Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 46117 

7 15 U.S.C. 78s(b)(3)(A)(iii). 

8 17 CFR 240.19b–4(f)(6). 

9 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of the Exchange’s intent 

to file the proposed rule change along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has requested and the Commission has agreed 

waive this pre-filing requirement. 

10 17 CFR 240.19b–4(f)(6). 

11 17 CFR 240.19b–4(f)(6)(iii). 

12For purposes only of waiving the operative 

delay for this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition and capital formation. See 

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

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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 7 and Rule 

19b–4(f)(6) thereunder.8 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.9

A proposed rule change filed under 

Rule 19b–4(f)(6) 10 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),11 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Exchange believes the waiver 

of this period will allow it to 

immediately conform NYSE Rule 431 to 

FINRA’s proposed amendments to its 

version of NYSE Rule 431, in 

furtherance of the consolidation of the 

member firm regulation functions of 

NYSE Regulation and NASD. As 

provided in paragraph 2(b) of the 

Agreement, FINRA and NYSE will, 

absent a disagreement about the 

substance of a proposed rule change to 

one of the Common Rules, promptly 

propose conforming changes to ensure 

that such rules continue to be Common 

Rules under the Agreement. The 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest because such waiver will 

allow the customer portfolio margining 

program to continue uninterrupted as it 

would otherwise expire on July 31, 

2008.12 Accordingly, the Commission 

designates the proposed rule change 

effective upon filing with the 

Commission. 

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–NYSE–2008–66 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2008–66. 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 

Section, 100 F Street, NE., Washington, 

DC 20549–1090 on official business 

days between the hours of 10 a.m. and 

3 p.m. Copies of the filing will also be 

available for inspection and copying at 

the NYSE’s principal office and on its 

Internet Web site at www.nyse.com. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–NYSE–2008–66 and should 

be submitted on or before August 28, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18075 Filed 8–6–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58285; File No. SR–NYSE–

2008–60] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change and 

Amendment No. 1 Thereto in 

Connection With the Proposed 

Acquisition of The Amex Membership 

Corporation 

August 1, 2008. 

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

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on July 23, 2008, the New York Stock 

Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’), 

a New York limited liability company 

and registered national securities 

exchange, filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change as described 

in Items I, II and III below, which Items 

have been substantially prepared by the 


sroberts on PROD1PC70 with NOTICES
46118 Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 

3See Amendment No. 1. 

Exchange. On July 30, 2008, the NYSE 

filed Amendment No. 1 to the proposed 

rule change. 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 NYSE is submitting this proposed 

rule change to the Commission in 

connection with the proposed 

acquisition of The Amex Membership 

Corporation (‘‘MC’’), a New York notfor-profit corporation that owns 100% 

(99% directly and 1% indirectly 

through a wholly owned subsidiary) of 

American Stock Exchange LLC, a 

Delaware limited liability company and 

registered national securities exchange 

(‘‘Amex’’), by NYSE Euronext, the 

Delaware corporation that indirectly 

owns 100% of the Exchange. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nyse.com, at the 

Exchange’s principal office, and at the 

Commission’s Public Reference Room. 

The text of Exhibits 5A through 5G is 

also available on the Commission’s Web 

site (http://www.sec.gov/rules/ 

sro.shtml). 

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 

Exchange 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 Exchange is submitting this 

proposed rule change to the 

Commission in connection with the 

proposed acquisition of MC, a New York 

not-for-profit corporation that owns 

100% of Amex, by NYSE Euronext. The 

proposed acquisition will occur 

pursuant to the terms of the Agreement 

and Plan of Merger, dated as of January 

17, 2008 (as it may be amended from 

time to time, the ‘‘Merger Agreement’’), 

by and among NYSE Euronext, 

Amsterdam Merger Sub, LLC, a 

Delaware limited liability company and 

a wholly owned subsidiary of NYSE 

Euronext formed by NYSE Euronext in 

connection with the Mergers (‘‘Merger 

Sub’’), MC, AMC Acquisition Sub, Inc., 

a Delaware corporation and a wholly 

owned subsidiary of MC (‘‘AMCAS’’), 

American Stock Exchange Holdings, 

Inc., a Delaware corporation and a 

wholly owned subsidiary of MC created 

by MC in connection with the Mergers 

(‘‘Holdings’’), Amex, which is 99 

percent owned by MC and 1 percent 

owned by AMCAS, and American Stock 

Exchange 2, LLC, a Delaware limited 

liability company and a wholly owned 

subsidiary of Holdings formed by 

Holdings in connection with the 

Mergers (‘‘Amex Merger Sub’’). 

