Document ID: SEC-2007-1635-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-12-05T05:00Z

[Federal Register: December 5, 2007 (Volume 72, Number 233)]
[Notices]               
[Page 68613-68614]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05de07-79]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56854; File No. SR-NYSE-2007-53]

 
Self-Regulatory Organizations; The New York Stock Exchange LLC; 
Order Approving Proposed Rule Change, as Modified by Amendments Nos. 1 
and 2 Thereto, To Amend NYSE Rule 342.13 (``Acceptability of 
Supervisors'')

November 28, 2007.

I. Introduction

    On June 20, 2007, The New York Stock Exchange LLC (``NYSE'' 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 amend NYSE Rule 342.13 (``Acceptability of 
Supervisors'') to eliminate the current requirement in the rule that 
the General Securities Principal Examination (``Series 24 
Examination'') be passed after July 1, 2001 in order to be recognized 
by the Exchange as an acceptable alternative to the General Securities 
Sales Supervisor Qualification Examination (``Series 9/10 
Examination'').
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    On September 27, 2007, NYSE filed Amendment No. 1 to the proposed 
rule change. On October 15, 2007, NYSE filed Amendment No. 2 to the 
proposed rule change. The proposed rule change, as modified by 
Amendments Nos. 1 and 2, was published for comment in the

[[Page 68614]]

Federal Register on October 29, 2007.\3\ The Commission received one 
comment letter, which expressed support for the proposed rule 
change.\4\ This order approves the proposed rule change, as amended.
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    \3\ See Securities Exchange Act Release No. 56686 (October 23, 
2007), 72 FR 61193 (October 29, 2007) (the ``Notice'').
    \4\ See letter from Marian H. Desilets, President, Association 
of Registration Management, Inc. to Nancy M. Morris, Secretary, 
Commission, dated November 15, 2007.
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II. Description of the Proposal

    Rule 342 (``Offices--Approval, Supervision and Control'') 
prescribes the Exchange's general supervisory requirements for member 
organizations. Among the requirements, Rule 342.13 (``Acceptability of 
Supervisors'') sets forth the Exchange's qualification standards for 
personnel delegated supervisory responsibility. Before 2001, this 
provision provided, in part, that a person delegated supervisory 
responsibility must pass the General Securities Sales Supervisor 
Qualification Examination (``Series 9/10 Examination'') or an 
historical equivalent (i.e., the Series 8 Examination).
    In 2002, the Exchange amended Rule 342.13 \5\ to recognize the 
National Association of Securities Dealers, Inc. (``NASD'')'s \6\ 
General Securities Principal Examination (``Series 24 Examination''), 
if taken and passed after July 1, 2001, as an alternative to the Series 
9/10 Examination requirement for persons whose duties did not include 
supervision of options or municipal securities sales activities.\7\ At 
that time, the Exchange represented that NASD, as of July 2, 2001, had 
enhanced the Series 24 Examination by including test questions 
sufficient to provide appropriate coverage of the NYSE Rules. The 
Commission approved the proposed rule change on October 17, 2002.\8\ 
The Exchange is now proposing to amend Rule 342.13 to eliminate the 
requirement that the Series 24 Examination be passed after July 1, 2001 
in order for it to be an acceptable alternative to the Series 9/10 
Examination.\9\
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    \5\ See Securities Exchange Act Release No. 46425 (August 28, 
2002), 67 FR 56863 (September 5, 2002) (SR-NYSE-2002-24).
    \6\ NASD is now known as the Financial Industry Regulatory 
Authority, Inc. (``FINRA'').
    \7\ The Series 24 Examination does not address these activities.
    \8\ See Securities Exchange Act Release No. 46631 (October 9, 
2002), 67 FR 64187 (October 17, 2002) (order approving SR-NYSE-2002-
24). See also NYSE Information Memo 02-51 (November 12, 2002).
    \9\ Prospectively, persons may continue to qualify to supervise 
options or municipal securities sales activity by taking and passing 
the Series 24 Examination and also taking and passing the Registered 
Options Principal (Series 4) and/or Municipal Securities Principal 
(Series 53) examinations.
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III. Discussion and Commission Findings

    The Commission has carefully reviewed the proposed rule change and 
finds that it is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange.\10\ In particular, the Commission finds that the proposed 
rule change is consistent with section 6(b)(5) of the Act,\11\ which, 
among other things, requires that the rules of a national securities 
exchange be designed to promote just and equitable principles of trade, 
to foster cooperation and coordination with persons engaged in 
regulating transactions in securities, 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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    \10\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \11\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the proposed amendment to NYSE's rules 
to eliminate the requirement that the Series 24 Examination be passed 
after July 1, 2001 in order for it to be recognized as an acceptable 
alternative to the Series 9/10 Examination is consistent with the Act. 
The Commission notes that the NYSE and the NASD rulebooks have 
converged significantly in the last six years. Thus, the persons who 
took the Series 24 before July 1, 2001 have been subject to regulatory 
standards that have, to a large degree, been harmonized.\12\ Further, 
persons who took the Series 24 Examination before July 1, 2001 have 
been subject to regulatory and firm element continuing education,\13\ 
which provides ongoing training with respect to current regulatory 
requirements, including NYSE Rules, applicable to duties and 
responsibilities of those persons.
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    \12\ Convergence between the NYSE Rules and FINRA Rules has 
included, in part, standards relating to anti-money laundering, 
supervision, research and internal controls, etc.
    \13\ See NYSE Rule 345A.
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    In addition, the Commission believes that the proposed amendment 
furthers the goals of the Exchange's and FINRA's continuing Rule 
Harmonization Initiative \14\ in that it should result in more closely 
aligned requirements under Rule 342.13 and the corresponding 
supervisory requirements under FINRA's regulatory scheme.\15\
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    \14\ The purpose of the Rule Harmonization Initiative is to 
achieve, to the extent practicable, substantive harmonization of the 
two regulatory schemes in an effort to reduce regulatory duplication 
and streamline the rules of self-regulatory organizations.
    \15\ See FINRA Rule 1022(a).
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IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\16\ that the proposed rule change, as amended (SR-NYSE-2007-53), 
be, and hereby is, approved.
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    \16\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-23532 Filed 12-4-07; 8:45 am]

BILLING CODE 8011-01-P