Document ID: SEC-2009-0723-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NYSE Alternext US LLC; Notice of Filing of Amendment No. 2 and Order Granting Accelerated Approval to a Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, Changing Certain NYSE Amex Equities Rules To Conform Them With Changes to Corresponding Rules Filed by the New York Stock Exchange LLC
Posted Date: 2009-06-02T04:00Z

[Federal Register: June 2, 2009 (Volume 74, Number 104)]
[Notices]               
[Page 26449-26451]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02jn09-115]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59975; File No. SR-NYSEALTR-2009-26]

 
Self-Regulatory Organizations; NYSE Alternext US LLC; Notice of 
Filing of Amendment No. 2 and Order Granting Accelerated Approval to a 
Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, Changing 
Certain NYSE Amex Equities Rules To Conform Them With Changes to 
Corresponding Rules Filed by the New York Stock Exchange LLC

May 26, 2009.

I. Introduction

    On March 9, 2009, the NYSE Alternext LLC (n/k/a NYSE Amex LLC) 
(``NYSE Amex'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to make changes to certain NYSE 
Amex Equities rules, to be effective retroactively to December 15, 
2008, to conform them with changes to corresponding rules filed by the 
New York Stock Exchange LLC (``NYSE'') on March 9, 2009,\3\ and 
approved by the Commission on May 21, 2009.\4\ NYSE had proposed the 
rule changes described in the NYSE Notice to harmonize NYSE rules with 
corresponding rules that were filed by the Financial Industry 
Regulatory Authority, Inc. (``FINRA''), and approved by the Commission 
or were effective upon filing with the Commission.\5\ On March 27, 
2009, the Exchange filed Amendment No. 1 to the proposed rule 
change.\6\ The proposed rule change was published in the Federal 
Register on April 6, 2009.\7\ The Commission received no comments on 
the proposal. On May 11, 2009, the Exchange filed Amendment No. 2 to 
the proposed rule change.\8\ This order provides notice of the proposed 
rule change, as modified by Amendment No. 2, and approves the proposed 
rule change, as amended, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 59655 (March 30, 
2009), 74 FR 15563 (``NYSE Notice'').
    \4\ See Securities Exchange Act Release No. 59965 (May 21, 2009) 
(``NYSE Order'').
    \5\ See Securities Exchange Act Release No. 58461 (September 4, 
2008), 73 FR 52710 (September 10, 2008) (SR-FINRA-2008-033); 
Securities Exchange Act Release No. 58514 (September 11, 2008), 73 
FR 54190 (September 18, 2008) (SR-FINRA-2008-039); Securities 
Exchange Act Release No. 58643 (September 25, 2008), 73 FR 57174 
(October 1, 2008) (SR-FINRA-2008-021, -022, -026, -028, -029); 
Securities Exchange Act Release No. 58660 (September 26, 2008), 73 
FR 57393 (October 2, 2008) (SR-FINRA-2008-027); Securities Exchange 
Act Release No. 58661 (September 26, 2008), 73 FR 57395 (October 2, 
2008) (SR-FINRA-2008-030); and Securities Exchange Act Release No. 
59097 (December 12, 2008), 73 FR 78412 (December 22, 2008) (SR-
FINRA-2008-057).
    \6\ Amendment No. 1 to SR-NYSEALTR-2009-26 superseded and 
replaced the original filing in its entirety.
    \7\ See Securities Exchange Act Release No. 59656 (March 30, 
2009), 74 FR 15540 (``Notice'').
    \8\ Amendment No. 2 to SR-NYSEALTR-2009-26 clarified certain 
points set forth in the purpose section of Amendment No. 1 to SR-
NYSEALTR-2009-026 relating to certain NYSE Amex Equities rules.
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II. Description of the Proposal

    NYSE Euronext acquired The Amex Membership Corporation (``AMC'') 
pursuant to an Agreement and Plan of Merger, dated January 17, 2008 
(``Merger'').\9\ In connection with the Merger, the Exchange's 
predecessor, the American Stock Exchange LLC (``Amex''), a subsidiary 
of AMC, became a subsidiary of NYSE Euronext called NYSE Amex US LLC, 
and continues to operate as a national securities exchange registered 
under Section 6 of the Act.\10\

[[Page 26450]]