Under the terms of the Merger 

Agreement, MC will demutualize and 

NYSE Euronext will acquire the 

business of MC and its subsidiaries 

through a series of mergers (the 

‘‘Mergers’’). Following the Mergers, 

Merger Sub, a wholly owned subsidiary 

of NYSE Euronext and a successor to 

MC and AMCAS, will directly own 

100% of Amex Merger Sub, which will 

be the successor to Amex and a 

registered national securities exchange. 

It is intended that Amex Merger Sub 

will be renamed ‘‘NYSE Alternext U.S. 

LLC’’ (and therefore is referred to in this 

document as ‘‘NYSE Alternext US’’). 

Corporate Structure 

Immediately following the NYSE/ 

Amex Merger, NYSE Euronext will 

contribute 100% of the limited liability 

company interest of Merger Sub to 

NYSE Group, Inc. (‘‘NYSE Group’’) 

(such contribution, the ‘‘Contribution’’), 

causing Merger Sub to become a direct 

wholly owned subsidiary of NYSE 

Group. Immediately following the 

Contribution, Merger Sub will merge 

with and into NYSE Alternext U.S. a 

direct wholly owned subsidiary of 

Merger Sub (‘‘Internal Merger’’). As a 

result of the Contribution and the 

Internal Merger, NYSE Alternext U.S. 

will become a direct wholly owned 

subsidiary of NYSE Group. The 

proposed rule change will be operative 

upon completion of the Internal 

Merger.3

Organizational Documents of NYSE 

Euronext 

Currently the NYSE Euronext 

organizational documents provide 

certain protections to the Exchange and 

NYSE Arca, Inc. that are designed to 

protect and facilitate their selfregulatory functions. In general, the 

organizational documents of NYSE 

Euronext are being amended to provide 

similar protections to NYSE Alternext 

U.S. as are currently provided to the 

Exchange and NYSE Arca, Inc. under 

those documents. In addition, in the 

proposed new Director Independence 

Policy for NYSE Euronext directors, the 

three-year retrospective period (‘‘lookback period’’) over which directors’

relationships with members of the 

Exchange and NYSE Arca, Inc. are 

reviewed (which following the mergers 

will apply equally to NYSE Alternext 

US) has been reduced to one year. The 

Exchange believes that this reduction 

will be beneficial in expanding NYSE 

Euronext’s pool of eligible director 

candidates with knowledge of the 

exchange industry, while still 

maintaining sufficient director 

independence. 

The amended and restated bylaws of 

NYSE Euronext are being amended to: 

• Include NYSE Alternext U.S. in the 

definition of ‘‘U.S. Regulated 

Subsidiaries,’’ which currently includes 

the Exchange, NYSE Market, Inc., NYSE 

Regulation, Inc., NYSE Arca, L.L.C., 

NYSE Arca, Inc. and NYSE Arca 

Equities, Inc. and to provide that the 

term ‘‘U.S. Regulated Subsidiaries’’

includes those entities listed or their 

successors, but only so long as they 

continue to be controlled, directly or 

indirectly, by NYSE Euronext; 

• Provide that the provisions 

referencing the Exchange, NYSE Market, 

Inc., NYSE Regulation, Inc., NYSE Arca, 

L.L.C., NYSE Arca, Inc. and NYSE Arca 

Equities, Inc. apply with respect to 

those entities or their successors, but 

only so long as they or their successors 

continue to be controlled, directly or 

indirectly, by NYSE Euronext; 

