Document ID: SEC-2010-0460-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2010-03-26T04:00Z

[Federal Register: March 26, 2010 (Volume 75, Number 58)]
[Notices]               
[Page 14650-14652]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26mr10-108]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61743; File No. SR-NYSE-2010-23]

 
Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by New York Stock Exchange LLC Deleting NYSE Rule 446 and 
Adopting New Rule 4370 To Correspond With Rule Changes Filed by the 
Financial Industry Regulatory Authority, Inc.

March 19, 2010.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on March 11, 2010, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I, 
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\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to delete NYSE Rule 446 and adopt new Rule 
4370 to correspond with rule changes filed by the Financial Industry 
Regulatory Authority, Inc. (``FINRA'') and approved by the 
Commission.\4\ The text of the proposed rule change is available at the 
Exchange, the Commission's Public Reference Room, and http://
www.nyse.com.
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    \4\ See Securities Exchange Act Release No. 60534 (August 19, 
2009), 74 FR 44410 (August 28, 2009) (order approving SR-FINRA-2009-
036).
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

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

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

1. Purpose
    The purpose of the proposed rule changes is to delete NYSE Rule 446 
(Business Continuity and Contingency Plans) and adopt new Rule 4370 
(Business Continuity Plans and Emergency Contact Information) to 
correspond with rule changes filed by FINRA and approved by the 
Commission.
Background
    On July 30, 2007, FINRA's predecessor, the National Association of 
Securities Dealers, Inc. (``NASD''), and NYSE Regulation, Inc. 
(``NYSER'') consolidated their member firm regulation operations into a 
combined organization, FINRA. Pursuant to Rule 17d-2 under the Act, 
NYSE, NYSER and FINRA entered into an agreement (the ``Agreement'') to 
reduce regulatory duplication for their members by allocating to FINRA 
certain regulatory responsibilities for certain NYSE rules and rule 
interpretations (``FINRA Incorporated NYSE Rules''). NYSE Amex LLC 
(``NYSE Amex'') became a party to the Agreement effective December 15, 
2008.\5\
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    \5\ See Securities Exchange Act Release Nos. 56148 (July 26, 
2007), 72 FR 42146 (August 1, 2007) (order approving the Agreement); 
56147 (July 26, 2007), 72 FR 42166 (August 1, 2007) (SR-NASD-2007-
054) (order approving the incorporation of certain NYSE Rules as 
``Common Rules''); and 60409 (July 30, 2009), 74 FR 39353 (August 6, 
2009) (order approving the amended and restated Agreement, adding 
NYSE Amex LLC as a party). Paragraph 2(b) of the Agreement sets 
forth procedures regarding proposed changes by FINRA, NYSE or NYSE 
Amex to the substance of any of the Common Rules.
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    As part of its effort to reduce regulatory duplication and relieve 
firms that are members of FINRA, NYSE and NYSE Amex of conflicting or 
unnecessary regulatory burdens, FINRA is now engaged in the process of 
reviewing and amending the NASD and FINRA Incorporated NYSE Rules in 
order to create a consolidated FINRA rulebook.\6\
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    \6\ FINRA's rulebook currently has three sets of rules: (1) NASD 
Rules, (2) FINRA Incorporated NYSE Rules, and (3) consolidated FINRA 
Rules. The FINRA Incorporated NYSE Rules apply only to those members 
of FINRA that are also members of the NYSE (``Dual Members''), while 
the consolidated FINRA Rules apply to all FINRA members. For more 
information about the FINRA rulebook consolidation process, see 
FINRA Information Notice, March 12, 2008.
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Proposed Conforming Amendments to NYSE Rules
    In 2008, FINRA deleted FINRA Incorporated NYSE Rule 446 (Business

[[Page 14651]]

