Document ID: SEC-2008-0874-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2008-07-01T04:00Z

[Federal Register: July 1, 2008 (Volume 73, Number 127)]
[Notices]               
[Page 37521-37523]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01jy08-84]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58013; File No. SR-NYSE-2008-48]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending NYSE Rule 103A To Exempt Executive Floor Governors From Floor 
Member Continuing Education

June 24, 2008.
    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 June 19, 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 substantially prepared by the Exchange. 
The Exchange filed the proposal as a ``non-controversial'' proposed 
rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 
19b-4(f)(6) thereunder,\4\ which rendered the proposal effective upon 
filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to amend NYSE Rule 103A(a)(3) (Specialist 
Stock Reallocation and Member Education and Performance) to exempt 
Executive Floor Governors (``EFGs'') of the Exchange from Floor Member 
Continuing Education (``FMCE'') requirements. The Exchange further 
proposes, in connection with specific FMCE modules, to deem members who 
substantially assisted NYSE Regulation, Inc. (``NYSE Regulation'') 
staff in the development of such modules as having fulfilled their 
obligation to complete required training on that module. The

[[Page 37522]]

text of the proposed rule change is available at http://www.nyse.com, 
the Exchange, and 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 Exchange 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 is submitting this proposed amendment to NYSE Rule 
103A(a)(3) to permit the Exchange to exempt EFGs from the Exchange's 
mandatory FMCE program and to deem certain other members who have 
substantially assisted NYSE Regulation in developing a training module 
to have fulfilled their obligation to complete training on that module.
    NYSE Rule 103A(a)(3) requires that the Exchange, via NYSE 
Regulation, provide mandatory continuing education for all Floor 
members and permits the Exchange to deny non-complying members access 
to the Trading Floor until they complete their required education.
    On March 18, 2008, NYSE Regulation, which supervises the creation 
and delivery of content for the Exchange's FMCE program, launched the 
Learning Management System (``LMS''), which automates the delivery of 
program content to members via a Web-based interactive program that 
participants can access from an internet-capable computer. The Exchange 
filed certain amendments to Rule 103A to update the Rule in light of 
the new system requirements.\5\
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    \5\ See Securities Exchange Act Release No. 56851 (November 28, 
2007), 72 FR 68932 (December 6, 2007) (SR-NYSE-2007-106).
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    This proposed rule change seeks limited relief from the technical 
program requirements for two groups of members: (i) EFGs; and (ii) 
members who provide substantial assistance to NYSE Regulation staff in 
the development of specific training modules.
    EFGs are experienced and knowledgeable Exchange members who 
volunteer substantial amounts of time providing consultative and 
interpretive advice with respect to many NYSE rules. Among other 
things, EFGs:
     Take an active role in supervising unusual trading 
situations pursuant to NYSE Rules 46 and 47, which requires them to 
know and keep abreast of changes to NYSE rules and policies;
     Are frequently called on by NYSE rule development staff to 
provide feedback from the perspective of a knowledgeable practitioner 
with respect to proposed rules changes;
     Are regularly consulted with respect to trading situations 
on the Floor and provide trading dispute rulings in conjunction with 
NYSE Market, Inc. and NYSE Regulation staff; and
     Participate in regular meetings with NYSE Regulation 
senior staff to discuss various issues regarding trading on the 
Exchange and other Floor-related issues.
    In addition to the foregoing, NYSE Regulation also consults with 
the EFGs on FMCE content, including previewing LMS modules to some or 
all of the EFGs during the development phase.
    In view of their participation in the development of policies that 
are then taught to all members through the FMCE program, and in view of 
their contact with the FMCE program during its development, the 
Exchange believes it is appropriate to exempt EFGs from sitting through 
the completed FMCE program modules; the EFGs clearly have provided 
valuable assistance by the time the modules are rolled out to the 
general membership. Accordingly, NYSE Regulation seeks a limited 
exemption for EFGs from FMCE requirements.
    Additionally, in conjunction with creating educational materials 
for the FMCE program, NYSE Regulation staff from time to time may 
consult at length with experienced Floor members, including but not 
limited to Floor Officials (who act in such capacity by volunteering 
their time), in the development of content (e.g., slide shows and 
scripts). The purpose of such consultations is to ensure that the 
educational materials are both practical and effective as educational 
tools. Floor member contributions include, but are not limited to, 
ensuring that market examples used to drive home teaching points are 
realistic, that descriptions of how members interact with trading 
systems are feasible, that trading examples used to demonstrate 
applicable rules are useful, and that descriptions of trading 
activities are phrased in language that is familiar to qualified Floor 
members. Such member participation may include attending applicable 
meetings, drafting and reviewing documents, providing input on visuals 
and narration used for the module, and conducting research. Where such 
members have made a substantial contribution to the development of an 
educational module, the Exchange seeks authority to deem such members 
as having fulfilled their obligation to complete only that particular 
module on which they were consulted, in recognition of the fact that 
they have partnered with staff to create the final product and, in 
doing so, have become educated on the related regulatory aspects. These 
members would still be obligated to complete modules on which they were 
not consulted, just like any other member.
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. The Exchange believes this proposed rule change will 
serve all of these goals by providing for a more reasonable and robust 
program for developing educational materials for Floor members that are 
accurate in accordance with applicable rules and policies and couched 
in terms that are better understood by trading practitioners. Offering 
the exemptions proposed in this filing will encourage participation by 
experienced Floor members in the development of the program.
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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.

[[Page 37523]]

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 satisfied the 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 
requested that the Commission waive the 30-day operative delay.
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
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    In support of its request, the Exchange has represented that 
certain EFGs are overdue or have pending due dates for completion of 
their FMCE requirements. The Exchange has stated that it would prefer 
to grant the waivers proposed in this filing to the EFGs, rather than 
continuing to apply a deadline extension for these individuals.\12\
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    \12\ The Exchange further noted that the proposed rule change 
also seeks limited relief from technical program requirements for a 
very small number of members in recognition of important 
contributions to the development of educational materials that are 
then presented to the general membership.
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    The Commission believes that the proposed exemptions should not 
unduly advantage the affected members or subvert the intent of the 
continuing education requirement in NYSE Rule 103A. Waiving the 
operative delay will allow the Exchange to grant waivers immediately to 
those floor members who are eligible under the proposed rule change, 
rather than continuing to extend to deadline for these floor members 
during the 30-day operative delay.
    For these reasons, the Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. Accordingly, the Commission designates the proposed 
rule change to be operative upon filing with the Commission.\13\
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    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. 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-NYSE-2008-48 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-2008-48. 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 
am and 3 pm. 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-2008-48 and should be submitted on or before July 22, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-14832 Filed 6-30-08; 8:45 am]

BILLING CODE 8010-01-P