Document ID: SEC-2009-1194-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC
Posted Date: 2009-08-24T04:00Z

[Federal Register: August 24, 2009 (Volume 74, Number 162)]
[Notices]               
[Page 42714-42716]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24au09-115]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60511; File No. SR-NYSEAMEX-2009-51]

 
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change by NYSE Amex LLC 
Adopting Rule 406--NYSE Amex Equities as New Rule 3250--NYSE Amex 
Equities To Conform to a Proposed Rule Change Submitted in a Companion 
Filing by the New York Stock Exchange LLC

August 17, 2009.
    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 July 28, 2009, NYSE Amex LLC (the ``Exchange'' or ``NYSE 
Amex'') 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 self-
regulatory organization. The Exchange has designated this proposal 
eligible for immediate effectiveness pursuant to Section 19(b)(3)(A) of 
the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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).
    \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 proposes to adopt Rule 406--NYSE Amex Equities 
(Designation of Accounts) as new Rule 3250--NYSE Amex Equities to 
conform to a proposed rule change submitted in a companion filing by 
the New York Stock Exchange LLC (``NYSE'').\5\ The text of the proposed 
rule change is available at the Exchange, the Commission's Public 
Reference Room, and http://www.nyse.com.
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    \5\ See SR-NYSE-2009-75, formally submitted on July 28, 2009.
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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
    The purpose of the proposed rule change is to adopt Rule 406 NYSE 
Amex Equities (Designation of Accounts) as new Rule 3250 NYSE Amex 
Equities to conform to a proposed rule change submitted in a companion 
filing by the NYSE.\6\
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    \6\ The Commission notes that this proposed rule change would 
also conform NYSE Amex Rules with a rule change recently filed by 
the Financial Industry Regulatory Authority, Inc. (``FINRA'') and 
approved by the Commission. See Securities Exchange Act Release No. 
59947 (May 20, 2009), 74 FR 25293 (May 27, 2009) (order approving 
FINRA 2009-017).
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Background
    As described more fully in a related rule filing,\7\ NYSE Euronext 
acquired The Amex Membership Corporation (``AMC'') pursuant to an 
Agreement and Plan of Merger, dated January 17, 2008 (the ``Merger''). 
In connection with the Merger, the Exchange's predecessor, the American 
Stock Exchange LLC, a subsidiary of AMC, became a subsidiary of NYSE 
Euronext called NYSE Alternext U.S. LLC, and continues to operate as a 
national securities exchange registered under Section 6 of the Act.\8\ 
The effective date of the Merger was October 1, 2008.
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    \7\ 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) (approving the Merger).
    \8\ 15 U.S.C. 78f.
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    In connection with the Merger, on December 1, 2008, the Exchange 
relocated all equities trading conducted on the Exchange legacy trading 
systems and facilities located at 86 Trinity Place, New York, New York, 
to trading systems and facilities located at 11 Wall Street, New York, 
New York (the ``Equities Relocation''). The Exchange's equity trading 
systems and facilities at 11 Wall Street (the ``NYSE Amex Trading 
Systems'') are operated by the NYSE on behalf of the Exchange.\9\
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    \9\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63) (approving 
the Equities Relocation).
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    As part of the Equities Relocation, NYSE Amex adopted NYSE Rules 1-
1004, subject to such changes as necessary to apply the Rules to the 
Exchange, as the NYSE Amex Equities Rules to govern trading on the NYSE 
Amex Trading Systems.\10\ The NYSE Amex Equities Rules, which became 
operative on December 1, 2008, are substantially identical to the 
current NYSE Rules 1-1004 and the Exchange continues to update the NYSE 
Amex Equities Rules as necessary to conform with rule changes to 
corresponding NYSE Rules filed by the NYSE.
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    \10\ See Securities Exchange Act Release Nos. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63); 58833 
(October 22, 2008), 73 FR 64642 (October 30, 2008) (SR-NYSE-2008-
106); 58839 (October 23, 2008), 73 FR 64645 (October 30, 2008) (SR-
NYSEALTR-2008-03); 59022 (November 26, 2008), 73 FR 73683 (December 
3, 2008) (SR-NYSEALTR-2008-10); and 59027 (November 28, 2008), 73 FR 
73681 (December 3, 2008) (SR-NYSEALTR-2008-11).
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Proposed Conforming Amendment to NYSE Amex Equities Rules
    As noted above, the Exchange proposes to adopt Rule 406--NYSE Amex 
Equities as new Rule 3250--NYSE Amex Equities to conform to a proposed 
rule change submitted in a companion filing by the NYSE. As discussed 
in more detail below, the NYSE is filing the proposed rule change to 
harmonize the NYSE Rules with a change to corresponding Incorporated 
NYSE Rules filed by FINRA and approved by the Commission.\11\ Unless 
specifically noted, the Exchange is proposing to adopt the NYSE's 
proposed rule change in the form that it has been approved for filing 
by the Commission, subject to such technical changes as are necessary 
to apply the NYSE's proposed rule change to the Exchange. The Exchange 
further proposes that the operative date of the rule change be the same 
as the operative date of the NYSE's proposed rule change on which this 
filing is based.
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    \11\ See Securities Exchange Act Release No. 59947 (May 20, 
2009), 74 FR 25293 (May 27, 2009) (order approving FINRA 2009-017).
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    Specifically, FINRA adopted FINRA Incorporated NYSE Rule 406