Continuity and Contingency Plans) as substantively duplicative of NASD 
Rules 3510 (Business Continuity Plans) and 3520 (Emergency Contact 
Information).\7\ Correspondingly, the Exchange amended NYSE Rule 446 
(Business Continuity and Contingency Plans) to remove the existing text 
and incorporate NASD Rules 3510 and 3520 by reference.\8\ Subsequently, 
FINRA adopted, subject to certain amendments, NASD Rules 3510 and 3520 
as consolidated FINRA Rule 4370 (Business Continuity Plans and 
Emergency Contact Information).\9\
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    \7\ See Securities Exchange Act Release No. 58533 (September 12, 
2008), 73 FR 54652 (September 22, 2008) (order approving SR-FINRA-
2008-036).
    \8\ See Securities Exchange Act Release No. 58549 (September 15, 
2008), 73 FR 54444 (September 19, 2008) (order approving SR-NYSE-
2008-080).
    \9\ See Securities Exchange Act Release No. 60534 (August 19, 
2009), 74 FR 44410 (August 28, 2009).
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    In order to harmonize the NYSE Rules with the approved consolidated 
FINRA Rules, the Exchange correspondingly proposes to delete NYSE Rule 
446 and replace it with proposed NYSE Rule 4370, which is substantially 
similar to the new FINRA Rule.\10\ As proposed, NYSE Rule 4370 adopts 
the same language as FINRA Rule 4370, except for substituting for or 
adding to, as needed, the term ``member organization'' for the term 
``member'', and making corresponding technical changes that reflect the 
difference between NYSE's and FINRA's membership structures. In 
addition, in paragraph (f)(2) to proposed Rule 4370, the Exchange added 
a cross-reference to NYSE Rule 416A to ensure that those Exchange 
members and member organizations that are not FINRA members are 
required to update the contact information for emergency personnel in 
accordance with NYSE Rules.
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    \10\ NYSE Amex has submitted a companion rule filing amending 
its rules in accordance with FINRA's rule changes. See SR-NYSE-Amex-
2010-26.
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    Finally, in order to ensure that both proposed NYSE Rule 4370 and 
FINRA Rule 4370 are fully harmonized, the Exchange also proposes to add 
Supplementary Material .01 to NYSE Rule 4370 to provide that, for the 
purposes of the rule, the term ``associated person'' shall have the 
same meaning as the terms ``person associated with a member'' or 
``associated person of a member'' as defined in Article I (rr) of the 
FINRA By-Laws.
    In addition, the Exchange respectfully requests that the effective 
date for the proposed rule changes be retroactive to December 14, 2009, 
the same effective date for FINRA's rule changes.\11\ Approval 
retroactively effective to December 14, 2009, would ensure that the 
proposed rule changes are operative and effective at the same time as 
FINRA's rule changes, that there are no regulatory gaps between the 
FINRA and NYSE Rules and that, as applicable, the NYSE Rules maintain 
their status as Common Rules under the 17d-2 Agreement.\12\
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    \11\ See FINRA Regulatory Notice 09-60 (October 15, 2009).
    \12\ As provided in paragraph 2(b) of the 17d-2 Agreement, FINRA 
and NYSE will amend the list of Common Rules to conform to the rule 
changes proposed herein.
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2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with Section 6(b) of the Act,\13\ in general, and further the 
objectives of Section 6(b)(5) of the Act,\14\ in particular, in that 
they are designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and, in general, to protect investors and the 
public interest.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule changes support the 
objectives of the Act by providing greater harmonization between NYSE 
Rules and FINRA Rules (including Common Rules) of similar purpose, 
resulting in less burdensome and more efficient regulatory compliance 
for Dual Members. To the extent the Exchange has proposed changes that 
differ from the FINRA version of the Rules, such changes are technical 
in nature and do not change the substance of the proposed NYSE Rules.

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

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

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

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

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

    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-2010-23 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-2010-23. 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,\15\ 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 Web site 
viewing and printing in the Commission's Public Reference Section, 100 
F Street, NE., Washington, DC 20549-1090 between the hours of 10 a.m. 
and 3 p.m. Copies of such filing will also be available for inspection 
and copying at the NYSE's

[[Page 14652]]

principal office and on its Internet Web site at http://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-2010-23 
and should be submitted on or before April 16, 2010.
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    \15\ The text of the proposed rule change is available on the 
Commission's Web site at http://www.sec.gov/.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-6679 Filed 3-25-10; 8:45 am]
BILLING CODE 8011-01-P