Document ID: SEC-2007-1485-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-10-29T04:00Z

[Federal Register: October 29, 2007 (Volume 72, Number 208)]
[Notices]               
[Page 61193-61195]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29oc07-91]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56686; File No. SR-NYSE-2007-53]

 
Self-Regulatory Organizations; The New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change, as Modified by Amendments 
Nos. 1 and 2 Thereto, To Amend NYSE Rule 342.13 (``Acceptability of 
Supervisors'')

October 23, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 20, 2007, The New York Stock Exchange LLC (``NYSE'' or 
``Exchange''), filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been substantially prepared by NYSE. On 
September 27, 2007, NYSE filed Amendment No. 1 to the proposed rule 
change.\3\ On October 15, 2007, NYSE filed Amendment No. 2 to the 
proposed rule change.\4\ The Commission is publishing this notice to 
solicit comments on the proposed rule change, as amended, from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 replaced and superseded the original filing 
in its entirety.
    \4\ Amendment No. 2 replaced and superseded Amendment No. 1 in 
its entirety.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange is filing this proposed rule change to amend NYSE Rule 
342.13 (``Acceptability of Supervisors'') to eliminate the current 
requirement in that rule that the General Securities Principal 
Examination (``Series 24 Examination'') be passed after July 1, 2001 in 
order to be recognized by the Exchange as an acceptable alternative to 
the General Securities Sales Supervisor Qualification Examination 
(``Series 9/10 Examination'').
    The text of the proposed rule change is available on NYSE's Web 
site (http://www.nyse.com), at NYSE, and at the Commission's public 

reference room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, 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. 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
    Rule 342 (``Offices--Approval, Supervision and Control'') 
prescribes the Exchange's general supervisory requirements for member 
organizations. Among these requirements, Rule 342.13 (``Acceptability 
of Supervisors'') prescribes the Exchange's qualification standards for 
personnel delegated supervisory responsibility. Prior to 2001, this 
provision provided, in part, that a person delegated supervisory 
responsibility must pass the General Securities Sales Supervisor 
Qualification Examination (``Series 9/10 Examination'') or an 
historical equivalent (e.g., the Series 8 Examination).
    In 2002, the Exchange amended Rule 342.13 \5\ to recognize the 
National Association of Securities Dealers, Inc. (``NASD'')'s \6\ 
General Securities Principal Examination (``Series 24 Examination''), 
if taken and passed after July 1, 2001, as an alternative to the Series 
9/10 Examination requirement for persons whose duties do not include 
supervision of options or municipal securities sales activities.\7\ 
When proposing this amendment, the Exchange represented that NASD, as 
of July 2, 2001, had enhanced the Series 24 Examination by including 
test questions sufficient to provide appropriate coverage of the NYSE 
Rules. The Commission approved the proposed rule change on October 17, 
2002.\8\
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    \5\ See Securities Exchange Act Release No. 46425 (August 28, 
2002), 67 56863 (September 5, 2002) (SR-NYSE-2002-24).
    \6\ NASD is now know as the Financial Industry Regulatory 
Authority, Inc. (``FINRA'').
    \7\ The Series 24 Examination does not address these activities.
    \8\ See Securities Exchange Act Release No. 46631 (October 9, 
2002), 67 FR 64187 (October 17, 2002) (order approving SR-NYSE-2002-
24). See also NYSE Information Memo 02-51 (November 12, 2002).

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[[Page 61194]]