The effective date of the Merger was October 1, 2008.
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    \9\ See Securities Exchange Act Release No. 58673 (September 29, 
2008), 73 FR 57707 (October 3, 2008) (SR-NYSE-2008-60 and SR-Amex-
2008-62) (approving the Merger).
    \10\ 15 U.S.C. 78f.
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    In connection with the Merger, on December 1, 2008, the Exchange 
relocated all equities trading conducted on the Exchange legacy trading 
systems and facilities located at 86 Trinity Place, New York, New York, 
to trading systems and facilities located at 11 Wall Street, New York, 
New York (``Equities Relocation''). The Exchange's equity trading 
systems and facilities at 11 Wall Street (``NYSE Amex Trading 
Systems'') are operated by the NYSE on behalf of the Exchange.\11\
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    \11\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex-2008-63) (approving 
the Equities Relocation).
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    As part of the Equities Relocation, NYSE Amex adopted NYSE Rules 1-
1004, subject to such changes as necessary to apply those rules to the 
Exchange as the NYSE Amex Equities Rules to govern trading on the NYSE 
Amex Trading Systems.\12\ The NYSE Amex Equities Rules, which became 
operative on December 1, 2008, are substantially identical to the 
current NYSE Rules 1-1004 and the Exchange continues to update the NYSE 
Amex Equities Rules as necessary to conform them with rule changes to 
corresponding NYSE Rules filed by the NYSE.
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    \12\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex-2008-63) (approving 
the Equities Relocation); Securities Exchange Act Release No. 58833 
(October 22, 2008), 73 FR 64642 (October 30, 2008) (SR-NYSE-2008-
106) and Securities Exchange Act Release No. 58839 (October 23, 
2008), 73 FR 64645 (October 30, 2008) (SR-NYSEALTR-2008-03) 
(together, approving the Bonds Relocation); Securities Exchange Act 
Release No. 59022 (November 26, 2008), 73 FR 73683 (December 3, 
2008) (SR-NYSEALTR-2008-10) (adopting amendments to NYSE Amex 
Equities Rules to track changes to corresponding NYSE Rules); 
Securities Exchange Act Release No. 59027 (November 28, 2008), 73 FR 
73681 (December 3, 2008) (SR-NYSEALTR-2008-11) (adopting amendments 
to Rule 62--NYSE Amex Equities to track changes to corresponding 
NYSE Rule 62).
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    As noted above, the Exchange proposes to change certain NYSE Amex 
Equities Rules to conform them with changes to corresponding NYSE Rules 
that were described in the NYSE Notice.\13\ On July 30, 2007, the 
National Association of Securities Dealers, Inc. (``NASD''), and NYSE 
Regulation, Inc., the regulatory subsidiary of the NYSE, consolidated 
their member firm regulation operations into FINRA. In connection with 
that consolidation, FINRA is in the process of establishing a 
consolidated FINRA rulebook (``Consolidated FINRA Rulebook'') \14\ that 
will harmonize NASD rules and certain NYSE rules related to member firm 
regulation.\15\ All of these rules will be identified as ``FINRA 
Rules'' when the rule consolidation process is completed.
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    \13\ See NYSE Notice, supra note 3.
    \14\ The current FINRA rulebook consists of three sets of rules: 
(1) NASD Rules, (2) rules and rule interpretations incorporated from 
the NYSE (``FINRA Incorporated NYSE Rules'') (together, referred to 
as the ``Transitional Rulebook''), 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.
    \15\ Pursuant to Rule 17d-2 under the Act, NYSE, NYSER and NASD 
entered into an agreement (the ``Rule 17d-2 Agreement'') to reduce 
regulatory duplication for Dual Members by allocating to FINRA 
regulatory responsibility for specified NYSE rules (the ``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 the FINRA 
Incorporated NYSE 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) (SR-NASD-2007-054). Paragraph 2(b) of the Rule 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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    To reduce regulatory duplication, the Exchange proposes to conform 
several NYSE Amex Equities rules with changes to corresponding rules 
that were filed by the NYSE \16\ and recently approved by the 
Commission.\17\ The Notice provides a more detailed description of the 
Exchange's proposed rule changes.\18\
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    \16\ See NYSE Notice, supra note 3.
    \17\ See NYSE Order, supra note 4.
    \18\ See Notice, supra note 7.
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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 Number SR-NYSEALTR-2009-026 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-NYSEALTR-2009-26. 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 available publicly. All 
submissions should refer to File Number SR-NYSEALTR-2009-26 and should 
be submitted on or before June 23, 2009.

