Document ID: SEC-2007-0129-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NYSE Arca, Inc.
Posted Date: 2007-01-26T05:00Z

[Federal Register: January 26, 2007 (Volume 72, Number 17)]
[Notices]               
[Page 3898-3900]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26ja07-162]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55142; File No. SR-NYSEArca-2006-54]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Order Granting Accelerated Approval of Proposed Rule Change as 
Modified by Amendments 1 and 2 Thereto Relating to Arbitration

January 19, 2007.
    Pursuant to Section 19(b)(4) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 5, 2006, the NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') the proposed rule as described in Items I, 
II and III below, which Items have been prepared by NYSE Arca. On 
December 21, 2006, NYSE Arca amended the proposed rule change 
(``Amendment 1'').\3\ NYSE Arca further amended the proposed rule 
change on January 5, 2007 (``Amendment 2'').\4\ The Commission is 
publishing this notice to solicit comments on the proposed rule change, 
as amended, from interested persons and to approve the proposal on an 
accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment 1 provided that the NYSE Arbitration Rules would 
apply to all arbitrations filed with NYSE Arca Equities, Inc. after 
December 31, 2006, as well as made minor stylistic changes to the 
proposed rule change.
    \4\ Amendment 2 provided that the NYSE Arbitration Rules would 
apply to all arbitrations filed with NYSE Arca Equities, Inc. after 
January 31, 2007.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes, through its subsidiary, NYSE Arca Equities, 
Inc. (``NYSE Arca Equities'' or ``Corporation''), to amend NYSE Arca 
Equities Rule 12 to permit the arbitration rules of New York Stock 
Exchange, L.L.C. (NYSE Arbitration Rules) to govern arbitrations filed 
with the Corporation. The text of the proposed rule change and all 
subsequent amendments are available on the Exchange's Web site (http://www.nysearca.com
), at the Exchange's principal office, and at the 

Commission's Public Reference Room.

[[Page 3899]]

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

    In its filing with the Commission, NYSE Arca included statements 
concerning the purpose of and basis for the proposed rule and discussed 
any comments it received on the proposed rule. The text of these 
statements may be examined at the places specified in Item IV below. 
NYSE Arca 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 purpose of this proposed rule change is to amend NYSE Arca 
Equities Rule 12 to permit all arbitrations filed with NYSE Arca 
Equities after January 31, 2007, other than those arbitrations proposed 
to be specifically excepted in the rule, to be governed by the NYSE 
Arbitration Rules. In general, Rule 12, as proposed to be amended, 
would provide that any dispute, claim or controversy arising out of or 
in connection with the business of any Equity Permit Holder (``ETP 
Holder'') or arising out of the employment or termination of employment 
of associated person(s) with any ETP Holder may be arbitrated under 
Rule 12 as proposed to be amended. The rule, however, would except: (1) 
A dispute, claim, or controversy alleging employment discrimination 
(including a sexual harassment claim) in violation of a statute unless 
the parties have agreed to arbitrate it after the dispute arose; and 
(2) any type of dispute, claim, or controversy that is not permitted to 
be arbitrated under the NYSE Arbitration Rules, such as class action 
claims.
    In addition, the requirements of the NYSE Arbitration Rules 
referenced in proposed Rule 12 would apply to predispute arbitration 
agreements between NYSE Arca Equities ETP Holders and/or associated 
persons and their customers. Proposed Rule 12 would also provide that 
if any matter comes to the attention of an arbitrator during and in 
connection with the arbitrator's participation in a proceeding, either 
from the record of the proceeding or from material or communications 
related to the proceeding, that the arbitrator has reason to believe 
may constitute a violation of the Corporation's rules or the federal 
securities law, the arbitrator may refer the matter to NYSE Regulation, 
Inc. for disciplinary investigation. Proposed Rule 12 would also 
provide that any ETP Holder or associated person who fails to honor an 
award of arbitrators appointed in accordance with proposed Rule 12 will 
be subject to disciplinary proceedings in accordance with NYSE Arca 
Equities Rule 10.
    Finally, proposed Rule 12 would provide that the submission of any 
matter to arbitration would in no way limit or preclude any right, 
action or determination by the Corporation that it would otherwise be 
authorized to adopt, administer or enforce.
2. Statutory Basis
    The Exchange states that the proposed change is consistent with 
Section 6(b)(5) of the Act \5\ in that it promotes just and equitable 
principles of trade by ensuring that members and member organizations 
and the public have a fair and impartial forum for the resolution of 
their disputes.
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    \5\ 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

    Written comments on the proposed rule change were neither solicited 
nor received.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, 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 No. SR-NYSEArca-2006-54 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 No. SR-NYSEArca-2006-54. 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 20549-1090. Copies of such filing also will be available 
for inspection and copying at the principal offices of NYSE Arca. 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 No. SR-NYSEArca-2006-54 and should be 
submitted on or before February 16, 2007.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder, applicable to a national securities exchange.\6\ In 
particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act \7\ in that it promotes just 
and equitable principles of trade by ensuring that members and member 
organizations and the public have a fair and impartial forum for the 
resolution of their disputes.
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    \6\ In approving this proposal, the Commission has considered 
its impact on efficiency, competition, and capital formation. 15 
U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Commission also believes that the proposed rule change raises 
no issues that have not been previously considered by the Commission. 
The proposed rule change will merely amend NYSE Arca Equities Rule 12 
to permit the NYSE Arbitration Rules to govern the NYSE Arca Equities' 
arbitrations, except as specified in

[[Page 3900]]

amended Rule 12. The NYSE Arbitration Rules have previously been 
approved by the Commission.\8\
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    \8\ See 600 Series of the NYSE Rules.
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    After careful consideration, the Commission finds good cause, 
pursuant to Section 19(b)(2) of the Act,\9\ for approving the proposed 
rule change prior to the thirtieth day after the date of publication of 
notice in the Federal Register. Granting accelerated approval will help 
to expedite the integration of NYSE and NYSE Arca and remove 
uncertainty that could arise through the application of multiple sets 
of rules governing arbitrations with the NYSE forum. Accordingly, the 
Commission believes that there is good cause, consistent with Section 
6(b)(5) of the Act,\10\ to approve the proposal on an accelerated 
basis.
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    \9\ 15 U.S.C. 78s(b)(2).
    \10\ 15 U.S.C. 78f(b)(5).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-NYSEArca-2006-54), as 
amended by Amendments 1 and 2, is hereby approved on an accelerated 
basis.
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    \11\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
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. E7-1186 Filed 1-25-07; 8:45 am]

BILLING CODE 8011-01-P