• Provide the same protection to 

confidential information pertaining to 

the self regulatory function of NYSE 

Alternext U.S. or its successor 

(including but not limited to 

disciplinary matters, trading data, 

trading practices and audit information) 

contained in the books and records of 

any of the U.S. Regulated Subsidiaries, 

that shall come into the possession of 

NYSE Euronext, as is currently provided 

under the bylaws of NYSE Euronext 

with respect such confidential 

information pertaining to the self 

regulatory function of the Exchange, 

NYSE Market, Inc., NYSE Regulation, 

Inc., NYSE Arca, Inc. and NYSE Arca 

Equities, Inc., but only to the extent that 

NYSE Alternext U.S. and its successor 

continues to be controlled, directly or 

indirectly by NYSE Euronext; 

• Provide that, subject to its fiduciary 

obligations under applicable law, for so 

long as NYSE Euronext directly or 


sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 46119 

4 15 U.S.C. 78c(a)(3)(A). 

5 15 U.S.C. 78s. 

6 Id. 

7 Id. 

8 Id. 

9See Securities Exchange Act Release No. 55293 

(February 14, 2007), 72 FR 8033 (February 22, 2007) 

(SR–NYSE–2006–120). 

10 15 U.S.C. 78c(a)(3)(A). 

indirectly controls NYSE Alternext U.S. 

(or its successor), the board of directors 

of NYSE Euronext shall not adopt any 

resolution pursuant to clause (2) of 

section 1(B) of Article V of the 

certificate of incorporation of NYSE 

Euronext unless the board of Directors 

of NYSE Euronext shall have 

determined that: 

• In the case of a resolution to 

approve the exercise of voting rights in 

excess of 20% of the then outstanding 

votes entitled to be cast on such matter, 

neither such Person nor any of its 

Related Persons (as defined in the 

certificate of incorporation of NYSE 

Euronext) is, with respect to NYSE 

Alternext U.S. (or its successor), a 

‘‘member,’’ as defined in sections 

3(a)(3)(A)(i), 3(a)(3)(A)(ii), 3(a)(3)(A)(iii) 

and 3(a)(3)(A)(iv) of the Exchange Act 4) 

(a ‘‘NYSE Alternext Member’’) (any such 

person that is a ‘‘Related Person’’ (as 

defined in the Certificate of 

incorporation of NYSE Euronext) of 

such NYSE Alternext Member is also 

deemed to be a ‘‘NYSE Alternext 

Member’’ for the purposes of the 

proposed Second Amended and 

Restated Bylaws of NYSE Euronext, as 

the context may require); and 

• In the case of a resolution to 

approve the entering into of an 

agreement, plan or other arrangement 

under circumstances that would result 

in shares of stock of NYSE Euronext that 

would be subject to such agreement, 

plan or other arrangement not being 

voted on any matter, or the withholding 

of any proxy relating thereto, where the 

effect of such agreement, plan or other 

arrangement would be to enable any 

person, but for Article V of the 

certificate of incorporation of NYSE 

Euronext, either alone or together with 

its Related Persons, to vote, possess the 

right to vote or cause the voting of 

shares of stock of NYSE Euronext that 

would exceed 20% of the then 

outstanding votes entitled to be cast on 

such matter (assuming that all shares of 

stock of NYSE Euronext that are subject 

to such agreement, plan or other 

arrangement are not outstanding votes 

entitled to be cast on such matter), 

neither such Person nor any of its 

Related Persons is, with respect to 

NYSE Alternext U.S. (or its successor), 

a NYSE Alternext Member; 

• Provide that, subject to its fiduciary 

obligations under applicable law, for so 

long as NYSE Euronext directly or 

indirectly controls NYSE Alternext U.S. 

(or its successor), the board of directors 

of NYSE Euronext shall not adopt any 

resolution pursuant to clause (2) of 

Section 2(B) of Article V of the 

certificate of incorporation of NYSE 

Euronext (which relates to NYSE 

Euronext board of directors approval of 

ownership of NYSE Euronext capital 

stock in excess of 20%), unless the 

board of directors of NYSE Euronext 

shall have determined that neither such 

Person nor any of its Related Persons is, 

with respect to NYSE Alternext U.S. (or 

its successor), a NYSE Alternext 

Member; 

• Provide that, for so long as NYSE 

Euronext controls any of the U.S. 