IV. Discussion and Commission's Findings

    The Commission has carefully reviewed the proposed rule change, as 
amended, and finds that it is consistent with the requirements of 
Section 6 of the Act \19\ and the rules and regulations thereunder 
applicable to a national securities exchange.\20\ In particular, the 
Commission finds that the proposed rule change, as amended, is 
consistent with Section 6(b)(5) of the Act,\21\ which requires, among 
other things, that the Exchange's rules be 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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    \19\ 15 U.S.C. 78f.
    \20\ In approving this proposed rule change, as amended, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \21\ 15 U.S.C. 78f(b)(5).
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    NYSE Amex is deleting certain rules pertaining to: (1) Compensation 
or gratuities to employees of others; (2) business conduct, trading 
against firm

[[Page 26451]]

recommendations, and private sales; (3) excessive trading by members, 
excessive trading in discretionary accounts, successive transactions by 
members, manipulative operations, reopening contracts, and loans for 
accounts of non-members; (4) disciplinary proceedings concerning 
conduct that is inconsistent with just and equitable principles of 
trade; (5) reporting of certain information concerning short sales and 
proprietary transactions; (6) reporting and certification of member or 
member organization's supervision and compliance efforts; (7) formation 
and approval or merger organizations; (8) reporting of short positions; 
(9) notification requirements for listed securities; and (10) 
disclosure and monitoring of non-managed fee based accounts. In place 
of the deleted rules and interpretations, NYSE Amex proposes to adopt 
rules that conform the NYSE Amex Equities Rules with changes made to 
the corresponding NYSE Rules on which they are based.\22\
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    \22\ See NYSE Order, supra note 4.
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    The Commission believes that the proposed rule change, as amended, 
is appropriate and would provide greater harmonization among NYSE 
Rules, NYSE Amex Equities Rules and FINRA Rules, thereby resulting in 
less burdensome and more efficient regulatory compliance for their 
common members and member organizations. With respect to the Exchange's 
proposal to delete NYSE Amex Equities Rule 350 and to adopt NYSE Amex 
Equities Rule 3220, (relating to influencing or rewarding employees of 
others), the Commission notes that NYSE Amex has stated that, 
immediately upon Commission approval of new NYSE Amex Equities Rule 
3220, it will issue an Information Memorandum to its members and member 
organizations including NYSE Amex-only members and those members 
registered with FINRA, clarifying that FINRA's interpretive guidance 
related to FINRA Rule 3220 is considered part of NYSE Amex Equities 
Rule 3220, and that such members and member organizations are required 
to regulate their conduct according to Rule 3220 and the interpretive 
guidance related to FINRA Rule 3220.\23\ Accordingly, the Commission 
believes that the proposed rule change, as amended, is consistent with 
the requirements of the Act.
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    \23\ Telephone conversation between Clare F. Saperstein, 
Managing Director, NYSE Regulation, Inc., and Nancy J. Burke-Sanow, 
Assistant Director, Division of Trading and Markets, Commission, May 
21, 2009.
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    The Commission also finds good cause for approving the proposed 
rule change as modified by Amendment No. 2 prior to the thirtieth day 
after the date of publication of notice in the Federal Register. 
Amendment No. 2 simply clarifies certain points relating to proposed 
changes to NYSE Amex Equities Rules. Because Amendment No. 2 does not 
significantly alter the proposed rule change, which was subject to a 
full notice and comment period, the Commission finds that it is in the 
public interest to approve the proposed rule change, as modified by 
Amendment No. 2, without delay to expedite implementation. Accordingly, 
the Commission finds that there is good cause, consistent with and in 
furtherance of the objectives of Sections 6 \24\ and 19(b)(2) \25\ of 
the Exchange Act, to approve Amendment No. 2 on an accelerated basis.
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    \24\ 15 U.S.C. 78f.
    \25\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\26\ that the proposed rule change (SR-NYSEALTR-2009-26) be, and it 
hereby is, approved on an accelerated basis.
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    \26\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
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    \27\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-12714 Filed 6-1-09; 8:45 am]

BILLING CODE 8010-01-P