Document ID: SEC-2010-0805-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC
Posted Date: 2010-06-03T04:00Z

[Federal Register: June 3, 2010 (Volume 75, Number 106)]
[Notices]               
[Page 31494-31496]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03jn10-101]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62169; File No. SR-NYSEAmex-2010-43]

 
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Make Certain 
Reporting Requirements Punishable Under its MRVP

May 25, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on May 7, 2010, NYSE Amex LLC (``NYSE Amex'' 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 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

    The Exchange proposes to amend NYSE Amex Disciplinary Rule 476A 
(Imposition of Fines for Minor Violation(s) of Rules) to add a new Part 
1D: List of Reports Required to be Filed with the Exchange by ATP 
Holders and Filing Deadlines. The Exchange also proposes to add 
violations of NYSE Amex Rule 340.01 to Part 1C of Disciplinary Rule 
476A, and to make other technical changes to the Rule. The text of the 
proposed rule change is available on NYSE Amex's Web site at http://
www.nyse.com, on the Commission's Web site at http://www.sec.gov, at 
NYSE Amex, and at the Commission's Public Reference Room.

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
    The Exchange proposes to amend NYSE Amex Disciplinary Rule 476A 
(Imposition of Fines for Minor Violation(s) of Rules) to add a new Part 
1D: List of Reports Required to be filed with the Exchange by ATP 
Holders and Filing Deadlines. The Exchange also proposes to add 
violations of NYSE Amex Rule 340.01 to Part 1C of Disciplinary Rule 
476A, and to make other technical changes to the Rule.
Background
    As described more fully in a related rule filing, effective October 
1, 2008, NYSE Euronext acquired The Amex Membership Corporation 
(``AMC'') pursuant to an Agreement and Plan of Merger, dated January 
17, 2008 (the ``Merger''). Pursuant to the Merger the Exchange's 
predecessor, the American Stock Exchange LLC, a subsidiary of AMC, 
became a subsidiary of NYSE Euronext.\3\
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    \3\ 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).
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    In connection with the Merger, on December 1, 2008, the Exchange 
relocated all equities trading conducted on the Exchange's legacy 
trading systems and facilities located at 86 Trinity Place, New York, 
New York, to new trading systems and facilities located at 11 Wall 
Street, New York, New York (known as ``NYSE Amex Equities'').\4\ 
Similarly, on March 2, 2009, the Exchange relocated all options trading 
conducted on the Exchange's legacy trading systems and facilities to 
new trading systems and facilities located at 11 Wall Street (known as 
``NYSE Amex Options'').\5\
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    \4\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex-2008-63) (approving 
the adoption of the ``NYSE Amex Equities'' rules).
    \5\ See Securities Exchange Act Release No. 59472 (February 27, 
2009), 74 FR 9843 (March 6, 2009) (SR-NYSEALTR-2008-14) (approving 
the adoption of the ``NYSE Amex Options'' rules).
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    As part of this process, the Exchange adopted NYSE Rules 475-477, 
including Rule 476A, subject to such changes as necessary to apply the 
Rules to the Exchange, as NYSE Amex Disciplinary Rules 475-477 to 
govern transactions and the conduct of its members and member 
organizations on both NYSE Amex Equities and NYSE Amex Options.\6\
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    \6\ See Securities Exchange Act Release Nos. 58673 (September 
29, 2008), 73 FR 57707 (October 3, 2008) (adopting NYSE Amex 
Disciplinary Rules 475-477); 58705 (October 1, 2008), 73 FR 58995 
(October 8, 2008) (adopting NYSE Amex Disciplinary Rule 476A).
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Current NYSE Amex Disciplinary Rule 476A
    NYSE Amex Disciplinary Rule 476A, the Exchange's Minor Rule 
Violation Plan (``MRVP''), governs transactions and conduct on both 
NYSE Amex Equities and NYSE Amex Options.
    Under NYSE Amex Disciplinary Rule 476A, the Exchange may impose a 
summary fine on any member, member organization, allied member, 
approved person or registered or non-registered employee of a member or 
member organization for a minor violation of specified Exchange rules: 
Supplementary Part 1A to the Rule contains a list of NYSE Amex Equities 
Rules subject to summary fine; Part 1B contains a list of legacy 
Exchange rules; and Part 1C contains a list of NYSE Amex Options Rules. 
The fines permitted under the MRVP provide an appropriate sanction 
when, given the facts and circumstances of a particular rule violation, 
a response stronger than a simple admonition letter is needed but the 
initiation of a formal disciplinary proceeding under Disciplinary Rule 
476 is unwarranted.
    Violations of the listed rules are subject to the fine schedules in 
NYSE Amex Disciplinary Rule 476A. For violations of the rules listed in 
Parts 1A and 1B, individuals may be charged $500.00 for a first 
offense, $1,000.00 for a second offense and $2,500.00 for subsequent 
offenses; member firms may be charged $1,000.00 for a first offense, 
$2,500.00 for a second offense and $5,000.00 for subsequent offenses. 
Violations of the rules listed in Part 1C are subject to varying fines 
as specified, depending on the rule violated.

