Document ID: SEC-2007-0691-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-05-16T04:00Z

[Federal Register: May 16, 2007 (Volume 72, Number 94)]
[Notices]               
[Page 27610-27611]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16my07-120]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55735; File No. SR-NYSE-2007-06]

 
Self-Regulatory Organizations; New York Stock Exchange LLC.; 
Order Approving Proposed Rule Change To Amend NYSE Rule 440A 
(``Telephone Solicitations'')

 May 10, 2007.

I. Introduction

    On January 25, 2007, the New York Stock Exchange LLC (``NYSE'' or 
the ``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 Rule 440A, addressing member 
organizations' telephone solicitations of customers. The proposed rule 
change was published for comment in the Federal Register on March 29, 
2007.\3\ The Commission received no comments on the proposal. This 
order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Exchange Act Release No. 55517 (Mar. 23, 2007), 72 FR 
14842 (Mar. 29, 2007).
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II. Description of the Proposal

    NYSE Rule 440A generally addresses member organizations' telephone 
solicitations of customers. Rule 440A(g) provides ``No member or member 
organization may use a telephone facsimile machine, computer or other 
device to send an unsolicited advertisement to a telephone facsimile 
machine, computer or other device.'' Subsection 440A(g)(1) further 
provides that a facsimile advertisement is not ``unsolicited'' where 
the recipient has granted the member organization prior express 
invitation or permission to deliver the advertisement, as further 
defined in the Rule. This proposed rule change provided that such an 
advertisement also will not be considered ``unsolicited'' where there 
is an ``established business relationship'' as defined in the present 
Rule 440A(j). In addition, the Exchange proposed to delete the term 
``member'' as used in the Rule to reflect the recent reorganization of 
the Exchange,\4\ and the term ``allied member'' as redundant within the 
context of the present regulation.
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    \4\ See Exchange Act Release No. 53382 (Feb. 27, 2006), 71 FR 
11251 (Mar. 6, 2006) (SR-NYSE-2005-77).
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    The amendments to Rule 440A(g) were adopted by the Exchange on 
December 2, 2004 \5\ to incorporate regulations issued by the Federal 
Communications Commission (``FCC'') and the Federal Trade Commission 
(``FTC'') relating to the implementation of the National Do Not Call 
registry and the amendments to the Telephone Consumer Protection Act of 
1991.\6\ The FCC and FTC regulations contained no exception for 
facsimiles sent to customers with which a broker-dealer had an 
``established business relationship'' as such term was defined. 
Subsequently, Congress passed legislation \7\ which restored an 
exemption for unsolicited faxes sent to a recipient with whom the 
sender had an established business relationship. Accordingly, the 
proposed amendments to NYSE Rule 440A(g)(1) added an exception for 
established business relationships to the definition of ``unsolicited'' 
and set forth the measures necessary for a customer to opt out of the 
receipt of further communications. These standards, which are taken 
from applicable FCC regulations,\8\ generally require that the member 
organization and the person not only have an established business 
relationship,\9\ but also that the member organization obtain the fax 
number from the recipient (or the recipient's web site, directory, or 
advertisement). Further, the recipient must not have stated on those 
materials that they do not accept unsolicited advertisements at the 
listed number. Under the proposed rule change, the member organization 
must also take reasonable steps to verify that the recipient consented 
to have the number listed.
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    \5\ See Exchange Act Release No. 34-52579 (Oct. 7, 2005), 70 FR 
60119 (Oct. 14, 2005) (SR-NYSE-2004-73). .
    \6\ Rules and Regulations Implementing the Telephone Consumer 
Protection Act of 1991, FCC 03-153 (Jun. 26, 2003), 68 FR 44144 
(Jul. 25, 2003).
    \7\ Junk Fax Prevention Act of 2005, Pub. L. 109-21, 119 Stat. 
359 (2005).
    \8\ FCC 06-42 (Apr. 5, 2006), 71 FR 56893 (Sept. 28, 2006).
    \9\ An established business relationship is defined as a prior 
existing relationship formed by voluntary two-way communication 
between a member organization and a person where the person has, 
generally speaking, done business with the member organization 
within the 18 months preceding the telephone call, the member 
organization is the broker-dealer of record for the person's account 
within those 18 months, or the person has contacted the member 
organization to inquire about a product or service within the three 
months preceding the telephone call.
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III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 
change is consistent with the Act and, in particular, with Section 
6(b)(5) of the Act, which requires, among other things, that the NYSE's 
rules be designed to promote just and equitable principles of trade, 
and, in general, to protect investors and the public interest.\10\ The 
Commission believes that in bringing the NYSE's Rule setting forth the 
definition and treatment of unsolicited telemarketing communications 
into concurrence with FCC regulations, the proposed rule change will 
harmonize currently disparate regulations and therefore provide greater 
clarity, both to members and customers, as to which communications 
between members and customers qualify as ``unsolicited.'' \11\
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    \10\ 15 U.S.C. 78f(b)(5).
    \11\ In approving this proposed rule change, the Commission 
notes that it has considered the proposed rule's impact on 
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\12\ that the proposed rule change (SR-NYSE-2007-06), be, and hereby 
is, approved.
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    \12\ 15 U.S.C. 78s(b)(2).

[[Page 27611]]

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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-9366 Filed 5-15-07; 8:45 am]

BILLING CODE 8010-01-P