Document ID: SEC-2008-1279-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2008-09-19T04:00Z

[Federal Register: September 19, 2008 (Volume 73, Number 183)]
[Notices]               
[Page 54444-54446]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19se08-109]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58549; File No. SR-NYSE-2008-80]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto Conforming Certain NYSE Rules to Changes to 
NYSE Incorporated Rules Recently Filed by the Financial Industry 
Regulatory Authority, Inc.

September 15, 2008.
    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 September 5, 2008, 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 
and II below, which Items have been prepared by the self-regulatory 
organization. On September 11, 2008, the Exchange filed Amendment No. 
1. The Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, 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 amend certain New York Stock Exchange 
(``NYSE'' or the ``Exchange'') Rules to conform with proposed 
amendments to certain NYSE Incorporated Rules (defined below) recently 
filed by the Financial Industry Regulatory Authority, Inc. (``FINRA'') 
\4\ to reduce regulatory duplication and relieve firms that are members 
of both FINRA and the Exchange of conflicting or unnecessary regulatory 
burdens in the interim period

[[Page 54445]]

prior to completion of a consolidated FINRA rulebook.
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    \4\ See Securities Exchange Act Release No. 58533 (September 12, 
2008) (SR-FINRA-2008-036).
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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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On July 30, 2007, NASD and NYSE Regulation, Inc. consolidated their 
member firm regulation operations into a combined organization, 
FINRA.\5\ As noted above, pursuant to its new regulatory 
responsibilities, FINRA recently filed proposed amendments to certain 
NYSE Incorporated Rules (and applicable Rule Interpretations). The NYSE 
hereby proposes to amend its version of these same rules to conform to 
the proposed changes filed by FINRA.
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    \5\ Pursuant to Rule 17d-2 under the Securities Exchange Act of 
1934, as amended (the ``Exchange Act''), NYSE, NYSE Regulation, 
Inc., and NASD entered into an agreement (the ``Agreement'') to 
reduce regulatory duplication for firms that are members of FINRA 
and also members of NYSE on or after July 30, 2007 (``Dual 
Members''), by allocating to FINRA certain regulatory 
responsibilities for selected NYSE rules. The Agreement includes a 
list of all of those NYSE and NASD rules for which FINRA has assumed 
regulatory responsibilities (``Common Rules''). See Securities 
Exchange Act Release No. 56148 (July 26, 2007), 72 FR 42146 (August 
1, 2007) (Notice of Filing and Order Approving and Declaring 
Effective a Plan for the Allocation of Regulatory Responsibilities). 
The Common Rules include those NYSE rules that FINRA has 
incorporated into its rulebook (the ``NYSE Incorporated Rules''). 
See Securities Exchange Act Release No. 56147 (July 26, 2007), 72 FR 
42166 (August 1, 2007) (Notice of Filing and Order Granting 
Accelerated Approval of Proposed Rule Change to Incorporate Certain 
NYSE Rules Relating to Member Firm Conduct; File No. SR-NASD-2007-
054). Paragraph 2(b) of the 17d-2 Agreement sets forth procedures 
regarding proposed changes by either NYSE or FINRA to the substance 
of any of the Common Rules.
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    The amendments proposed by FINRA fall into the following 
categories: \6\
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    \6\ For more detail, see Securities Exchange Act Release No. 
58103 (July 3, 2008), 73 FR 40403 (July 14, 2008) (SR-FINRA-2008-
036).
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     Replacing the term ``allied member'' with the newly 
defined category of ``principal executive'', and making corresponding 
technical changes as needed, in NYSE Incorporated Rules 2, 2A, 311-313, 
321, 342, 345, 345A, 346, 351-354, 401, 405, 407-410, 414, 424, 431, 
435, 440F, 440G, 477, 704, 705, 723, 724 and 791.
     Repositioning and consolidating certain NYSE Incorporated 
Rules. In order to consolidate all ``Buy-In'' requirements and 
procedures into one rule, FINRA proposes to reposition NYSE 
Incorporated Rule 283 and 285-290 as supplementary material in NYSE 
Incorporated Rule 282, and to make conforming changes to NYSE 
Incorporated Rule 134. FINRA also proposes to move certain provisions 
of NYSE Incorporated Rule 407 to Common Rule 346.
     Deleting NYSE Incorporated Rules that are obsolete or no 
longer applicable, including Rules 311(h) and 436.
     Eliminating certain provisions of NYSE Incorporated Rules 
that do not have a corresponding NASD equivalent, and therefore are 
deemed unnecessary rules, including the training requirements and 
registration for ``securities trader'' under Rule 345, Rule 345(b) and 
Rule 346(c).
     Additional amendments to further harmonize certain NYSE 
and NASD Rules, including NYSE Incorporated Rules 342.13(a), 346(e), 
346.10, 351.13, 352(c) and (d), and 408(a). In order to further 
harmonize NYSE Incorporated Rule 282 with NASD's 11000 Rule Series, 
FINRA also proposes to add as supplementary material the substance of 
NYSE Rule 140 and provisions from NASD Rule 11810.
     Deleting NYSE Incorporated Rules that are substantively 
duplicative of existing NASD Rules and procedures, including Rules 404, 
412 and 446. Similarly, FINRA proposes limiting application of NYSE 
Incorporated Rule 345(a) to securities lending representatives and 
supervisors only, since registered representatives and their 
supervisors are already addressed by NASD Rule 1031. For these 
particular proposed changes, the Exchange proposes to amend NYSE Rules 
404, 412, 446 and 345(a) to incorporate by reference the applicable 
NASD Rules that will be applied by FINRA going forward.\7\
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    \7\ The Exchange recognizes that the proposed amendments to NYSE 
Rules 404, 412, 446 and 345(a) will remove these Rules from their 
status as Common Rules under the 17d-2 Agreement. Notwithstanding, 
FINRA will continue to provide regulatory services to the Exchange 
with respect to these Rules pursuant to the existing Regulatory 
Services Agreement, dated July 30, 2007, by and among FINRA, the 
Exchange and NYSE Regulation, Inc.
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    The Exchange proposes to amend its version of the above-referenced 
NYSE Incorporated Rules to conform to FINRA's proposed rule changes. 
The Exchange proposes that the operative date of the proposed rule 
changes be the same as the operative date of FINRA's proposed 
amendments to the NYSE Incorporated Rules and Rule Interpretations.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
and furthers the objectives of Section 6(b)(5) \8\ of the Act, 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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    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule changes will provide 
greater harmonization between NYSE Incorporated Rules and NASD Rules of 
similar purpose, resulting in less burdensome and more efficient 
regulatory compliance for their members. Where proposed amendments do 
not entirely conform to existing NYSE Incorporated or NASD Rules or 
address a provision without a direct counterpart, the Exchange believes 
the standards the proposed amendments establish further the objectives 
of the Exchange Act by providing greater regulatory clarity and 
relieving unnecessary regulatory burdens in the interim period until a 
Consolidated Rulebook is completed.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\ 
Because the