[[Page 31495]]

Proposed Changes to NYSE Amex Disciplinary Rule 476A
a. Adoption of Part 1D: List of Reports Required To Be Filed With the 
Exchange by ATP Holders and Filing Deadlines
    The Exchange proposes to add Part 1D to NYSE Amex Disciplinary Rule 
476A to provide a list of financial reports required to be filed with 
the Exchange by NYSE Amex Options members and member organizations 
(also known as ``ATP Holders'') and corresponding filing deadlines, 
subject to a different fine schedule than for Parts 1A, 1B and 1C. The 
list of reports includes equity and net capital computations, FOCUS 
reports, ITSFEA forms and annual audited statements, all of which are 
already required to be filed under existing Exchange rules and Federal 
securities laws and regulations. Under proposed Part 1D, ATP Holders 
that fail to file any of the listed reports on the date they are due 
will be subject to a summary fine of $100 per day for each day such a 
report is not timely filed, for a period not to exceed 10 business 
days. Violations of the provisions of Part 1D will be subject to the 
procedures of the Exchange's MRVP under Disciplinary Rule 476A.
    Proposed Part 1D is based, inter alia, on Part 3 of legacy NYSE 
Amex Rule 590, which similarly provided that members and member 
organizations that failed to timely file certain listed financial 
reports with the American Stock Exchange were subject to a fine of $50 
per day.\7\ Part 1D also draws on the Financial Industry Regulatory 
Authority, Inc.'s (``FINRA'') By-Laws, which impose a fee of $100 per 
day on any member that fails to file similar reports in a timely 
manner, not to exceed 10 business days.\8\
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    \7\ See NYSE Amex Rule 590, Part 3. Although the current NYSE 
Amex Disciplinary Rules govern transactions and/or conduct by 
Exchange members and member organizations on the trading systems and 
facilities located at 11 Wall Street, legacy NYSE Amex Rule 590 is 
still listed on the Exchange's Web site for the purposes of 
regulating transactions and/or conduct that occurred on or through 
the Exchange's legacy systems or facilities located at 86 Trinity 
Place prior to March 2, 2009. See Securities Exchange Act Release 
No. 58705 (October 1, 2008), 73 FR 58995 (October 8, 2008).
    \8\ See FINRA By-Laws, Schedule A, Section 4(g).
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    The Exchange further proposes to implement proposed Part 1D on May 
24, 2010, in order to give ATP Holders sufficient notice of the new 
fine schedule for late reporting. Because it is still listed on the 
Exchange's Web site, the Exchange also proposes to add language to 
legacy NYSE Amex Rule 590 that clarifies that its provisions apply only 
to transactions and/or conduct that occurred on or through the 
Exchange's legacy systems or facilities located at 86 Trinity Place.
b. Addition of NYSE Amex Rule 340.01 to Part 1C
    The Exchange also proposes to add NYSE Amex Rule 340.01 
(Disapproval of Employees) to Part 1C of Disciplinary Rule 476A and the 
list of NYSE Amex Options Rules subject to the Exchange's MRVP.
    NYSE Amex Rule 340.01 provides that any and all employees of an ATP 
Holder that are to be admitted to the Trading Floor must be registered 
and approved by the Exchange through the submission of a Form U-4. In 
addition, any such employees must submit fingerprints to the Exchange 
or its designee for identification and appropriate processing. Rule 
340.01 further provides that ATP Holders must file a Form U-5 within 10 
days of the date of termination of an employee that has been admitted 
by the Exchange to the Trading Floor.
    The Exchange believes that the current regulatory approach for 
dealing with these reporting requirements is too inflexible. The 
Exchange recognizes that ATP Holders may, for many reasons, fail to 
timely submit a Form U-4 or U-5 pursuant to NYSE Amex Rule 340.01. In 
some such circumstances, formal disciplinary proceedings in accordance 
with Disciplinary Rule 476 are warranted. However, in other instances 
