Document ID: SEC-2008-0023-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange, LLC
Posted Date: 2008-01-07T05:00Z

[Federal Register: January 7, 2008 (Volume 73, Number 4)]
[Notices]               
[Page 1248-1249]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07ja08-64]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57065; File No. SR-NYSE-2007-119]

 
Self-Regulatory Organizations; New York Stock Exchange, LLC; 
Notice of Filing of Proposed Rule Change Relating to the Adoption of 
New Exchange Rule 309 (Failure To Pay Fees)

 December 28, 2007.
    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 December 21, 2007, 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 substantially 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\ 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

    NYSE proposes to adopt new Exchange Rule 309, which delineates 
procedures for the collection of fee arrearages due the Exchange. The 
text of the proposed rule change is set forth below. New text is in 
italics.
Admission of Members (Rules 300-324)
* * * * *

Rule 309. Failure to Pay Exchange Fees

    Any member, member organization or allied member who shall not pay 
a fee or any other sums due to the Exchange, within forty-five days 
after the same shall become payable, shall be reported to the Chief 
Financial Officer of the Exchange or designee who, after notice has 
been given to such member, member organization or allied member of such 
arrearages, may suspend access to some or all of the facilities of the 
Exchange until payment is made. Except that failure to pay any fine 
levied in connection with a disciplinary action shall be governed by 
Exchange Rule 476(k) (Disciplinary Proceedings Involving Charges 
Against Members, Member Organizations, Allied Members, Approved 
Persons, Employees, or Others).
    Denial of access to some or all of the facilities of the Exchange 
through suspension under the provisions of this Rule shall not prevent 
the member, member organization or allied member from being proceeded 
against for any offense other than that for which such member, member 
organization, or allied member was suspended.
* * * * *

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 these 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 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 seeks to adopt new procedures that relate to the 
collection of fees due the Exchange. Currently, Exchange Rule 476(k) 
delineates the procedures to address the failure of members, member 
organizations or allied members to pay a fine (i.e., a fine levied in 
connection with a disciplinary proceeding and related fees also 
associated with a disciplinary proceeding), or any other sum due the 
Exchange. Specifically, Exchange Rule 476(k) provides that upon written 
notice to such members, member organizations or allied members and 
notification of the Chairman of the Board of Directors of the Exchange 
of the arrearage, the Board of Directors may suspend the member, member 
organization or allied member for failure to pay the arrearages due the 
Exchange until payment is made.
    The Exchange now proposes to adopt new Exchange Rule 309 to provide 
procedures to address members, member organizations and allied members 
who fail to pay fees and any other sums due the Exchange. Types of 
payments that would be considered a ``fee'' under proposed Rule 309 
include, but are not limited to, regulatory fees (i.e., Gross Financial 
and Operational Combined Uniform Single Report (FOCUS) revenue fees and 
trading floor regulatory fees), trading license fees, and transaction 
charges. Additionally, examples of payments that would constitute ``any 
other sums'' include,

[[Page 1249]]

but are not limited to, charges for using Exchange Floor facilities and 
equipment and phone service charges.\3\
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    \3\ Telephone bills for Exchange provided portable phones are 
paid by the Exchange and thereafter the Exchange submits an invoice 
to the member, member organization, and allied member for 
reimbursement.
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    Pursuant to proposed Exchange Rule 309, if payment is not made 
within forty-five days, notice of the arrearage will be given to the 
member, member organization or allied member and reported to Chief 
Financial Officer (``CFO'') of the Exchange or a designee. The CFO or 
designee will be responsible for determining and taking any remedial 
action he or she deems appropriate, including suspension of the 
delinquent member's, member organization's or allied member's access to 
one or more Exchange facilities.
    The terms ``fees'' and ``any other sums'' in the text of proposed 
Exchange Rule 309 will not include fines levied in connection with a 
disciplinary proceeding. Failure to pay such disciplinary fines will 
continue to be governed by the provisions of Rule 476(k). In any event, 
the Exchange Treasurer will not be precluded from presenting notice of 
any arrearage to the Board pursuant to Exchange Rule 476(k) where 
appropriate.
    The current prerequisite of applying to the Exchange Board of 
Directors to address the issue of other unpaid sums due the Exchange is 
an inefficient and onerous process. Presently, invoices for fees and 
any other sum due the Exchange are issued on a monthly basis to 
members, member organizations and allied members. Payment is due upon 
presentation of the invoice. After thirty days, another invoice is 
issued for the current month and any outstanding balance due the 
Exchange. Pursuant to Rule 476(k), the ability to suspend members, 
member organizations and allied members for arrearages becomes 
operative after 45 days. The relief afforded in Rule 476(k) currently 
is not utilized by the Exchange; instead, arrearages are referred to 
the Exchange's collections department for resolution.\4\ In order for 
the Exchange to effect the efficient operations of its business, the 
authority to address non-payment of sums due the Exchange, other than 
disciplinary fines and related fees governed by Rule 476(k), is more 
appropriately vested with Exchange senior management, who are more 
familiar with the daily operation of the Exchange and thus more adept 
than the Board of Directors at addressing these matters.
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    \4\ The collections department similarly does not avail itself 
of the recourse provided in Exchange Rule 476(k).
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    Accordingly, the Exchange seeks to have notice of overdue fees 
reported to the CFO or his designee and to vest in the CFO or his 
designee the authority to determine what if any remedial action should 
be taken upon receipt of a report that a member, member organization or 
allied member failed to pay a fee.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirement under Section 6(b)(5) \5\ of the Securities 
Exchange Act of 1934 (the ``Act'') \6\ that an Exchange have rules that 
are designed 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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    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 15 U.S.C. 78a.
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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 NYSE 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 rule-comments@sec.gov. Please include 

File Number SR-NYSE-2007-119 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-2007-119. 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 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-2007-119 and should be 
submitted on or before January 28, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E7-25597 Filed 1-4-08; 8:45 am]

BILLING CODE 8011-01-P