Document ID: SEC-2009-0283-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Alternext US LLC
Posted Date: 2009-03-04T05:00Z

[Federal Register: March 4, 2009 (Volume 74, Number 41)]
[Notices]               
[Page 9450-9452]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04mr09-95]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59451; File No. SR-NYSEALTR-2009-10]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by 
NYSE Alternext US LLC Amending Rule 472-NYSE Alternext Equities 
(Communications With the Public)

February 25, 2009.
    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 February 5, 2009, NYSE Alternext US LLC (the 
``Exchange'' or ``NYSE Alternext'') 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 prepared by 
the self-regulatory organization. The Exchange filed the proposal as a 
``non-controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \4\ and Rule 19b-4(f)(6) thereunder.\5\ 
NYSE Alternext filed Amendment No. 1 to the proposed rule change on 
February 12, 2009.\6\ 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.
    \4\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \5\ 17 CFR 240.19b-4(f)(6).
    \6\ Amendment No. 1 removed unnecessary language regarding the 
operative date of the proposed rule change.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 472-NYSE Alternext Equities to 
conform with proposed amendments to corresponding NYSE Rule 472 
submitted in a companion filing by the New York Stock Exchange LLC 
(``NYSE'').\7\
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    \7\ See SR-NYSE-2009-14 (submitted on February 5, 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 amend Rule 472-NYSE 
Alternext Equities to conform with proposed amendments to corresponding 
NYSE Rule 472, submitted in a companion filing by the NYSE, which 
itself conforms with amendments to corresponding FINRA Incorporated 
NYSE Rule 472 recently filed by FINRA and approved by the Commission.
Background
    As described more fully in a related rule filing,\8\ 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 (``Amex''), a subsidiary of AMC, became a subsidiary 
of NYSE Euronext called NYSE Alternext US LLC, and continues to operate 
as a national securities exchange registered under Section 6 of the 
Act.\9\ The effective date of the Merger was October 1, 2008.
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    \8\ 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).
    \9\ 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 Alternext Trading 
Systems'') are operated by the NYSE on behalf of the Exchange.\10\
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    \10\ 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 Alternext adopted NYSE 
Rules 1-1004, subject to such changes as necessary to apply the Rules 
to the Exchange, as the NYSE Alternext Equities Rules to govern trading 
on the NYSE Alternext Trading Systems.\11\ The NYSE Alternext 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 Alternext Equities Rules as necessary to conform 
with rule changes to corresponding NYSE Rules filed by the NYSE.
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    \11\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63); Securities 
Exchange Act Release No. 58833 (October 22, 2008), 73 FR 64642 
(October 30, 2008) (SR-NYSE-2008-106); Securities Exchange Act 
Release No. 58839 (October 23, 2008), 73 FR 64645 (October 30, 2008) 
(SR-NYSEALTR-2008-03); Securities Exchange Act Release No. 59022 
(November 26, 2008), 73 FR 73683 (December 3, 2008) (SR-NYSEALTR-
2008-10); and Securities Exchange Act Release No. 59027 (November 
28, 2008), 73 FR 73681 (December 3, 2008) (SR-NYSEALTR-2008-11).
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Proposed Conforming Amendments to NYSE Alternext Equities Rules
    As noted above, the Exchange proposes to amend Rule 472--NYSE 
Alternext Equities to conform with proposed amendments to corresponding 
NYSE Rule 472 submitted in a companion filing by the NYSE. As discussed 
in more detail below, the NYSE is filing the proposed rule change to 
harmonize NYSE Rule 472 with changes to corresponding Incorporated NYSE 
Rule 472 recently filed by the Financial Industry Regulatory Authority, 
Inc. (``FINRA'') and approved by the Commission.\12\ The Exchange is 
proposing to adopt the NYSE's proposed rule change in the form that it 
was filed with the Commission, subject to such technical changes as are 
necessary to apply the changes 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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    \12\ See Securities Exchange Act Release No. 59096 (December 12, 
2008), 73 FR 77085 (December 18, 2008) (SR-FINRA-2008-044).
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    FINRA amended NASD Rules 2210 (Communications with the Public) and 
2211 (Institutional Sales Material and Correspondence) and FINRA 
Incorporated NYSE Rule 472 (Communications with the Public) to remove, 
in certain circumstances, the

