Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices 47991 

8The single exception would be for transactions 

in foreign equity securities executed over-thecounter in a foreign country and reported to the 

regulator of securities markets for that country. See 

NASD Rule 6620(g)(2)(B). Transactions in foreign 

equity securities executed on and reported to a 

foreign securities exchange also are excepted from 

the FINRA reporting requirements. See NASD Rule 

6620(g)(2)(A). 

9See supra note 4. 

10See BNYMellon Letter; Hill Thompson Letter; 

Deltec Letter; Pink OTC Markets Letter; STANY 

Letter. 

11See id. 

12See Pink OTC Markets Letter; STANY Letter. 

13 In approving this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

14 15 U.S.C. 78o–3(b)(6). 

15See supra notes 10 and 11 and accompanying 

text. 

16See Notice, supra note 3. 

17STANY Letter, supra note 4. 

18See supra notes 10 and 11 and accompanying 

text. 

19 15 U.S.C. 78s(b)(2). 

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

disseminate last sale information 

regarding those transactions on a realtime basis. Thus, the proposed rule 

change would eliminate the distinctions 

between domestic, foreign, ADR, and 

Canadian securities and would require 

prompt reporting and real-time 

dissemination for all OTC transactions.8

FINRA believes that the proposal would 

substantially improve the transparency 

of the OTC market. 

FINRA represented that it would 

announce the effective date of the 

proposed rule change in a Regulatory 

Notice to be published no later than 60 

days following Commission approval of 

this proposed rule change. The effective 

date would be 30 days following 

publication of that Regulatory Notice. 

III. Summary of Comments 

The Commission received letters from 

five commenters.9 All of the 

commenters supported the proposal. 

The commenters stated that the 

proposal would lead to greater 

transparency, better price discovery, 

and/or better trading practices, and 

should therefore foster a strong and 

competitive U.S. OTC market in foreign 

securities.10 The commenters also 

unanimously stated that the proposal 

would provide industry participants 

with the ability to monitor the quality 

of executions that they receive in 

foreign securities, which they believe 

would increase competition among 

broker-dealers and enhance best 

execution practices in the industry.11

Two commenters noted that the 

proposal would help prevent improper 

trading practices, such as frontrunning.12

IV. Discussion and Findings 

After careful consideration of the 

proposal and the comments submitted, 

the Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities association.13 In 

particular, the Commission finds that 

the proposed rule change is consistent 

with Section 15A(b)(6) of the Act,14

which requires, among other things, that 

FINRA rules be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, and, in general, to 

protect investors and the public interest. 

FINRA stated in its proposal that it 

believed that prompt last sale reporting 

and real-time dissemination of trade 

reports for all OTC transactions in 

ADRs, foreign securities, and Canadian 

issues would enhance the amount of 

market information available to 

investors and better enable investors to 

monitor the executions they receive in 

these securities. The Commission notes 

that all the commenters agreed with this 

statement.15

In its request for comments, the 

Commission specifically requested 

comment regarding whether the 

proposed rule change would 

significantly change the factors 

considered by foreign private issuers in 

deciding whether to list on a U.S. 

securities exchange and register with 

the Commission, and whether the 

proposed rule change would serve to 

promote the U.S. over-the-counter 

market for unregistered foreign 

securities.16 In response to the first 

inquiry, one commenter stated that it 

did not believe that the proposal would 

‘‘in any way serve to encourage foreign 

firms to trade their issues in the United 

States without registration.’’ 17

Regarding the second inquiry, the 

commenters noted the benefits of greater 

transparency that would allow U.S. 

broker-dealers to better compete with 

foreign markets, and U.S. investors to 

better assess the executions that they 

receive, when effecting OTC 

transactions in foreign securities.18

The Commission believes that it is 

appropriate to eliminate the distinctions 

in trade reporting and dissemination 

that currently exist for OTC transactions 

in domestic, foreign, ADR, and 

Canadian securities. The Commission 

believes that the proposed rule change 

is consistent with the requirements of 

the Act and the rules and regulations 

thereunder applicable to a national 

securities association. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,19 that the 

proposed rule change (File No. SR–

FINRA–2008–016), as modified by 

Amendment No. 1, be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18896 Filed 8–14–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58333; File No. SR–FINRA–

2008–032] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change To Adopt 

FINRA Rules 2350 Through 2359 

(Regarding Trading in Index Warrants, 

Currency Index Warrants, and 

Currency Warrants), FINRA Rule 2360 

(Options), and FINRA Rule 2370 

(Security Futures) in the Consolidated 

FINRA Rulebook 

August 8, 2008. 