Regulated Subsidiaries, any amendment 

to or repeal of the bylaws of NYSE 

Euronext must either be (i) filed with or 

filed with and approved by the 

Commission under section 19 of the 

Exchange Act 5 and the rules 

promulgated thereunder or (ii) 

submitted to the boards of directors of 

the Exchange, NYSE Market, Inc., NYSE 

Regulation, Inc., NYSE Arca, Inc., NYSE 

Arca Equities, Inc. and NYSE Alternext 

U.S. or the boards of directors of their 

successors, in each case only to the 

extent that such entity continues to be 

controlled directly or indirectly by the 

NYSE Euronext, and if any or all of such 

boards of directors shall determine that 

such amendment or repeal must be filed 

with or filed with and approved by the 

Commission under section 19 of the 

Exchange Act 6 and the rules 

promulgated thereunder before such 

amendment or repeal may be 

effectuated, then such amendment or 

repeal shall not be effectuated until filed 

with or filed with and approved by the 

Commission, as the case may be; 

• Provide that, for as long as NYSE 

Euronext controls any European Market 

Subsidiary (as defined in the bylaws of 

NYSE Euronext), any amendment to or 

repeal of the bylaws of NYSE Euronext 

must either be (i) filed with or filed with 

and approved by a European Regulator 

(as defined in the bylaws of NYSE 

Euronext) under European Exchange 

Regulations (as defined in the bylaws of 

NYSE Euronext) or (ii) submitted to the 

boards of directors of the European 

Market Subsidiaries and, if any or all of 

such boards of directors shall determine 

that such amendment or repeal must be 

filed with or filed with and approved by 

a European Regulator under European 

Exchange Regulations before such 

amendment or repeal may be 

effectuated, then such amendment or 

repeal shall not be effectuated until filed 

with or filed with and approved by the 

relevant European Regulator(s); 

• Provide that so long as NYSE 

Euronext shall control, directly or 

indirectly, NYSE Alternext U.S. (or its 

successor), the board of directors of 

NYSE Euronext shall not adopt any 

resolution to repeal or amend any 

provision of the Certificate of 

Incorporation unless such amendment 

or repeal shall either (i) be filed with or 

filed with and approved by the 

Commission under section 19 of the 

Exchange Act 7 and the rules 

promulgated thereunder or (ii) be 

submitted to the board of directors of 

NYSE Alternext U.S. (or the board of 

directors of its successor), and if such 

board of directors determines that such 

amendment or repeal must be filed with 

or filed with and approved by the 

Commission under section 19 of the 

Exchange Act 8 and the rules 

promulgated thereunder before such 

amendment or repeal may be 

effectuated, then such amendment or 

repeal shall not be effectuated until filed 

with or filed with and approved by the 

Commission, as the case may be; and 

• Remove or update certain 

references to the Combination 

Agreement, dated as of June 1, 2006, as 

amended and restated as of November 

24, 2006, by and among the NYSE 

Euronext, NYSE Group, Inc., Euronext 

N.V. and Jefferson Merger Sub, Inc. 

The proposed new independence 

policy of the NYSE Euronext board of 

directors will be substantially similar to 

the current Commission-approved 

independence policy of the NYSE 

Euronext board of directors,9 except 

that: 

• The independence policy provision 

relating to relationships with NYSE and 

NYSE Arca, Inc. market participants 

have been expanded to equally apply to 

relationships with NYSE Alternext U.S. 

market participants (or the market 

participants of its successor); 

• Instead of relying on the definition 

of ‘‘member’’ or ‘‘member organization’’

or similar terms in the rules of the 

individual exchanges, the proposed new 

independence policy relies on the 

definition of ‘‘member’’ in sections 

3(a)(3)(A)(i), 3(a)(3)(A)(ii), 3(a)(3)(A)(iii) 

and 3(a)(3)(A)(iv) of the Exchange Act.10

This technical change is designed to 

harmonize the use of those terms in the 

proposed new independence policy 

with respect to each of the Exchange, 

NYSE Arca, Inc. and NYSE Alternext 

U.S. and to simplify the language of the 

policy; 

• Independence requirements for the 

NYSE Alternext U.S. board of directors 


sroberts on PROD1PC70 with NOTICES
46120 Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 

11 15 U.S.C. 78c(a)(3)(A). 