[[Page 54446]]

proposed rule change does not: (i) Significantly affect the protection 
of investors or the public interest; (ii) impose any significant burden 
on competition; and (iii) become operative prior to 30 days from the 
date on which it was filed, or such shorter time as the Commission may 
designate, if consistent with the protection of investors and the 
public interest, the proposed rule change has become effective pursuant 
to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6)(iii) 
thereunder.\11\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires the Exchange to give the Commission written 
notice of the Exchange's intent to file the proposed rule change 
along with a brief description and text of the proposed rule change, 
at least five business days prior to the date of filing of the 
proposed rule change, or such shorter time as designated by the 
Commission. The Exchange has satisfied the pre-filing requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii), \13\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has 
requested that the Commission waive the 30-day operative delay so that 
the proposed rule change may become operative pursuant to Section 
19(b)(3)(A) and Rule 19b-4(f)(6) at the same time that FINRA's proposed 
amendments become operative.
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    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
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    The purpose of the proposed rule change is to conform NYSE Rules to 
FINRA's proposed amendments to certain NYSE Incorporated Rules, in 
furtherance of the consolidation of the member firm regulations 
functions of NYSE Regulation and FINRA. NYSE requests that the 
operative date of the proposed rule change be the same as the operative 
date of FINRA's proposal in order to ensure that the NYSE Rules 
maintain their status as Common Rules under the 17d-2 Agreement. As 
provided in paragraph 2(b) of the Agreement, FINRA and NYSE will, 
absent a disagreement about the substance of a proposed rule change to 
one of the Common Rules, promptly propose conforming changes to ensure 
that such rules continue to be Common Rules under the Agreement. For 
this reason, the Commission designates that the proposed rule change 
has become operative as of September 12, 2008.\14\
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    \14\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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.\15\
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    \15\ 15 U.S.C. 78s(b)(3)(C). For purposes of calculating the 60-
day period within which the Commission may summarily abrogate the 
proposal, the Commission considers the period to commence on 
September 11, 2008, the date on which the Exchange submitted 
Amendment No. 1.
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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-2008-80 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2008-80. 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-2008-80 and should be 
submitted on or before October 10, 2008.

    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,
Acting Secretary.
[FR Doc. E8-21948 Filed 9-18-08; 8:45 am]

BILLING CODE 8010-01-P