Document ID: SEC-2008-1082-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2008-08-07T04:00Z

[Federal Register: August 7, 2008 (Volume 73, Number 153)]
[Notices]               
[Page 46114-46116]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07au08-117]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58269; File No. SR-NYSE-2008-65]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Amendments to the Portfolio Margin Program

July 30, 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 July 29, 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, 
II, and III below, which Items have been substantially prepared by the 
self-regulatory organization. The Commission is publishing this notice 
to

[[Page 46115]]

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 amend NYSE Rule 431 (``Margin 
Requirements'') to codify interpretations of the portfolio margin 
program set forth in NYSE Rule 431(g) regarding (1) monitoring 
concentrated equity positions and (2) timing of day trading margin 
calls.

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
    On July 30, 2007, NASD and NYSE Regulation, Inc. (``NYSE 
Regulation'') consolidated their member firm regulation operations into 
a combined organization, FINRA.\4\ Pursuant to FINRA's new regulatory 
responsibilities, FINRA amended its version of NYSE Rule 431 to codify 
the portfolio margin program \5\ set forth in NYSE Rule 431(g) 
regarding (1) monitoring concentrated equity positions and (2) timing 
of day trading margin calls. The NYSE is proposing to amend NYSE Rule 
431 to conform to the recently filed change to FINRA's incorporated 
version of NYSE Rule 431.
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    \4\ Pursuant to Rule 17d-2 under the Securities Exchange Act of 
1934 (the ``Act''), NYSE, NYSE Regulation, 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 rules (``Common Rules'') for which 
FINRA has assumed regulatory responsibilities. See 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 
are the same NYSE rules that FINRA has incorporated into its 
rulebook. See Exchange Act Release No. 56417 (July 26, 2007), 72 FR 
42166 (August 1, 2007) (SR-NASD-2007-054) (Notice of Filing and 
Order Granting Accelerated Approval of Proposed Rule Change to 
Incorporate Certain NYSE Rules Relating to Member Firm Conduct). 
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.
    \5\ See SR-FINRA-2008-042, filed July 25, 2008.
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    The implementation date of the proposed rule change is August 1, 
2008, which is the implementation date of FINRA's identical amendments 
to its version of NYSE Rule 431.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
and furthers the objectives of Section 6(b)(5) of the Act,\6\ 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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    \6\ 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

    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 \7\ and Rule 19b-4(f)(6) thereunder.\8\ 
Because the 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.\9\
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 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 requested, and the Commission has 
agreed, to waive this pre-filing requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange believes the 
waiver of this period will allow it to immediately conform NYSE Rule 
431 to FINRA's proposed amendments to its version of NYSE Rule 431, in 
furtherance of the consolidation of the member firm regulation 
functions of NYSE Regulation and NASD. 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. The Commission believes that 
waiving the 30-day operative delay is consistent with the protection of 
investors and the public interest because such waiver will allow the 
amendments to the portfolio margining rules to coincide with FINRA's 
amendments to the rules.\12\ Accordingly, the Commission designates the 
proposed rule change effective upon filing with the Commission.
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ 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.

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.

[[Page 46116]]

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-2008-65 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2008-65. 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 Section, 100 F Street, 
NE., Washington, DC 20549-1090 on official business days between the 
hours of 10 a.m. and 3 p.m. Copies of the filing will also be available 
for inspection and copying at the NYSE's 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-2008-65 and should be submitted on 
or before August 28, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-18071 Filed 8-6-08; 8:45 am]

BILLING CODE 8010-01-P