5190 is 

substantially identical to FINRA Rule 

5190, except for replacing the term 

‘‘member’’ with the term ‘‘member 

organization’’, changing the references 

to ‘‘OTC Equity Securities’’ and 

‘‘securities’’ in the Rule to ‘‘listed 

securities’’ in order to apply the Rule to 

the NYSE, and adding language to 

paragraphs (b) and (e) of the Rule 

concerning stabilizing bids in order to 

ensure that the requirements of NYSE 

Rule 392(b) are fully imported into new 

NYSE Rule 5190. The substantive 

reporting requirements of NYSE Rule 

392 are essentially being reorganized 

and renumbered into new NYSE Rule 

5190 to help eliminate confusion and 

regulatory duplication for its member 

organizations. Member organizations 


pwalker on PROD1PC71 with NOTICES
Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Notices 15545 

43See SR–NYSE–2009–25 (formally submitted on 

March 9, 2009), as amended. 

44See Securities Exchange Act Release No. 59097 

(December 12, 2008), 73 FR 78412 (December 22, 

2008) (SR–FINRA–2008–057). 

45 15 U.S.C. 78f(b). 

46 15 U.S.C. 78f(b)(5). 

47 15 U.S.C. 78k–1(a)(1). 

48 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

will therefore continue to file these 

reports with the NYSE.43

The Exchange proposes to 

correspondingly delete Rule 392—NYSE 

Amex Equities and adopt Rule 5190— 

NYSE Amex Equities in the form 

proposed by the NYSE, subject to such 

changes as are necessary to apply the 

Rule to the Exchange. 

FINRA Rule Filing SR–FINRA–2008– 

057 44

In accordance with FINRA 2008–057, 

the NYSE incorporated changes to 

proposed NYSE Rule 5190. As noted 

above, the Exchange proposes to adopt 

corresponding Rule 5190– NYSE Amex 

Equities in the form proposed by the 

NYSE, subject to such changes as are 

necessary to apply the Rule to the 

Exchange. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule changes are consistent 

with Section 6(b) of the Act,45 in 

general, and further the objectives of 

Section 6(b)(5) of the Act,46 in 

particular, in that they are designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. The proposed rule 

changes also support the principles of 

Section 11A(a)(1) 47 of the Act in that 

they seek to ensure the economically 

efficient execution of securities 

transactions and fair competition among 

brokers and dealers and among 

exchange markets. 

The Exchange believes that the 

proposed rule changes are necessary 

and appropriate to conform the NYSE 

Amex Equities Rules with changes made 

to the corresponding NYSE Rules on 

which they are based. The Exchange 

also believes that the proposed rule 

changes will provide greater 

harmonization among NYSE Rules, 

NYSE Amex Equities Rules and FINRA 

Rules of similar purpose, resulting in 

less burdensome and more efficient 

regulatory compliance for their common 

members and member organizations. To 

the extent the Exchange has proposed 

changes that differ from the NYSE 

version of the Rules, such changes are 

technical in nature and do not change 

the substance of the proposed NYSE 

Amex Equities Rules. The Exchange 

therefore believes that the proposed rule 

changes support the objectives of the 

Act by providing greater regulatory 

clarity and relieving unnecessary 

regulatory burdens. 

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 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve such proposed 

rule change; or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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–NYSEALTR–2009–26 on 

the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NYSEALTR–2009–26. This 

file number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (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 such filing also will be 

available for inspection and copying at 

the principal office of the Exchange. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–NYSEALTR–2009–26 and 

should be submitted on or before April 

27, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.48

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–7590 Filed 4–3–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59650; File No. SR– 

NYSEArca–2009–24] 

Self-Regulatory Organizations; Notice 

of Filing of Proposed Rule Change by 

NYSE Arca, Inc. To Adopt a Policy With 

Respect to the Treatment of Aberrant 

Trades 

March 30, 2009. 

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

Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’) 2 and Rule 19b–4 


pwalker on PROD1PC71 with NOTICES