12 15 U.S.C. 78s. 

13 Id. 

(or the board of directors of its 

successor) have been added that are the 

same as those for the Exchange’s board 

of directors; 

• The ‘‘look back period’’ with 

respect to directors’ relationships with 

members of the Exchange and NYSE 

Arca, Inc. (which following the mergers 

will apply equally to NYSE Alternext 

US) has been reduced from three years 

to one year; 

• All references to New York Stock 

Exchange LLC, NYSE Arca, Inc., NYSE 

Arca Equities, Inc. and NYSE Alternext 

U.S. shall mean each of those entities or 

its successor; and 

• The provision providing for a 

transition period so that the 

independence requirements of the 

NYSE Euronext director independence 

policy would not apply to the European 

Persons on the NYSE Euronext board of 

directors until the annual meeting of 

NYSE Euronext stockholders in 2008 

has been deleted since the revised NYSE 

Euronext Independence Policy is 

expected to go into effect after the 

meeting of NYSE Euronext Stockholders 

in 2008. 

Organizational Documents of NYSE 

Group 

Currently the NYSE Group 

organizational documents provide 

certain protections to the Exchange and 

NYSE Arca, Inc. that are designed to 

protect and facilitate their selfregulatory functions. In general, the 

organizational documents of NYSE 

Group are being amended to provide 

similar protections to NYSE Alternext 

U.S. as are currently provided to the 

Exchange and NYSE Arca, Inc. under 

those documents. 

The amended and restated certificate 

of incorporation of NYSE Group is being 

amended to: 

• Provide that, subject to its fiduciary 

obligations under applicable law, for so 

long as NYSE Group directly or 

indirectly controls NYSE Alternext U.S. 

(or its successor), the board of directors 

of NYSE Group shall not adopt any 

resolution pursuant to clause (ii) of 

section 4(b)(1)(A) of Article IV of the 

certificate of incorporation of NYSE 

Group unless the board of Directors of 

NYSE Group shall have determined 

that: 

• In the case of a resolution to 

approve the exercise of voting rights in 

excess of 20% of the then outstanding 

votes entitled to be cast on such matter, 

neither such Person nor any of its 

Related Persons (as defined in the 

certificate of incorporation of NYSE 

Group) is, with respect to NYSE 

Alternext U.S. (or its successor), a 

‘‘member,’’ as defined in sections 

3(a)(3)(A)(i), 3(a)(3)(A)(ii), 3(a)(3)(A)(iii) 

and (3)(a)(A)(iv) of the Exchange Act 11

(a ‘‘NYSE Alternext Member’’) (any such 

person that is a Related Person (as 

defined in the Second Amended and 

Restated Certificate of Incorporation of 

NYSE Group) of such NYSE Alternext 

Member is also deemed to be an ‘‘NYSE 

Alternext Member’’ for purposes of the 

proposed Second Amended and 

Restated Certificate of Incorporation of 

NYSE Group, as the context may 

require); and 

• In the case of a resolution to 

approve the entering into of an 

agreement, plan or other arrangement 

under circumstances that would result 

in shares of stock of NYSE Group that 

would be subject to such agreement, 

plan or other arrangement not being 

voted on any matter, or the withholding 

of any proxy relating thereto, where the 

effect of such agreement, plan or other 

arrangement would be to enable any 

person, but for Article IV of the 

certificate of incorporation of NYSE 

Group, either alone or together with its 

Related Persons, to vote, possess the 

right to vote or cause the voting of 

shares of stock of NYSE Group that 

would exceed 20% of the then 

outstanding votes entitled to be cast on 

such matter (assuming that all shares of 

stock of NYSE Group that are subject to 

such agreement, plan or other 

arrangement are not outstanding votes 

entitled to be cast on such matter), 

neither such Person nor any of its 

Related Persons is, with respect to 

NYSE Alternext U.S. (or its successor), 

a NYSE Alternext Member; 

• Provide that, subject to its fiduciary 

obligations under applicable law, for so 

long as NYSE Group directly or 

indirectly controls NYSE Alternext U.S. 

