[Federal Register Volume 75, Number 102 (Thursday, May 27, 2010)]
[Notices]
[Pages 29795-29797]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-12745]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62142; File No. SR-NYSE-2010-38]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Deleting NYSE Rule 413 To Correspond With Rule Changes Filed by the 
Financial Industry Regulatory Authority, Inc.

May 20, 2010.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on May 12, 2010, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to delete NYSE Rule 413 to correspond with 
rule changes filed by the Financial Industry Regulatory Authority, Inc. 
(``FINRA'') and approved by the Commission.\4\ The text of the proposed 
rule change is available at the Exchange, the Commission's Public 
Reference Room, and http://www.nyse.com.
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    \4\ See Securities Exchange Act Release No. 61542 (February 18, 
2010), 75 FR 8768 (February 25, 2010) (order approving SR-FINRA-
2009-093).
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule changes is to delete NYSE Rule 413 
(Uniform Forms) to correspond with rule changes filed by FINRA and 
approved by the Commission.
    Background:
    On July 30, 2007, FINRA's predecessor, the National Association of 
Securities Dealers, Inc. (``NASD''), and NYSE Regulation, Inc. 
(``NYSER'') consolidated their member firm regulation operations into a 
combined organization, FINRA. Pursuant to Rule 17d-2 under the Act, 
NYSE, NYSER and FINRA entered into an agreement (the ``Agreement'') to 
reduce regulatory duplication for their members by allocating to FINRA 
certain regulatory responsibilities for certain NYSE rules and rule 
interpretations (``FINRA Incorporated NYSE Rules''). NYSE Amex LLC 
(``NYSE Amex'') became a party to the Agreement effective December 15, 
2008.\5\
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    \5\ See Securities Exchange Act Release Nos. 56148 (July 26, 
2007), 72 FR 42146 (August 1, 2007) (order approving the Agreement); 
56147 (July 26, 2007), 72 FR 42166 (August 1, 2007) (SR-NASD-2007-
054) (order approving the incorporation of certain NYSE Rules as 
``Common Rules''); and 60409 (July 30, 2009), 74 FR 39353 (August 6, 
2009) (order approving the amended and restated Agreement, adding 
NYSE Amex LLC as a party). Paragraph 2(b) of the Agreement sets 
forth procedures regarding proposed changes by FINRA, NYSE or NYSE 
Amex to the substance of any of the Common Rules.
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    As part of its effort to reduce regulatory duplication and relieve 
firms that are members of FINRA, NYSE and NYSE Amex of conflicting or 
unnecessary regulatory burdens, FINRA is now engaged in the process of 
reviewing and amending the NASD and FINRA Incorporated NYSE Rules in 
order to create a consolidated FINRA rulebook.\6\
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    \6\ FINRA's rulebook currently has three sets of rules: (1) NASD 
Rules, (2) FINRA Incorporated NYSE Rules, and (3) consolidated FINRA 
Rules. The FINRA Incorporated NYSE Rules apply only to those members 
of FINRA that are also members of the NYSE (``Dual Members''), while 
the consolidated FINRA Rules apply to all FINRA members. For more 
information about the FINRA rulebook consolidation process, see 
FINRA Information Notice, March 12, 2008.
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    Proposed Conforming Amendments to NYSE Rules:
    FINRA recently deleted FINRA Incorporated NYSE Rule 413 (Uniform 
Forms), which required that each member had to adopt such uniform forms 
as may be prescribed by the Exchange to facilitate the orderly flow of 
transactions within the financial community.\7\
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    \7\ See Securities Exchange Act Release No. 61542 (February 18, 
2010), 75 FR 8768 (February 25, 2010).
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    In deleting FINRA Incorporated NYSE Rule 413, FINRA noted that 
several provisions in its By-Laws required its members to provide 
certain information in the manner and form prescribed by FINRA, 
including membership applications, registration of branch offices, 
registration of registered representatives and associated persons, and 
termination of registered employees. FINRA also noted its proposal to 
adopt a new Rule 4540 governing information and data reporting and 
filing requirements.\8\
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    \8\ See Securities Exchange Act Release No. 61542 (February 18, 
2010), 75 FR 8768 (February 25, 2010).
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    In order to harmonize the NYSE Rules with the approved consolidated 
FINRA Rules, the Exchange correspondingly proposes to delete NYSE Rule 
413.\9\ As with FINRA, the Exchange has a number of rules that require 
members and member organizations to provide certain information in the 
manner and form prescribed by the Exchange: for example, NYSE Rules 
301(b) and 311-

