Document ID: SEC-2008-1738-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2008-12-31T05:00Z

[Federal Register: December 31, 2008 (Volume 73, Number 251)]
[Notices]               
[Page 80491-80492]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31de08-113]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59143; File No. SR-NYSE-2008-135]

 
 Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC To 
Extend to March 27, 2009, the Operative Date of New York Stock Exchange 
Rule 2 Requirement That NYSE-Only Member Organizations Apply for and Be 
Approved as a Member of the Financial Industry Regulatory Authority, 
Inc.

December 22, 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 December 22, 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 prepared by the self-
regulatory organization. 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\ 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 extend to March 27, 2009, the operative 
date of New York Stock Exchange (``NYSE'' or the ``Exchange'') Rule 2 
requirement that NYSE-only member organizations apply for and be 
approved as a member of the Financial Industry Regulatory Authority, 
Inc. (``FINRA'').

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 aspects 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 proposing to extend to March 27, 2009, the grace 
period for NYSE-only member organizations to apply for and be approved 
as a FINRA member, as required by NYSE Rule 2.
    In connection with the consolidation of NASD and NYSE Regulation 
member firm regulation operations into FINRA, which closed on July 30, 
2007, the Exchange amended NYSE Rule 2 to require NYSE member 
organizations to also be FINRA members.\4\ In connection with those 
rule changes, the Commission approved a 60-day grace period within 
which NYSE-only member organizations must apply for and be approved for 
FINRA membership. In that rule filing, NYSE-only member organizations 
were defined as those member organizations that were not NASD members 
as of the date of the closing of the FINRA transaction. This grace 
period began on October 12, 2007, the date of Commission approval of 
the Exchange's rule filing. In furtherance of the consolidation, FINRA 
adopted NASD IM-1013-1 to enable eligible NYSE member organizations to 
become FINRA members though an expedited process (the ``FINRA Waive-in 
application process'').\5\
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    \4\ See Securities Exchange Act Release No. 34-56654 (Oct. 12, 
2007), 72 FR 59129 (Oct. 18, 2007) (SR-NYSE-2007-67).
    \5\ See Securities Exchange Act Release No. 34-56653 (Oct. 12, 
2007), 72 FR 59127 (Oct. 18, 2007) (SR-NASD-2007-56).
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    At the close of the 60-day grace period, all but two of the former 
NYSE-only member organizations had applied for and been approved as 
FINRA members. On December 12, 2007, the Exchange filed for an 
extension of the grace period to June 30, 2008 for those two firms.\6\ 
On June 30, 2008, the Exchange filed for another extension of the grace 
period to December 31, 2008.\7\ In that filing, the Exchange noted that 
those two firms had unique member qualification issues and were 
ineligible to participate in the FINRA Waive-in application process. As 
of December 19, 2008, one of those two firms has been approved as a 
FINRA member. With respect to the other firm, because the Exchange is 
working on a rule filing to amend Rule 2 to permit a broker dealer to 
be an NYSE member organization without a FINRA membership, the Exchange 
believes that the grace period should be further extended so that the 
remaining firm does not have to re-apply for Exchange membership if the 
proposed change to Rule 2 is approved. Accordingly, the NYSE proposes 
to extend the grace period to March 27, 2009 for the firm that was an 
NYSE member organization as of July 30, 2007, but not a FINRA member.
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    \6\ See Securities Exchange Act Release No. 34-56953 (Dec. 12, 
2007), 72 FR 71990 (Dec. 19, 2007) (SR-NYSE-2007-115).
    \7\ See Securities Exchange Act Release No. 34-58096 (July 3, 
2008), 73 FR 39764 (July 10, 2008) (SR-NYSE-2008-54).
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \8\ that an Exchange have rules that 
are designed 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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    \8\ 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 foregoing rule change is being filed for immediate 
effectiveness pursuant to Section 19(b)(3)(A) \9\ of the

[[Page 80492]]

Act and Rule 19b-4(f)(3) \10\ promulgated thereunder. The proposed rule 
change goes solely to the administration of the self-regulatory 
organization in that it is not a substantive change to NYSE Rule 2 and 
simply extends a pre-existing grace period.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(3).
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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-2008-135 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-2008-135. 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, on official business 
days between the hours of 10 a.m. and 3 p.m. Copies of the filing also 
will be available for inspection and copying at the principal office of 
the self-regulatory organization. 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-2008-135 and should be submitted on or before 
January 21, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-31100 Filed 12-30-08; 8:45 am]

BILLING CODE 8011-01-P