(or its successor), the board of directors 

of NYSE Group shall not adopt any 

resolution pursuant to clause (ii) of 

section 4(b)(2)(B) of Article IV of the 

certificate of incorporation of NYSE 

Group (which relates to NYSE Group 

board of directors approval of 

ownership of NYSE Group capital stock 

in excess of 20%), unless the board of 

directors of NYSE Group shall have 

determined that neither such Person nor 

any of its Related Persons is, with 

respect to NYSE Alternext U.S. (or its 

successor), a NYSE Alternext Member; 

• Include NYSE Alternext U.S. in the 

definition of ‘‘Regulated Subsidiaries,’’

which currently includes the Exchange, 

NYSE Market, Inc., NYSE Regulation, 

Inc., NYSE Arca, L.L.C., NYSE Arca, 

Inc. and NYSE Arca Equities, Inc. and 

to provide that the term ‘‘Regulated 

Subsidiaries’’ includes those entities 

listed or their successors, but only so 

long as they continue to be controlled, 

directly or indirectly, by NYSE Group; 

• Provide the same protections to all 

confidential information pertaining to 

the self-regulatory function of NYSE 

Alternext U.S. as are currently provided 

under the Amended and Restated 

Certificate of Incorporation of NYSE 

Group to confidential information 

pertaining to the self regulatory function 

of the Exchange, NYSE Market, Inc., 

NYSE Regulation, Inc., NYSE Arca, Inc. 

and NYSE Arca Equities, Inc.; 

• Provide that any amendment to or 

repeal of the certificate of incorporation 

of NYSE Group must either be (i) filed 

with or filed with and approved by the 

Commission under section 19 of the 

Exchange Act 12 and the rules 

promulgated thereunder or (ii) 

submitted to the boards of directors of 

the Exchange, NYSE Market, Inc., NYSE 

Regulation, Inc., NYSE Arca, Inc., NYSE 

Arca Equities, Inc. and NYSE Alternext 

U.S. or the boards of directors of their 

successors, in each case only to the 

extent that such entity continues to be 

controlled directly or indirectly by the 

NYSE Group, and if any or all of such 

boards of directors shall determine that 

such amendment or repeal must be filed 

with or filed with and approved by the 

Commission under section 19 of the 

Exchange Act 13 and the rules 

promulgated thereunder before such 

amendment or repeal may be 

effectuated, then such amendment or 

repeal shall not be effectuated until filed 

with or filed with and approved by the 

Commission, as the case may be. 

The amended and restated bylaws of 

NYSE Group are being amended to: 

• Provide that any amendment to or 

repeal of the bylaws of NYSE Group 

must either be (i) filed with or filed with 

and approved by the Commission under 

section 19 of the Exchange Act and the 

rules promulgated thereunder or (ii) 

submitted to the boards of directors of 

the Exchange, NYSE Market, Inc., NYSE 

Regulation, Inc., NYSE Arca, Inc., NYSE 

Arca Equities, Inc. and NYSE Alternext 

U.S. or the boards of directors of their 

successors, in each case only to the 

extent that such entity continues to be 

controlled directly or indirectly by the 

NYSE Group, and if any or all of such 

boards of directors shall determine that 

such amendment or repeal must be filed 

with or filed with and approved by the 

Commission under section 19 of the 

Exchange Act and the rules promulgated 

thereunder before such amendment or 

repeal may be effectuated, then such 

amendment or repeal shall not be 


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Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 46121 

14Reviews of delisting determinations will be 

heard by the same NYSE Alternext U.S. committee 

as has been reviewing such matters prior to the 

Mergers. 

15 15 U.S.C. 78c(a)(3)(A)(i). 

16 15 U.S.C. 78c(a)(3)(A)(ii)–(iv). 

17 15 U.S.C. 78f(b). 

18 15 U.S.C. 78f(b)(1). 

19 15 U.S.C. 78f(b)(5). 

effectuated until filed with or filed with 

and approved by the Commission, as the 

case may be. 

