Document ID: SEC-2009-1805-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Amex LLC Amending Rules 312- and 321-NYSE Amex
Posted Date: 2009-12-24T05:00Z

[Federal Register: December 24, 2009 (Volume 74, Number 246)]
[Notices]               
[Page 68440-68442]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24de09-38]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61179; File No. SR-NYSEAmex-2009-89]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NYSE Amex LLC Amending Rules 
312- and 321-NYSE Amex Equities and Adopt New Rules 2262- and 2269-NYSE 
Amex Equities Filed by the Financial Industry Regulatory Authority, 
Inc.

December 16, 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 December 14, 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 prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rules 312- and 321-NYSE Amex 
Equities and adopt new Rules 2262- and 2269-NYSE Amex Equities to 
correspond with rule changes filed by the Financial Industry Regulatory 
Authority, Inc. (``FINRA'') and approved by the Securities and Exchange 
Commission (the ``Commission''). The text of the proposed rule change 
is available at the Exchange, 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 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 changes is to amend Rules 312-NYSE 
Amex Equities (Changes Within Member Organizations) and 321-NYSE Amex 
Equities (Formation or Acquisition of Subsidiaries) and adopt new Rules 
2262-NYSE Amex Equities (Disclosure of Control Relationship with 
Issuer) and 2269-NYSE Amex Equities (Disclosure of Participation or 
Interest in Primary or Secondary Distribution) to correspond with rule 
changes filed by FINRA and approved by the Commission.
    Background. On July 30, 2007, FINRA's predecessor, the National 
Association of Securities Dealers, Inc. (``NASD''), and NYSE 
Regulation, Inc. (``NYSER'') consolidated their member firm regulation 
operations into a combined organization, FINRA. Pursuant to Rule 17d-2 
under the Securities Exchange Act of 1934, as amended (the ``Act''), 
the New York Stock Exchange LLC (``NYSE''), NYSER and FINRA entered 
into an agreement (the ``Agreement'') to reduce regulatory duplication 
for their members by allocating to FINRA certain regulatory 
responsibilities for certain NYSE rules and rule interpretations 
(``FINRA Incorporated NYSE Rules''). The Exchange became a party to the 
Agreement effective December 15, 2008.\4\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release Nos. 56148 (July 26, 
2007), 72 FR 42146 (August 1, 2007) (order approving the Agreement); 
56147 (July 26, 2007), 72 FR 42166 (August 1, 2007) (SR-NASD-2007-
054) (order approving the incorporation of certain NYSE Rules as 
``Common Rules''); and 60409 (July 30, 2009), 74 FR 39353 (August 6, 
2009) (order approving the amended and restated Agreement, adding 
NYSE Amex LLC as a party). Paragraph 2(b) of the Agreement sets 
forth procedures regarding proposed changes by FINRA, NYSE or NYSE 
Amex to the substance of any of the Common Rules.
---------------------------------------------------------------------------

    As part of its effort to reduce regulatory duplication and relieve 
firms that are members of FINRA, NYSE and NYSE Amex of conflicting or 
unnecessary regulatory burdens, FINRA is now engaged in the process of 
reviewing and amending the NASD and FINRA Incorporated NYSE Rules in 
order to create a consolidated FINRA rulebook.\5\
---------------------------------------------------------------------------

    \5\ FINRA's rulebook currently has three sets of rules: (1) NASD 
Rules, (2) FINRA Incorporated NYSE Rules, and (3) consolidated FINRA 
Rules. The FINRA Incorporated NYSE Rules apply only to those members 
of FINRA that are also members of the NYSE, while the consolidated 
FINRA Rules apply to all FINRA members. For more information about 
the FINRA rulebook consolidation process, see FINRA Information 
Notice, March 12, 2008.
---------------------------------------------------------------------------

    Proposed Conforming Amendments to NYSE Rules. FINRA adopted NASD 
Rules 2240 (Disclosure of Control Relationship with Issuer) and 2250 
(Disclosure of Participation or Interest in Primary or Secondary 
Distribution) as consolidated FINRA Rules 2262 and 2269, 
respectively.\6\
---------------------------------------------------------------------------

    \6\ In its filing, FINRA also adopted NASD Rule 3340 
(Prohibition on Transactions, Publication of Quotations, or 
Publication of Indications of Interest During Trading Halts) as 
consolidated FINRA Rule 5260. See Securities Exchange Act Release 
No. 60659 (September 11, 2009), 74 FR 48117 (September 21, 2009). 
NYSE Amex is not adopting this FINRA Rule as it is not applicable to 
trading on the Exchange.
---------------------------------------------------------------------------