    The Exchange is now proposing to amend Rule 342.13 to eliminate the 
requirement that the Series 24 Examination be passed after July 1, 2001 
in order for it to be recognized by the Exchange as an acceptable 
alternative to the Series 9/10 Examination. The proposed amendment to 
Rule 342.13 would simply provide that ``[t]he General Securities 
Principal Examination (Series 24) is an acceptable alternative for 
persons whose duties do not include the supervision of options or 
municipal securities sales activity.'' \9\
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    \9\ Prospectively, persons may continue to qualify to supervise 
options or municipal securities sales activity by taking and passing 
the Series 24 Examination and also taking and passing the Registered 
Options Principal (Series 4) and/or Municipal Securities Principal 
(Series 53) Examinations.
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    The Exchange's rationale for the proposed amendment is that persons 
who took the Series 24 Examination prior to July 1, 2001 have been 
subject to regulatory and firm element continuing education,\10\ which 
the Exchange believes provides ongoing practical training with respect 
to current regulatory requirements, including NYSE Rules, applicable to 
duties and responsibilities of those persons. Further, the NYSE and the 
NASD rulebooks have converged significantly in the last six years. 
Thus, the persons who took the Series 24 prior to July 1, 2001 have 
been subject to regulatory standards that have, to a large degree, been 
harmonized.\11\ Therefore, the July 1, 2001 cut-off date is no longer 
necessary or appropriate as FINRA works towards achieving a single 
rulebook.
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    \10\ See NYSE Rule 345A.
    \11\ Convergence between the NYSE Rules and FINRA Rules has 
included, in part, standards relating to anti-money laundering, 
supervision, research and internal controls, etc.
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    The proposed amendment is consistent with the Exchange's and 
FINRA's continuing Rule Harmonization Initiative \12\ in that it would 
more closely align the requirements under Rule 342.13 with the 
corresponding supervisory requirements under FINRA's regulatory 
scheme.\13\ The purpose of the Rule Harmonization Initiative is to 
achieve, to the extent practicable, substantive harmonization of the 
two regulatory schemes in an effort to reduce regulatory duplication 
and streamline regulation of self-regulatory organizations.
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    \12\ In anticipation of the approval of the NYSE-Archipelago 
Holdings, Inc. (``Arca'') merger by the Commission, the Exchange 
agreed to initiate a comparison of its ``non-unique'' regulatory 
requirements to corresponding NASD regulatory provisions. See 
Exchange Act Release No. 53382 (February 27, 2006), 71 FR 11253 
(March 6, 2006) (order approving SR-NYSE-2005-77 relating to the 
NYSE's Business Combination with Arca). See also the Exchange's 
recent ``Omnibus Filing'' with the Commission, Securities Exchange 
Act Release No. 56142 (July 26, 2007), 72 FR 42195 (SR-NYSE-2007-
22). See also, the Report by the Exchange on the Process of 
Reconciling Inconsistent Rules (February 27, 2007).
    \13\ See FINRA Rule 1022(a).
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2. Statutory Basis
    The statutory basis for the proposed rule change is Section 6(b)(5) 
of the Act \14\ which requires, among other things, that the rules of 
an exchange be designed to promote just and equitable principles of 
trade, to remove impediments to and perfect the mechanism of a free and 
open market and national market system and, in general, to protect 
investors and the public interest.
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    \14\ 15 U.S.C. 78f(b)(5).
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    NYSE believes the proposed amendment would bring the NYSE 
regulatory scheme into greater harmony with that of FINRA, consistent 
with the goal of reducing regulatory duplication, by eliminating the 
requirement that the Series 24 Examination be passed after July 1, 2001 
in order to be recognized by the Exchange as an acceptable alternative 
to the Series 9/10 Examination for persons whose duties do not include 
supervision of options or municipal securities sales activities.

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 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

    While no comments were solicited or received in response to this 
filing, it is noted that the Commission received a comment letter in 
response to SR-NYSE-2007-41, which eliminated the Securities Manager 
Examination (Series 12).\15\ The comment letter raised the issue as to 
why July 1, 2001 is used as the starting point for recognition by the 
NYSE of the Series 24 Examination. As more fully discussed in the 
Purpose section of this filing, the proposed rule change responds to 
this issue by eliminating the date demarcation, since the Exchange 
believes it no longer serves a compelling regulatory purpose.
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    \15\ See Securities Exchange Act Release No. 55670 (April 25, 
2007), 72 FR 24350 (May 2, 2007).
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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 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 
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-2007-53 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-2007-53. 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.

[[Page 61195]]

Copies of such filing also will be available for inspection and copying 
at the principal office of the 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-2007-53 and should be submitted on 
or before November 19, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-21219 Filed 10-26-07; 8:45 am]

BILLING CODE 8011-01-P