Bylaws of NYSE Regulation 

The amended and restated bylaws of 

NYSE Regulation currently provide for 

the creation of a Committee for Review 

that is charged with performing certain 

functions with respect to the Exchange, 

including hearing appeals for 

disciplinary decisions, conducting 

reviews of staff delisting determinations 

and providing general advice to the 

NYSE Regulation Board of Directors in 

connection with disciplinary, listing 

and other regulatory matters. The 

Committee for Review is currently 

comprised of (i) directors of NYSE 

Regulation and (ii) at least three nondirector committee members associated 

with member organizations of the 

Exchange, at least one of whom is 

associated with a member organization 

of the Exchange that engages in a 

business involving substantial direct 

contact with securities customers, at 

least one of whom is associated with a 

member organization of the Exchange 

and registered as a specialist and spends 

a substantial part of his or her time on 

the trading floor of NYSE Market, Inc. 

and at least one of whom is associated 

with a member organization of the 

Exchange and spends a majority of his 

time on the trading floor of NYSE 

Market, Inc., and has as a substantial 

part of his business the execution of 

transactions on the trading floor of 

NYSE Market, Inc. for other than his 

own account or the account of his 

Exchange member organization, but is 

not registered as a specialist. 

Following the Mergers, the Committee 

for Review will also hear disciplinary 

appeals for NYSE Alternext U.S.14 In 

connection therewith, the amended and 

restated bylaws of NYSE Regulation are 

being amended to provide that the 

Committee for Review be expanded to 

include at least four individuals who are 

associated with member organizations 

of NYSE Alternext U.S. at least one of 

whom is associated with an member 

organization of NYSE Alternext U.S. 

that engages in a business involving 

substantial direct contact with securities 

customers; at least one of whom is 

associated with an member organization 

of NYSE Alternext U.S. and registered 

as a specialist and spends a substantial 

part of his or her time on the trading 

floor of NYSE Alternext US; at least one 

of whom is associated with a member 

organization of NYSE Alternext U.S. 

and spends a majority of his or her time 

on the trading floor of NYSE Alternext 

U.S. and has as a substantial part of his 

business the execution of transactions 

on the trading floor of NYSE Alternext 

U.S. for other than his or her own 

account or the account of his NYSE 

Alternext U.S. member organization but 

is not registered as a specialist; and at 

least of whom is associated with a NYSE 

Alternext U.S. Member Organization 

and spends a majority of his or her time 

on the trading floor of NYSE Alternext 

U.S. and has as a substantial part of his 

or her business the execution of 

transactions on the trading floor of 

NYSE Alternext U.S. for his own 

account or the account of his or her 

NYSE Alternext U.S. Member 

Organization but is not registered as a 

specialist. 

Trust Agreement of the NYSE Group 

Trust I 

The Trust Agreement is being 

amended to make certain technical 

changes designed to better provide 

NYSE Alternext U.S. with the same 

protections against certain material 

adverse changes in European Law that 

it currently provides for the Exchange 

and NYSE Arca, Inc. 

Rules of the Exchange 

Solely for the purposes of section 1(L) 

of Article 5 of the certificate of 

incorporation of NYSE Euronext (which 

is the definition of ‘‘Related Person’’), as 

it may be in effect from time to time, the 

Exchange proposes to amend (1) the 

definition of ‘‘member’’ under Rule 2(a) 

of the Rules of the Exchange to include 

any ‘‘member’’ (as defined in section 

3(a)(3)(A)(i) of the Exchange Act 15) of 

NYSE Alternext U.S. (or its successor), 

so long as NYSE Euronext continues to 

control, directly or indirectly, NYSE 

Alternext U.S. or its successor and (2) 

the definition of ‘‘Member 

Organization’’ under Rule 2(b) of the 

Exchange to include any ‘‘member’’ (as 

defined in section 3(a)(3)(A)(ii), 

3(a)(3)(A)(iii) and 3(a)(3)(A)(iv) of the 

Exchange Act 16) of NYSE Alternext U.S. 

(or its successor), so long as NYSE 

Euronext continues to control, directly 

or indirectly, NYSE Alternext U.S. or its 

successor. 