such a proceeding may be unwarranted, and the Exchange believes that 
the addition of Rule 340.01 to the list of rule violations and fines 
under Part 1C of Disciplinary Rule 476A will provide a more flexible 
and appropriate mechanism for enforcing the reporting requirements of 
Rule 340.01, while preserving the Exchange's discretion to seek formal 
discipline when appropriate.
    The Exchange further proposes related technical changes to Parts 1B 
and 1C in order to accommodate these proposed changes.
c. Technical Changes to Part 1A
    The Exchange proposes to make technical changes to Parts 1A, 1B and 
1C of NYSE Amex Disciplinary Rule 476A to clarify the effective date 
and the trading and conduct covered by each of these provisions.
2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with, and further the objectives of, Section 6(b)(5) of the Act,\9\ in 
that they are 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. The proposed rule changes also further the 
objectives of Sections 6(b)(1) and 6(b)(6) of the Act,\10\ in that they 
enforce compliance with, and provide for appropriate discipline for, 
violations of the Act, the rules and regulations thereunder, and 
Exchange rules and regulations.
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    \9\ 15 U.S.C. 78f(b)(5).
    \10\ 15 U.S.C. 78f(b)(1) and (6).
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    In addition, because the Exchange's MRVP provides procedural rights 
to a member or member organization fined thereunder to contest the fine 
and permits disciplinary proceedings on the matter, the Exchange 
believes that its MRVP provides a fair procedure for disciplining 
members, member organizations, and persons associated therewith 
consistent with Sections 6(b)(7) and 6(d)(1) of the Act.\11\
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    \11\ 15 U.S.C. 78f(b)(7) and (d)(1).
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    The Exchange believes that the proposed rule changes will provide 
the Exchange with greater regulatory flexibility to enforce the 
reporting requirements set forth in NYSE Amex Rule 340.01 and Part 1D 
of NYSE Amex Disciplinary Rule 476A, consistent with the purposes of 
the Act.

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

    Because the foregoing proposed rule change: (i) Does not 
significantly affect the protection of investors or the public 
interest; (ii) does not impose any significant burden on competition; 
and (iii) by its terms, does not become operative for 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, it has

[[Page 31496]]

become effective pursuant to Section 19(b)(3)(A) of the Act \12\ and 
Rule 19b-4(f)(6) thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the self-regulatory organization to submit to the 
Commission written notice of its 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 this requirement.
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    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Commission believes that waiving the 30-day operative delay 
is consistent with the protection of investors and the public interest, 
because the proposal raises no novel issues and is consistent with 
prior approved rules on which it is based.\14\ Therefore, the 
Commission designates the proposal operative upon filing.\15\
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    \14\ See e.g., Securities Exchange Act Release No. 44512 (July 
3, 2001), 66 FR 36812 (July 13, 2001) (SR-NASD-00-39).
    \15\ 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. 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-NYSEAmex-2010-43 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-NYSEAmex-2010-43. 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 Web site 
viewing and printing 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-
NYSEAmex-2010-43 and should be submitted on or before June 24, 2010.

    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) and 200.30-3(a)(44).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-13340 Filed 6-2-10; 8:45 am]
BILLING CODE 8010-01-P