Document ID: SEC-2009-0466-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2009-04-06T04:00Z

[Federal Register: April 6, 2009 (Volume 74, Number 64)]
[Notices]               
[Page 15538-15540]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06ap09-133]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59659; File No. SR-NYSE-2009-36]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change by 
New York Stock Exchange LLC Extending to September 1, 2009, the 
Operative Date of New York Stock Exchange Rule 2 Requirement That NYSE-
Only Member Organizations Apply for and be Approved as a Member of the 
Financial Industry Regulatory Authority, Inc.

March 31, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 15539]]

(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 25, 2009, the New York Stock Exchange, LLC (``NYSE'' or the 
``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 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\ 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 extend to September 1, 2009, the operative 
date of New York Stock Exchange (``NYSE'' or the ``Exchange'') Rule 2 
requirement that NYSE-only member organizations apply for and be 
approved as a member of the Financial Industry Regulatory Authority, 
Inc. (``FINRA''). The text of the proposed rule change is available at 
the Exchange, the Commission's Public Reference Room, and http://
www.nyse.com.

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

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

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

1. Purpose
    The Exchange is proposing to extend to September 1, 2009, the grace 
period for NYSE-only member organizations to apply for and be approved 
as a FINRA member, as required by NYSE Rule 2.
    In connection with the consolidation of NASD and NYSE Regulation 
member firm regulation operations into FINRA, which closed on July 30, 
2007, the Exchange amended NYSE Rule 2 to require NYSE member 
organizations to also be FINRA members.\3\ In connection with those 
rule changes, the Commission approved a 60-day grace period within 
which NYSE-only member organizations must apply for and be approved for 
FINRA membership. In that rule filing, NYSE-only member organizations 
were defined as those member organizations that were not NASD members 
as of the date of the closing of the FINRA transaction. This grace 
period began on October 12, 2007, the date of Commission approval of 
the Exchange's rule filing. In furtherance of the consolidation, FINRA 
adopted NASD IM-1013-1 to enable eligible NYSE member organizations to 
become FINRA members though an expedited process (the ``FINRA Waive-in 
application process'').\4\
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    \3\ See Securities Exchange Act Release No. 56654 (Oct. 12, 
2007), 72 FR 59129 (Oct. 18, 2007) (SR-NYSE-2007-67).
    \4\ See Securities Exchange Act Release No. 56653 (Oct. 12, 
2007), 72 FR 59127 (Oct. 18, 2007) (SR-NASD-2007-56.
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    At the close of the 60-day grace period, all but two of the former 
NYSE-only member organizations had applied for and been approved as 
FINRA members. On December 12, 2007, the Exchange filed for an 
extension of the grace period to June 30, 2008 for those two firms.\5\ 
On June 30, 2008, the Exchange filed for another extension of the grace 
period to December 31, 2008.\6\ On December 22, 2009, the Exchange 
filed for an additional extension to March 27, 2009.\7\ In that filing, 
the Exchange noted that those two firms had unique member qualification 
issues and were ineligible to participate in the FINRA Waive-in 
application process. As of December 19, 2008, one of those two firms 
has been approved as a FINRA member. With respect to the other firm, 
because the Exchange is working on a rule filing to amend Rule 2 to 
permit a broker dealer to be an NYSE member organization without a 
FINRA membership, the Exchange believes that the grace period should be 
further extended so that the remaining firm does not have to re-apply 
for Exchange membership if the proposed change to Rule 2 is approved. 
Accordingly, the NYSE proposes to extend the grace period to September 
1, 2009 for the firm that was an NYSE member organization as of July 
30, 2007, but not a FINRA member.\8\
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    \5\ See Securities Exchange Act Release No. 56953 (Dec. 12, 
2007), 72 FR 71990 (Dec. 19, 2007) (SR-NYSE-2007-115).
    \6\ See Securities Exchange Act Release No. 58096 (July 3, 
2008), 73 FR 39764 (July 10, 2008) (SR-NYSE-2008-54).
    \7\ See Securities Exchange Act Release No. 59143 (Dec. 22, 
2008), 73 FR 80491 (Dec. 31, 2008) (SR-NYSE-2008-135).
    \8\ The proposed September 1, 2009 date conforms to the grace 
period available under NYSE Rule 300.10T for eligible NYSE Amex US 
LLC (``NYSE Amex'') member organizations that are seeking to be 
waived in as an NYSE member organization pursuant to NYSE Rule 2.10. 
Pursuant to Rule 300.10T, such NYSE Amex member organizations have 
six months from March 2, 2009, which is the date that the 86 Trinity 
Permits expired, to comply with Exchange rules, including the Rule 
2(b) requirement pertaining to FINRA membership.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
and furthers the objectives of Section 6(b)(5) of the Act,\9\ in that 
it is designed to prevent fraudulent and manipulative practices, to 
promote just and equitable principles of trade, to remove impediments 
to, and perfect the mechanisms 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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    \9\ 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 
result in 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 foregoing rule change is being filed for immediate 
effectiveness pursuant to Section 19(b)(3)(A) \10\ of the Act and Rule 
19b-4(f)(3) \11\ promulgated thereunder. The proposed rule change goes 
solely to the administration of the self-regulatory organization in 
that it is not a substantive change to NYSE Rule 2 and simply extends a 
pre-existing grace period.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(3).
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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.

[[Page 15540]]

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-2009-36 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2009-36. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make publicly available. All 
submissions should refer to File Number SR-NYSE-2009-36 and should be 
submitted on or before April 27, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-7662 Filed 4-3-09; 8:45 am]

BILLING CODE 8010-01-P