Document ID: SEC-2007-1560-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-11-19T05:00Z

[Federal Register: November 19, 2007 (Volume 72, Number 222)]
[Notices]               
[Page 65117-65119]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19no07-111]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56777; File No. SR-NYSE-2007-87]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 
1 Thereto, to Incorporate Certain Definitions of Exchange Act Rules 
13d-1 and 13d-3 Into NYSE Rule 460

November 9, 2007.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 65118]]

(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 28, 2007, the New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') the proposed rule change as described in 
Items I, II, and III below, which Items have been substantially 
prepared by the Exchange. On October 29, 2007, the Exchange filed 
Amendment No. 1 to the proposed rule change. The Commission is 
publishing this notice to solicit comments on the proposed rule, as 
amended, 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 is proposing to amend NYSE Rule 460 to reference Rules 
13d-1(i) and (j), and 13d-3, under the Act for the purpose of 
determining whether a specialist is a beneficial owner of an equity 
security in which the specialist is registered, and to make non-
substantive clarifying amendments to the rule. The text of the proposed 
rule change is available at NYSE, the Commission's Public Reference 
Room, and http://www.nyse.com.

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 NYSE 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 these statements may be examined at the places specified in 
Item IV below. The NYSE 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 NYSE is proposing to add NYSE Rule 460.40 to incorporate the 
definitions of Rules 13d-1(i) and (j), and 13d-3, under the Act \3\ for 
the purpose of determining whether a specialist is a beneficial owner 
of more than ten percent of any security in which the specialist is 
registered under NYSE Rules 460.10 and 460.20.
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    \3\ 17 CFR 240.13d-1(i) and (j); and 17 CFR 240.13d-3.
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    NYSE Rule 460.10 precludes specialists from being the beneficial 
owner, either directly or indirectly, of more than ten percent of the 
outstanding shares of any equity security in which the specialist is 
registered. For purposes of determining whether this ten percent 
threshold has been met, the specialist's position is aggregated with 
those of the specialist's member organization, as well as other 
members, allied members, approved persons, officers, and employees of 
the specialist's member organizations.
    The rule contains a number of exceptions, including that the ten 
percent ownership threshold does not apply to specialists if the 
security is a convertible or derivative security, American Depository 
Receipt, Global Depository Receipt, or similar instrument so long as 
the conversion of such instrument would not result in a position in the 
common stock of such security that exceeds that ten percent threshold.
    Similarly, specialists in Exchange Traded Funds and other 
investment company units or Trust Issued Receipts can own such 
securities so long as the redemption of such securities would not 
result in a position in any equity security in which such specialist is 
also registered that exceeds the ten percent threshold.
    To ensure consistency with federal laws and regulations, the 
Exchange proposes adding NYSE Rule 460.40 to incorporate the definition 
under the Act for determining beneficial ownership of securities. Rule 
13d-3 under the Act defines a beneficial owner as any person who 
directly or indirectly has either voting power over a security or 
investment power, including the power to dispose, or to direct the 
disposition of a security. The rule further provides that all 
securities in the same class, regardless of the form that such 
beneficial ownership takes, shall be aggregated for purposes of 
calculating the number of shares beneficially owned by such person. 
Rule 13d-3 also defines how various financial instruments, including 
options, warrants, convertible securities, and trusts should be treated 
for purposes of determining beneficial ownership.
    Rule 13d-1(i) under the Act provides that for purposes of section 
13(d) of the Act,\4\ including Rule 13d-3 thereunder, the term ``equity 
security'' refers to those securities that are registered pursuant to 
section 12 of the Act.\5\ In addition, Rule 13d-1(j) under the Act 
provides that for purposes of determining the number of outstanding 
shares for any security, firms can rely on an issuer's most recent 
quarterly or annual report, or any more current report, that has been 
filed with the Commission.
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    \4\ 15 U.S.C. 78m.
    \5\ 15 U.S.C. 78l.
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    NYSE Regulation staff also proposes making technical amendments to 
both NYSE Rule 460.10 and 460.20 to clarify the text of those rules. 
These proposed revisions would not effect any substantive changes to 
the rule and are intended to make the rule easier to implement and 
enforce.
2. Statutory Basis
    The Exchange believes that the basis under the Act for this 
proposed rule change is the requirement under section 6(b)(5) \6\ of 
the Act 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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    \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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the NYSE consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule

[[Page 65119]]

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-2007-87 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2007-87. 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 such filing also will be available for 
inspection and copying at the principal office of NYSE. 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-2007-87 and should be 
submitted on or before December 10, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-22509 Filed 11-16-07; 8:45 am]

BILLING CODE 8011-01-P