Document ID: SEC-2007-0471-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-03-29T04:00Z

[Federal Register: March 29, 2007 (Volume 72, Number 60)]
[Notices]               
[Page 14842-14844]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29mr07-129]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55517; File No. SR-NYSE-2007-06]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change to NYSE Rule 440A (``Telephone 
Solicitations'')

March 23, 2007.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act''),\2\ and Rule 19b-4 thereunder, notice is hereby given 
that on January 25, 2007, the New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed amendments to its Rule 440A, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The New York Stock Exchange LLC is filing with the Securities and 
Exchange Commission proposed Rule 440A (``Telephone Solicitations'') 
which addresses member organizations' telephone solicitations of 
customers.

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 the proposed rule change is available on the

[[Page 14843]]

NYSE's Web site (http://www.NYSE.com), at the NYSE's principal office, 

and at the Commission's Public Reference Room. The Exchange 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 Rule 440A (the ``Rule'') addresses member organizations' 
telephone solicitations of customers. Rule 440A(g) provides ``No member 
or member organization may use a telephone facsimile machine, computer 
or other device to send an unsolicited advertisement to a telephone 
facsimile machine, computer or other device.''
    Subsection 440A(g)(1) provides that a facsimile advertisement is 
not ``unsolicited'' where the recipient has granted the member 
organization prior express invitation or permission to deliver the 
advertisement, as further defined in the Rule. This proposed amendment 
to NYSE Rule 440A would provide that such an advertisement also will 
not be considered ``unsolicited'' where there is an ``established 
business relationship'' as defined in the present Rule 440A(j).
    In addition, changes are proposed to delete the term ``member'' as 
used in the Rule to reflect the recent reorganization of the 
Exchange,\3\ and the term ``allied member'' as redundant within the 
context of the present regulation.
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    \3\ See Exchange Act Release No. 53382 (Feb. 27, 2006), 71 FR 
11251 (Mar. 6, 2006) (SR-NYSE-2005-77).
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Background
    The amendments to Rule 440A(g) were adopted by the Exchange on 
December 2, 2004 \4\ to incorporate regulations issued by the Federal 
Communications Commission (``FCC'') and the Federal Trade Commission 
(``FTC'') relating to the implementation of the National Do Not Call 
registry and the amendments to the Telephone Consumer Protection Act of 
1991.\5\ The FCC and FTC regulations contained no exception for 
facsimiles sent to customers with which a broker-dealer had an 
``established business relationship'' as such term was defined. 
Subsequently, Congress passed legislation \6\ which restored an 
exemption for unsolicited faxes sent to a recipient with whom the 
sender had an established business relationship. Accordingly, the 
proposed amendments to NYSE Rule 440A(g)(1) will add an exception for 
established business relationships to the definition of ``unsolicited'' 
and will also set forth the measures necessary for a customer to opt 
out of the receipt of further communications. These standards, which 
are taken from applicable FCC regulations,\7\ generally require that 
the member organization and the person not only have an established 
business relationship,\8\ but also that the member organization obtain 
the fax number from the recipient (or the recipient's web site, 
directory, or advertisement). Further, the recipient must not have 
stated on those materials that they do not accept unsolicited 
advertisements at the listed number. The member organization must also 
take reasonable steps to verify that the recipient consented to have 
the number listed.\9\
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    \4\ See Exchange Act Release No. 34-52579 (Oct. 7, 2005), 70 FR 
60119 (Oct. 14, 2005) (SR-NYSE-2004-73).
    \5\ Rules and Regulations Implementing the Telephone Consumer 
Protection Act of 1991, FCC 03-153 (Jun. 26, 2003), 68 FR 44144 
(Jul. 25, 2003).
    \6\ Junk Fax Prevention Act of 2005, Pub. L. 109-21, 119 Stat. 
359 (2005).
    \7\ FCC 06-42 (Apr. 5, 2006), 71 FR 56893 (Sept. 28, 2006).
    \8\ An established business relationship is defined as a prior 
existing relationship formed by voluntary two-way communication 
between a member organization and a person where the person has, 
generally speaking, done business with the member organization 
within the 18 months preceding the telephone call, the member 
organization is the broker-dealer of record for the person's account 
within those 18 months, or the person has contacted the member 
organization to inquire about a product or service within the three 
months preceding the telephone call.
    \9\ The Exchange expanded this description of the standards and 
added the definition of ``established business relationship'' to 
this notice during a telephone conversation between William Jannace, 
Managing Director, Rule and Interpretive Standards, NYSE Regulation, 
and Elizabeth MacDonald, Special Counsel, Division of Market 
Regulation, Commission, March 20, 2007.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(5) \10\ of the Act which requires NYSE to have rules 
that 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, in general, to protect investors and the public interest. The 
proposed amendments will move the Rule into conformity with revised 
federal regulatory standards and ensure that customers are able to opt 
out of the receipt of undesired communications.
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    \10\ 15 U.S.C. 78f(b)(5).
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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

    The Exchange has neither solicited nor received written comments on 
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 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 rule-comments@sec.gov. Please include 

File Number SR-NYSE-2007-06 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2007-06. 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

[[Page 14844]]

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. Copies of such filing also will be available for 
inspection and copying at the principal office of the NYSE. 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-2007-06 and should be 
submitted on or before April 19, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-5816 Filed 3-28-07; 8:45 am]

BILLING CODE 8010-01-P