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 July 29, 

2008, the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) (f/k/a 

National Association of Securities 

Dealers, Inc. (‘‘NASD’’)) 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 

prepared by FINRA. 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 

FINRA proposes to adopt NASD Rules 

2840 through 2853 regarding Trading in 

Index Warrants, Currency Index 

Warrants, and Currency Warrants, 2860 

(Options), and 2865 (Security Futures) 

as FINRA Rules in the consolidated 

FINRA rulebook (‘‘Consolidated FINRA 

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47992 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices 

3The current FINRA rulebook consists of two sets 

of rules: (1) NASD Rules and (2) rules incorporated 

from NYSE (‘‘Incorporated NYSE Rules’’) (together 

referred to as the ‘‘Transitional Rulebook’’). The 

Incorporated NYSE Rules apply only to those 

members of FINRA that are also members of the 

NYSE (‘‘Dual Members’’). Dual Members also must 

comply with NASD Rules. For more information 

about the rulebook consolidation process, see 

FINRA Information Notice, March 12, 2008 

(Rulebook Consolidation Process). 

4For example, Rule 9b–1(d) under the Act 

requires a broker-dealer to furnish a customer with 

a copy of the options disclosure document before 

accepting an options order from a customer. 

5See Securities Exchange Act Release No. 54084 

(June 30, 2006), 71 FR 38935 (July 10, 2006) (SR–

NASD–2005–087) (approving amendments to the 

NASD’s Rules following Nasdaq’s operation as a 

national securities exchange for Nasdaq UTP Plan 

securities). 

6Upon approval of the proposed rule change, 

FINRA intends to make conforming changes in an 

immediately effective rule filing to NASD Rule 1022 

and IM–1022–1 to change the term ‘‘Registered 

Options and Security Futures Principal’’ to 

‘‘Registered Options Principal.’’ In addition, FINRA 

plans to make the same conforming change to 

NASD Rule 2220 as part of SR–FINRA–2008–013. 

7See Securities Exchange Act Release No. 57775 

(May 5, 2008), 73 FR 26453 (May 9, 2008) (SR–

FINRA–2007–035). 

8 In order to supervise security futures, an 

individual must successfully pass the Series 4 

examination and complete a firm-element 

continuing education program on security futures. 

See NASD Notice to Members 02–73 (November 

2002) (SEC Approves New Rules and Rule 

Amendments Concerning Security Futures). 

Individuals supervising only options are not 

required to complete a firm-element continuing 

education program on security futures. 

9See also CBOE Rule 9.2 and Interpretation .01 

and .02 (specifying the qualification requirements 

for individuals designated as Registered Options 

Principals). 

Rulebook’’),3 and to delete the 

corresponding provisions in 

Incorporated NYSE Rules 414 (Index 

and Currency Warrants), 424 (Report of 

Options), and the 700 Series (Option 

Rules). The proposed rule change would 

renumber NASD Rules 2840 through 

2853 as FINRA Rules 2350 through 

2359, NASD Rule 2860 as FINRA Rule 

2360, and NASD Rule 2865 as FINRA 

Rule 2370 in the Consolidated FINRA 

rulebook. The text of the proposed rule 

change is available at FINRA, the 

Commission’s Public Reference Room, 

and http://www.finra.org. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FINRA included statements concerning 

the purpose of, and basis for, the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. FINRA 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 

FINRA states that as part of the 

process of developing the new 

Consolidated FINRA Rulebook, FINRA 

is proposing to adopt, with minor 

changes described below: (1) NASD 

Rules 2840 through 2853 (regarding 

Trading in Index Warrants, Currency 

Index Warrants, and Currency Warrants) 

as FINRA Rules 2350 through 2359; (2) 

NASD Rule 2860 (Options) as FINRA 

Rule 2360; and (3) NASD Rule 2865 

(Security Futures) as FINRA Rule 2370. 

FINRA states that warrants, options, 

and security futures rules were adopted 

to address the specific risks that pertain 

to these derivative securities, and 

implement provisions of the federal 

securities laws and Commission rules.4

These rules include, among other 

things, provisions requiring specific 

disclosure documents, additional 

diligence in approving the opening of 

accounts, and specific requirements for 

confirmations, account statements, 

suitability, recordkeeping, and 

reporting. The rules also contain 

provisions imposing limits on the size 

of an options or warrant position and on 

the number of options contracts or 

warrants that can be exercised during a 

fixed period. 