2. Statutory Basis 

The Exchange believes that this filing 

is consistent with section 6(b) of the 

Exchange Act,17 in general, and furthers 

the objectives of section 6(b)(1),18 in 

particular, in that it enables the 

Exchange to be so organized as to have 

the capacity to be able to carry out the 

purposes of the Exchange Act and to 

comply, and to enforce compliance by 

its exchange members and persons 

associated with its exchange members, 

with the provisions of the Exchange Act, 

the rules and regulations thereunder, 

and the rules of the Exchange. The 

Exchange also believes that this filing 

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

of the Exchange Act 19 because the rules 

summarized herein would create a 

governance and regulatory structure that 

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 Exchange 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 the 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, as amended, is consistent with 


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46122 Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 

20 17CFR 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 generally Securities Exchange Act Release 

No. 58184 (July 17, 2008), 73 FR 42853 (July 23, 

2008) (SR–NYSE–2008–46). 

6 Id. 

7The Display Book system is an order 

management and execution facility. The Display 

Book system receives and displays orders to the 

specialists, contains the Book, and provides a 

mechanism to execute and report transactions and 

publish the results to the Consolidated Tape. The 

Display Book system is connected to a number of 

other Exchange systems for the purposes of 

comparison, surveillance, and reporting 

information to customers and other market data and 

national market systems. 

8Exchange systems provide specialist algorithms 

with the following information: (1) Specialist dealer 

position; (2) quotes; (3) information about orders in 

the Display Book system such as limit orders, 

percentage orders (‘‘state of the book’’); (4) 

incoming orders as they are entering NYSE systems; 

and (5) information with respect to odd-lot 

executions to which the specialist was the contraside. In addition, a specialist firm may supply its 

algorithm with any publicly available information 

the specialist firm chooses. The Specialist 

Algorithm does not have access to: (1) Information 

the Exchange 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–2008–60 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549. 

All submissions should refer to File 

Number SR-NYSE–2008–60. 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–NYSE–2008–60 and should 

be submitted on or before August 28, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18146 Filed 8–6–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58268; File No. SR–NYSE–

2008–67] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Reduce the 

Order Flow Sent to the Specialist 

Application Programmed Interface 

July 30, 2008. 

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 29, 

2008, New York Stock Exchange LLC 

(‘‘NYSE’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by NYSE. NYSE filed the proposed rule 

change pursuant to section 19(b)(3)(A) 

of the Act 3 and Rule 19b–4(f)(6) 

thereunder,4 which renders it effective 

upon filing with the Commission. 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 

NYSE proposes to reduce the order 

flow sent to the Specialist Application 

Programmed Interface (‘‘Specialist 

APISM’’ or ‘‘SAPI’’). The text of the 

proposed rule change is available at 

NYSE, 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, 

NYSE included statements concerning 

the purpose of, and basis for, the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. NYSE 

has prepared summaries, set forth in 

Sections A, B, and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1.Purpose 

NYSE proposes to reduce the 

information that is made available to 

specialists with respect to orders as they 

enter Exchange systems. The reduction 

of order information provided to the 

specialist is the Exchange’s way of 

gradually transitioning the specialists 

into their new role as Designated Market 

Makers (‘‘DMMs’’).5 The DMM on the 

Exchange will ultimately not be 

provided any order by order information 

as of the complete implementation of 

the Exchange’s enhancements to its 

trading model.6

Background 

Pursuant to NYSE Rule 104, Exchange 

specialists in their capacity as dealers 

for their assigned securities, maintain 

systems that use proprietary algorithms, 

based on predetermined parameters, to 

electronically participate in the 

Exchange market (‘‘Specialist 

Algorithm’’). The Specialist Algorithm 

communicates with the NYSE Display 

Book system 7 via an Exchange-owned 

external application program interface 

(the ‘‘API’’). The Specialist Algorithm is 

intended to replicate electronically 

some of the activities specialists are 

permitted to engage in on the Floor in 

the auction market and to facilitate the 

specialists’ ability to fulfill their 

obligation to maintain a fair and orderly 

market. 

Specialist Algorithms may generate 

quoting and trading messages as 

prescribed by Exchange Rule 104(b)(i). 

To that end, the Specialist Algorithm 

receives information via the API,8


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