[[Page 42715]]

(Designation of Accounts) as consolidated FINRA Rule 3250, subject to 
some minor technical changes. FINRA Rule 3250 provides that no member 
shall carry an account on its books in the name of a person other than 
that of the customer. However, an account may be designated by a number 
or symbol, provided the member organization has a written statement of 
ownership signed by the customer.\12\
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    \12\ Id. As noted by FINRA, member organizations are subject to 
additional requirements regarding customer accounts under the Act. 
See, e.g., 17 CFR 240.17a-3(a)(9) (requiring records indicating the 
name and address of the beneficial owner of cash and margin customer 
accounts).
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    FINRA adopted FINRA Incorporated NYSE Rule 406 (Designation of 
Accounts) as consolidated FINRA Rule 3250 because it believes the Rule 
is an important enforcement tool used to address, inter alia, sales 
practice abuses, including commingling of funds, failure to disclose 
ownership interests in accounts and unauthorized trading, and should be 
applied to all FINRA members. In addition, the Rule provides customers 
and their accounts with a level of anonymity that may be useful while 
still permitting identification to the member organization carrying the 
account as well as regulators. Upon adoption of Rule 3250, FINRA made 
minor technical changes to apply the Rule to all FINRA members, 
replacing the terms ``member organization'' or ``organization'' with 
the term ``member.'' \13\
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    \13\ See Securities Exchange Act Release No. 59947 (May 20, 
2009), 74 FR 25293 (May 27, 2009).
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    To harmonize the NYSE Rules with the approved FINRA Rules, NYSE 
correspondingly proposes to adopt NYSE Rule 406 as new Rule 3250, which 
is substantially similar to the new FINRA rule. As proposed, NYSE Rule 
3250 adopts the same language as FINRA Rule 3250, except for retaining 
or adding, as needed, the term ``member organization'' and making 
corresponding technical changes. As with the consolidated FINRA Rule, 
under proposed NYSE Rule 3250 Exchange member organizations will be 
required to carry customer accounts in the name of the customer, except 
that an account may be designated by a number or symbol, as long as the 
member maintains documentation identifying the customer.\14\
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    \14\ See SR-NYSE-2009-75, formally submitted on July 28, 2009.
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    The Exchange proposes to correspondingly adopt Rule 406--NYSE Amex 
Equities as new Rule 3250--NYSE Amex Equities in the form proposed by 
the NYSE.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\15\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\16\ in particular, in that it 
is 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.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 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

    Because the foregoing 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 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 become 
effective pursuant to Section 19(b)(3)(A) of the Act \17\ and Rule 19b-
4(f)(6) thereunder.\18\
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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 requested that the Commission waive the 30-day 
operative delay so that the proposal may become operative immediately 
upon filing. The Commission has determined that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest because such waiver will ensure the elimination of any 
potential regulatory gap among the Exchange's, the NYSE's and FINRA's 
rules. Therefore, the Commission designates the proposal operative upon 
filing.\19\
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    \19\ 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. 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-2009-51 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-2009-51. 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 a.m. and 3 p.m. Copies of the filing will also be available

[[Page 42716]]

for inspection and copying at the principal office of the Exchange and 
on its 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-NYSEAMEX-2009-51 and should be submitted 
on or before September 14, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-20198 Filed 8-21-09; 8:45 am]

BILLING CODE 8010-01-P