Warrant Rules 

FINRA proposes to adopt NASD rules 

on index warrants, currency index 

warrants, and currency warrants, NASD 

Rules 2840 through 2853, as FINRA 

Rules 2350 through 2359, in 

substantially the form they exist today. 

The proposed rule change would 

reorganize certain requirements, 

grouping them along similar subject 

matter lines, by combining the 

statement of general applicability and 

definitions into a single rule (FINRA 

Rule 2351), and creating a single rule 

addressing position and exercise limits 

and liquidations (FINRA Rule 2359). 

Options Rule 

As further described below, FINRA 

proposes to adopt NASD Rule 2860 as 

FINRA Rule 2360 with minor 

modifications to: (1) Delete obsolete 

definitions; (2) change all references to 

‘‘Registered Options and Security 

Futures Principal’’ to ‘‘Registered 

Options Principal;’’ (3) permit a Limited 

Principal-General Securities Sales 

Supervisor to approve the opening of an 

options account; (4) modify the 

confirmation disclosure requirements 

consistent with recent changes to the 

equity confirmation disclosure 

requirements; (5) incorporate NASD 

Interpretative Materials 2860–1 and 

2860–2 into the rule text or as 

Supplementary Material; and (6) codify 

as Supplementary Material the 

provisions in NASD Notice to Members 

07–03 (‘‘Notice 07–03’’) regarding 

control relationships. 

First, FINRA proposes to delete 

extraneous definitions from the options 

rule, many of which became obsolete 

once the provisions in the options rule 

pertaining to NASDAQ options were 

deleted following the separation of 

NASDAQ from NASD.5

Second, FINRA proposes to change 

the term ‘‘Registered Options and 

Security Futures Principal’’ to 

‘‘Registered Options Principal.’’ 6 The 

term Registered Options Principal 

(‘‘ROP’’) was recently changed to 

Registered Options and Security Futures 

Principal (‘‘ROSFP’’).7 However, FINRA 

believes that the change to ROSFP has 

generated confusion among the 

members and believes that reverting to 

ROP will alleviate these issues. In 

addition, FINRA believes using the term 

ROP would promote consistency with 

the rules of the options exchanges all of 

which use the term ROP. FINRA notes 

that the change to the principal title 

does not affect the qualifications needed 

to supervise options or security futures.8

Third, FINRA proposes greater 

flexibility in the area of account 

approval in FINRA Rule 2360(b)(16)(B) 

to allow a Limited Principal-General 

Securities Sales Supervisor (Series 9/ 

10)—in addition to a ROP (Series 4)—

to approve the opening of an options 

account. FINRA believes that the 

proposed rule change is consistent with 

CBOE Rule 9.7 (Opening of Accounts) 

which permits a Series 9/10 qualified 

individual serving as a branch manager 

to approve the opening of an options 

account.9 Under NASD Rule 2860, a 

Series 9/10 may supervise options 

trading activity, but may not approve 

the opening of an options account. 

FINRA believes that individuals who 

have passed the Series 9/10 examination 

are sufficiently qualified to review and 

approve the opening of an options 

account. 

Fourth, consistent with recent 

changes in the listed equity markets, 

FINRA proposes, in adopting FINRA 

Rule 2360(b)(12), to eliminate the 

current requirement that an options 

confirmation specify the exchange(s) 

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Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices 47993 

10See Securities Exchange Act Release No. 57045 

(December 27, 2007) 73 FR 529 (January 3, 2008) 

(SR–FINRA 2007–037). See also FINRA Regulatory 

Notice 07–65, Amendments to NYSE Rule 409(f): 

FINRA Amends NYSE Rule 409(f) (Statements of 

Accounts to Customers) to Eliminate the 

Requirement to Include the Name of the Securities 

Market on which a Transaction is Effected 

(December 2007). 

11Provisions regarding verification of a 

customer’s background and financial information 

have transferred unchanged to FINRA Rule 

2360(b)(16)(C). Members are reminded that they can 

only recommend transactions for the purchase or 

sale (writing) of option contracts if they have 

reasonable grounds for believing, at the time of 

making the recommendation based on any 

information known by the member or associated 

person, that the recommended transaction is not 

unsuitable for the customer. See NASD Rule 

2860(b)(19). 