    Because the protection provided by the new FINRA Rules, as well as 
existing or proposed FINRA Rules and SEC Rules,\7\ is generally broader 
than that provided by FINRA Incorporated NYSE Rules 312(f) and 321.24, 
FINRA deleted those rules. Specifically, FINRA noted that, unlike FINRA 
Incorporated NYSE Rule 312(f)(2), consolidated FINRA Rules 2262 and 
2269 would operate to protect customers without regard as to whether or 
not a member or member organization makes a recommendation on a 
security to a customer. In addition, FINRA noted that the requirements 
of FINRA Incorporated NYSE Rules 312(f)(1) and (3) are sufficiently 
addressed by consolidated FINRA Rules 2262 and 2269 and other rules. 
FINRA also noted that, unlike FINRA Incorporated NYSE Rule 321.24, 
consolidated FINRA Rules 2262 and 2269 require disclosure in 
transactions involving securities beyond those issued

[[Page 68441]]

by a subsidiary of the member organization.\8\
---------------------------------------------------------------------------

    \7\ According to FINRA, the requirements of consolidated FINRA 
Rules 2262 and 2269 are almost identical to SEA Rules 15c1-5 and 
15c1-6, respectively. See Securities Exchange Act Release No. 60659 
(September 11, 2009), 74 FR 48117 (September 21, 2009) (footnotes 4-
6).
    \8\ See Securities Exchange Act Release No. 60659 (September 11, 
2009), 74 FR 48117 (September 21, 2009).
---------------------------------------------------------------------------

    To harmonize the NYSE Amex Equities Rules with the approved FINRA 
Rules, the Exchange correspondingly proposes to delete Rules 312(f)- 
and 321.24-NYSE Amex Equities and replace them with proposed Rules 
2262- and 2269-NYSE Amex Equities, which are substantially similar to 
the new FINRA Rules.\9\ As proposed, Rules 2262- and 2269-NYSE Amex 
Equities adopt the same language as FINRA Rules 2262 and 2269, except 
for substituting for or adding to, as needed, the term ``member 
organization'' for the term ``member'', and making corresponding 
technical changes.
---------------------------------------------------------------------------

    \9\ NYSE has submitted a companion rule filing amending its 
rules in accordance with FINRA's rule changes. See SR-NYSE-2009-125.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with Section 6(b) of the Act,\10\ in general, and further the 
objectives of Section 6(b)(5) of the Act,\11\ in particular, in that 
they are 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 changes also support the principles 
of Section 11A(a)(1) \12\ of the Act in that they seek to ensure the 
economically efficient execution of securities transactions and fair 
competition among brokers and dealers and among exchange markets.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
    \12\ 15 U.S.C. 78k-1(a)(1).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule changes support the 
objectives of the Act by providing greater harmonization between NYSE 
Amex Equities Rules and FINRA Rules of similar purpose, resulting in 
less burdensome and more efficient regulatory compliance for joint 
members. To the extent the Exchange has proposed changes that differ 
from the FINRA version of the Rules, such changes are technical in 
nature and do not change the substance of the proposed NYSE Amex 
Equities Rules.

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 has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \13\ and Rule 19b-4(f)(6) thereunder.\14\ 
Because the 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 prior to 
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, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \14\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\16\ 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.\17\
---------------------------------------------------------------------------

    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
    \17\ 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 met this requirement.
---------------------------------------------------------------------------

    The proposed rule change is based upon the rules of another self-
regulatory organization, and as such is not in any way novel or 
controversial. The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest because such waiver will bring uniformity to the 
Exchange's and FINRA's rules. Accordingly, the Commission hereby grants 
the Exchange's request and designates the proposal operative upon 
filing.\18\
---------------------------------------------------------------------------

    \18\ For the 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).
---------------------------------------------------------------------------

    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-2009-89 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-2009-89. 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,\19\ 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

[[Page 68442]]

Section, 100 F Street, NE., Washington, DC 20549-1090. Copies of the 
filing will also be available for inspection and copying at the NYSE 
Amex'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-
NYSEAmex-2009-89 and should be submitted on or before January 14, 2010.
---------------------------------------------------------------------------

    \19\ The text of the proposed rule change is available on the 
Commission's Web site at http://www.sec.gov/.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30544 Filed 12-23-09; 8:45 am]

BILLING CODE 8011-01-P