[[Page 29796]]

313 deal with membership applications; Rule 342(c) requires filing for 
branch offices (Form BR); Rule 345, particularly 345.12, covers 
applications for registered representatives (Form U-4); and Rules 
312(a) and 345 require reporting termination of registered persons 
(Form U-5). In addition, similar to proposed consolidated FINRA Rules 
4530 and 4540, NYSE Rule 351 (see 351.10) requires members and member 
organizations to provide the Exchange with certain regulatory and 
disciplinary information, and Rules 341 and 416A require members and 
member organizations to maintain current contact information with the 
Exchange.\10\
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    \9\ NYSE Amex has submitted a companion rule filing amending its 
rules in accordance with FINRA's rule changes. See SR-NYSEAmex-2010-
45.
    \10\ See FINRA Regulatory Notices 08-71 (November 28, 2008) 
(discussing proposed FINRA Rule 4530) and 09-02 (January 6, 2009) 
(discussing proposed FINRA Rule 4540). Per the rule harmonization 
process, the Exchange will likely adopt versions of these rules once 
they are filed with and approved by the Commission.
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    Notwithstanding these other rules, NYSE Rule 416(a) broadly 
provides that members and member organizations must ``submit to the 
Exchange at such times as may be designated in such form and within 
such time period as may be prescribed such information as the Exchange 
deems essential for the protection of investors and the public 
interest.'' \11\ Thus, deletion of NYSE Rule 413 will not limit the 
Exchange's authority to require its members and member organizations to 
provide information in a prescribed manner as needed.
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    \11\ FINRA has proposed to delete portions of NYSE Rule 416 as 
part of its broader proposal to adopt new membership rules. See 
FINRA Regulatory Notice 10-01 (January 4, 2010) (discussing proposed 
FINRA Rules 1111-1190). Per the rule harmonization process, the 
Exchange will likely adopt versions of these rules once they are 
filed with and approved by the Commission.
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2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with Section 6(b) of the Act,\12\ in general, and further the 
objectives of Section 6(b)(5) of the Act,\13\ in particular, in that 
they are designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and, in general, to protect investors and the 
public interest.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule changes support the 
objectives of the Act by providing greater harmonization between NYSE 
Rules and FINRA Rules (including Common Rules) of similar purpose, 
resulting in less burdensome and more efficient regulatory compliance 
for Dual Members. To the extent the Exchange has proposed changes that 
differ from the FINRA version of the Rules, such changes are technical 
in nature and do not change the substance of the proposed NYSE Rules.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \14\ and Rule 19b-4(f)(6) thereunder.\15\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest.\18\ The Commission 
believes that waiver of the operative delay is consistent with the 
protection of investors and the public interest because the proposed 
rule change is merely deleting a rule that is duplicative of other 
rules in its rulebook.\19\ The Exchange has represented that the 
deletion of the rule will not limit the Exchange's authority to require 
its members and member organizations to provide needed information.
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ See id. Pursuant to Rule 19b-4(f)(6)(iii) under the 
Exchange Act, the Exchange is required to give the Commission 
written notice of its intent to file a proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
    \19\ For purposes only of waiving the 30-day operative delay of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition and capital formation. 15 U.S.C. 
78c(f).
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    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

    <bullet> Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an e-mail to <a href="/cdn-cgi/l/email-protection#592b2c353c743a3634343c372d2a192a3c3a773e362f"><span class="__cf_email__" data-cfemail="aedcdbc2cb83cdc1c3c3cbc0daddeeddcbcd80c9c1d8">[email protected]</span></a>. Please include 
File Number SR-NYSE-2010-38 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2010-38. 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

[[Page 29797]]

provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make publicly available. All 
submissions should refer to File Number SR-NYSE-2010-38 and should be 
submitted on or before June 17, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-12745 Filed 5-26-10; 8:45 am]
BILLING CODE 8010-01-P


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