12One of the underpinnings of the Commodity 

Futures Modernization Act of 2000 is that the 

regulation of security futures should be comparable 

to the regulation of options. In approving NASD 

Rule 2865 (Securities Futures), the Commission 

stated: ‘‘The system of joint regulation of security 

futures established by the Commodity Futures 

Modernization Act is intended to prevent 

competitive advantages from arising solely out of 

differences between securities regulation and 

futures regulation. * * * The Commission believes 

that the rule change should promote just and 

equitable principles of trade by preventing 

regulatory disparities from occurring between 

options and security futures.’’ Securities Exchange 

Act Release No. 46663 (October 15, 2002), 67 FR 

64944 (October 22, 2002) (SR–NASD–2002–40) 

(approving NASD Rules 1022, 1032, 2210, 3010, 

3370, IM–1022–1, and IM–1022–2, 2865, and IM–

2210–7). 

13See Securities Exchange Act Release No. 57775 

(May 5, 2008), 73 FR 26453 (May 9, 2008) (SR–

FINRA–2007–035). 

14As provided in NASD Rule 1022(f)(5), any ROP 

that supervises security futures products must 

complete a firm-element continuing education 

program that addresses security futures and a 

principal’s responsibilities for supervising such 

products. 

15See supra note 13. 

16FINRA states that, moreover, in several 

instances, the Incorporated NYSE Rules are no 

longer applicable by their own terms as the NYSE 

no longer trades options. 

17 15 U.S.C. 78o–3(b)(6). 

upon which the option transaction was 

executed.10

Fifth, FINRA proposes to relocate the 

illustrations of position limit 

calculations in NASD IM–2860–1 

(Position Limits) to Supplementary 

Material .01 of FINRA Rule 2360 and 

incorporate the provisions from NASD 

IM–2860–2 (Diligence in Opening 

Options Accounts) pertaining to 

opening of options accounts into FINRA 

Rule 2360(b)(16)(B) and (b)(16)(C).11

Sixth, FINRA proposes to codify as 

Supplementary Material .02 to FINRA 

Rule 2360 the provisions in Notice 07–

03 pertaining to control relationships, 

which are explicitly incorporated in 

NASD Rule 2860(b)(3)(A)(vii)b.2.B.i. 

Notice 07–03 sets forth the conditions 

under which FINRA will deem that no 

control relationship exists between 

affiliates and between separate and 

distinct trading units within the same 

entity. FINRA believes that adding the 

relevant provisions of Notice 07–03 as 

Supplementary Material will make the 

rule more self-contained and easier to 

follow. 

Security Futures Rule 

FINRA proposes to adopt NASD Rule 

2865 as FINRA Rule 2370 with minor 

changes to preserve the general parallel 

treatment of options and security 

futures.12 In particular, FINRA proposes 

to update the provisions regarding 

discretionary accounts to conform to 

recent rule amendments made to the 

options rule.13 Under the proposed rule 

change, each firm must designate 

specific principals qualified to 

supervise security futures activities to 

review discretionary accounts.14 A 

principal other than the principal who 

accepted the account would review the 

acceptance of each discretionary 

account to determine that the principal 

accepting the account had a reasonable 

basis for believing that the customer was 

able to understand and bear the risks of 

the strategies or transactions proposed 

and must maintain a record of the basis 

for such determination. 

To mirror recent changes to the 

options rule, the proposed rule change 

would eliminate the requirement that 

discretionary orders be approved on the 

day of entry by a principal qualified to 

supervise security futures activities if a 

firm uses computerized surveillance 

tools. Discretionary orders for firms 

using computerized surveillance tools 

instead may be reviewed in accordance 

with the member firm’s written 

supervisory procedures. Firms that do 

not use computerized surveillance tools 

must, as they do today, establish and 

implement procedures requiring 

principals qualified to supervise 

security futures activities who have 

been designated to review discretionary 

accounts to approve and initial each 

discretionary order on the day 

entered.15

Finally, FINRA proposes to limit the 

duration of the time and price 

discretionary authority to the end of the 

business day on which the customer 

granted such discretion, absent specific 

written contrary indication signed and 

dated by the customer. This limitation 

would not apply to discretion exercised 

in an institutional account, as defined in 

NASD Rule 3110(c)(4), pursuant to 

Good-Till-Canceled instructions issued 

on a ‘‘not held’’ basis. The proposed 

rule change would require that any 

exercise of time and price discretion be 

reflected on the order ticket. These 

changes mirror the limitations to 

discretionary authority provided in 

NASD Rule 2510(d) and the options 

rule. 