[[Page 9451]]

pre-approval requirements for the use of ``market letters.'' \13\
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    \13\ See Securities Exchange Act Release No. 59096 (December 12, 
2008), 73 FR 77085 (December 18, 2008).
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    Specifically, FINRA created a new definition of the term ``market 
letter'' in NASD Rule 2211 and modified the definition in FINRA 
Incorporated NYSE Rule 472 to mean any communication specifically 
excepted from the definition of ``research report'' under NASD Rule 
2711(a)(9)(A) and FINRA Incorporated NYSE Rule 472.10(2)(a). In 
addition, FINRA amended the definition of ``sales literature'' in NASD 
Rule 2210 to exclude market letters. FINRA also amended FINRA 
Incorporated NYSE Rule 472 to eliminate the requirement that a 
qualified person approve market letters in advance of distribution. 
Finally, FINRA amended the definition of ``correspondence'' in NASD 
Rule 2211 to include market letters (as well as any written letter or 
electronic mail message) distributed by a member to one or more of its 
existing retail customers and fewer than 25 prospective retail 
customers within any 30 calendar-day period.
    NYSE correspondingly proposes to amend NYSE Rule 472 to conform to 
FINRA's approved amendments to the incorporated version of the Rule. 
Under the proposed amended NYSE Rule 472, members and member 
organizations would be permitted to distribute ``market letters,'' as 
redefined, to customers and the public without obtaining prior approval 
by a supervisory analyst or qualified person. As redefined under the 
proposed amendments, ``market letters'' would comprise any 
communication that is excepted from the definition of ``research 
report'' contained in NYSE Rule 472.10(2)(a). As communications with 
the public, market letters remain subject to the supervision and review 
requirements of NYSE Rule 342.17, which require each member and member 
organization to establish written policies and procedures that are 
appropriate for their business, size, structure and customers for the 
review of such communications.\14\
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    \14\ FINRA has proposed to amend the current requirements 
governing the supervision and review of correspondence, including 
FINRA Incorporated NYSE Rule 342.17 and NASD Rule 3010. See 
Regulatory Notice 08-24 (May 2008).
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    The Exchange proposes to correspondingly amend Rule 472--NYSE 
Alternext Equities in the form proposed by the NYSE, subject to such 
changes as are necessary to apply the proposed changes to the Exchange. 
The Exchange also proposes to add ``-NYSE Alternext Equities'' to the 
title of the Rule.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\15\ in general, and further 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. The proposed rule change also supports the principles 
of Section 11A(a)(1) \17\ of the Act in that it seeks to ensure the 
economically efficient execution of securities transactions and fair 
competition among brokers and dealers and among exchange markets.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
    \17\ 15 U.S.C. 78k-1(a)(1).
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    The Exchange believes that the proposed rule change supports the 
objectives of the Act by providing greater harmonization among NYSE 
Rules, NYSE Alternext Equities Rules and FINRA Rules of similar 
purpose, resulting in less burdensome and more efficient regulatory 
compliance for their common members and member organizations. To the 
extent the Exchange has proposed changes that differ from the proposed 
NYSE version of Rule 472, such changes are technical in nature and do 
not change the substance of the proposed NYSE Alternext Equities Rule.

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 Exchange believes that the proposal qualifies for immediate 
effectiveness upon filing as a non-controversial rule change in 
accordance with Section 19(b)(3)(A) of the Act \18\ and Rule 19b-
4(f)(6) \19\ thereunder. The Exchange asserts that the proposed rule 
change (i) will not significantly affect the protection of investors or 
the public interest, (ii) will not impose any significant burden on 
competition, and (iii) by its terms, will not become operative for 30 
days after the date of this filing, or such shorter time as the 
Commission may designate, if consistent with the protection of 
investors and the public interest. In addition, the Exchange provided 
the Commission with written notice of its intent to file the proposed 
rule change, along with a brief description and text of the proposed 
rule change, at least five business days prior to the date of filing.
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    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of the filing. 
However, pursuant to Rule19b-4(f)(6)(iii),\20\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange believes the 
waiver of this period will allow it to conform its rule to NYSE and 
FINRA rules without delay and ensure that there is no regulatory gap 
among those rules. The Commission has determined that waiving the 30-
day operative delay of the Exchange's proposal is consistent with the 
protection of investors and the public interest because such waiver 
will allow the Exchange to promptly conform its rule to NYSE and FINRA 
rules and ensure elimination of any potential regulatory gap.\21\ 
Therefore, the Commission designates the proposal as operative upon 
filing. 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.
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    \20\ 17 CFR 240.19b-4(f)(6)(iii).
    \21\ 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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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.

[[Page 9452]]

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-NYSEALTR-2009-10 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEALTR-2009-10. 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 20549-1090. Copies of the filing will also be 
available for inspection and copying at the NYSE's principal office and 
on its Internet 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-NYSEALTR-2009-10 and should be submitted 
on or before March 25, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-4558 Filed 3-3-09; 8:45 am]

BILLING CODE 8011-01-P