Deleted Rules 

FINRA proposes to delete the 

following Incorporated NYSE Rules as 

the substance of such rules is addressed 

in the proposed FINRA rules: 16

Incorporated NYSE Rules 414 (Index 

and Currency Warrants); 424 (Reports of 

Options); 700 (Applicability, Definitions 

and References); 704 (Position Limits); 

705 (Exercise Limits); 707 (Liquidation 

of Positions); 709 (Other Restrictions on 

Exchange Option Transactions and 

Exercises); 720 (Registration of Options 

Principals); 721 (Opening of Accounts); 

722 (Supervision of Accounts); 723 

(Suitability); 724 (Discretionary 

Accounts); 725 (Confirmations); 726 

(Delivery of Options Disclosure 

Document and Prospectus); 727 

(Transactions with Issuers); 728 

(Restricted Stock); 730 (Statement of 

Accounts); 732 (Customer Complaints); 

780 (Exercise of Option Contracts); 781 

(Allocation of Exercise Assignment 

Notices); and 791 (Communications to 

Customers). 

FINRA would announce the 

implementation date of the proposed 

rule change in a Regulatory Notice to be 

published no later than 60 days 

following Commission approval. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,17 which 

requires, among other things, that 

FINRA rules must be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, and, in 

general, to protect investors and the 

public interest. The proposed rule 

change makes minor changes to rules 

that have proven effective in meeting 

the statutory mandates. Moreover, as 

described in the proposed rule change, 

certain amended provisions seek to 

conform FINRA rules to existing 

provisions of other self-regulatory 

organizations or are consistent with 

other rule changes. FINRA believes that 

the proposed rules promote the public 

interest and protect investors who 

invest in and trade these derivative 

products. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

mstockstill on PROD1PC66 with NOTICES

47994 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices 

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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 

Written comments were neither 

solicited nor received. 

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–FINRA–2008–032 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–FINRA–2008–032. This file 

number should be included on the 

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

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for inspection and copying in 

the Commission’s Public Reference 

Room, 100 F Street, NE., Washington, 

DC 20549, on official business days 

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

Copies of the filing also will be available 

for inspection and copying at the 

principal office of FINRA. 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–FINRA–

2008–032 and should be submitted on 

or before September 5, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18897 Filed 8–14–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58311; File No. SR–NYSE–

2008–74] 

Self-Regulatory Organizations; Notice 

of Filing of Proposed Rule Change by 

New York Stock Exchange LLC To 

Enable the Exchange To Waive Annual 

Listing Fees for Securities Transferring 

From the Amex or NYSE Arca, Inc. 

August 5, 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 August 4, 2008, the 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, II, and III below, which items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to provide 

that, with retroactive effect from January 

1, 2008, there shall be no annual fee 

payable to the Exchange for the 

remainder of the calendar year in which 

the transfer occurs for any class of 

securities of a company listed on the 

American Stock Exchange (the ‘‘Amex’’) 

that transfers the listing of its primary 

class of common shares to the Exchange. 

This proposed rule change (i) is 

conditioned on the consummation of 

NYSE Euronext’s acquisition of the 

Amex (the ‘‘Merger’’), (ii) will not take 

effect until the date of consummation of 

the Merger, and (iii) will be of no further 

effect if the closing of the Merger does 

not take place by March 31, 2009. The 

amendment also provides that 

companies transferring the listing of 

their primary class of common stock 

from NYSE Arca, Inc. (‘‘NYSE Arca’’) to 

the Exchange (with respect to which the 

Exchange already waives annual fees for 

the first part year) will not be charged 

the prorated annual fee in the first year 

of listing for any class of securities that 

is transferred in connection with the 

transfer of the common stock. 

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 these statements may be examined at 

the places specified in Item IV below. 

The 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 

The Exchange proposes to amend 

Section 902.02 of the Manual to provide 

that, with retroactive effect from January 

1, 2008, there shall be no annual fee 

payable to the Exchange for the 

remainder of the calendar year in which 

the transfer occurs for any class of 

securities of a company listed on the 

Amex that transfers the listing of its 

primary class of common shares to the 

Exchange. This proposed rule change (i) 

is conditioned on the consummation of 

Merger, (ii) will not take effect until the 

date of consummation of the Merger, 

and (iii) will be of no further effect if the 

closing of the Merger does not take 

place by March 31, 2009. The 

amendment also provides that 

companies transferring the listing of 

mstockstill on PROD1PC66 with NOTICES