Document ID: SEC-2006-0450-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2006-04-06T04:00Z

[Federal Register: April 6, 2006 (Volume 71, Number 66)]
[Notices]               
[Page 17537-17538]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06ap06-113]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53575; File No. SR-NYSE-2006-23]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Amendments to Exchange Rules 475 and 476

March 30, 2006.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on March 27, 2006, 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 and 
II below, which Items have been prepared by the Exchange. The Exchange 
filed the proposed rule change pursuant to Section 19(b)(3)(A) of the 
Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposed 
rule change effective upon filing with the Commission. 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\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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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 Exchange Rules 475 and 476 in order 
to reconcile amendments to the text of Exchange Rules 475 and 476 as 
previously approved by the Commission.\5\ The proposed amendments 
further seek to remove inadvertently inserted text from the approved 
changes in Exchange Rule 476(l) \6\ and incorporate the corrected text 
of Rule 476(l) into Rule 476(k). In addition, the proposed amendments 
make technical changes and render the rules gender neutral.
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    \5\ See Securities Exchange Act Release Nos. 53124 (January 13, 
2006), 71 FR 3595 (January 23, 2006) (SR-NYSE-2005-37) (which will 
become operative on April 1, 2006), and 53382 (February 27, 2006), 
71 FR 11251 (March 6, 2006) (SR-NYSE-2005-77).
    \6\ See Securities Exchange Act Release No. 53382, supra note 5.
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    The text of the proposed rule change is available on the Exchange's 
Web site (http://www.nyse.com), at the Exchange's Office of the 

Secretary, 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, the Exchange 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 Exchange 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
    On May 23, 2005, the New York Stock Exchange, Inc. (``NYSE Inc.'') 
filed SR-NYSE-2005-37 (``Filing 2005-37'') with the Commission to amend 
Article IX of its Constitution and Rules 475 and 476 to modify certain 
aspects of its disciplinary procedures and to provide a structure for a 
summary suspension hearing and a ``call-up'' procedure for review by 
members of the board of directors, certain members of the Board of 
Executives listed in Rule 476(f), any member of the Regulation, 
Enforcement and Listing Standards Committee and either the division of 
the Exchange that initiated the proceedings or the respondent. On 
January 13, 2006, the Commission approved Filing 2005-37 and its 
subsequent amendments, to be operative on April 1, 2006.\7\
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    \7\ See Securities Exchange Act Release No. 53124,  supra note 
5.
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    On November 3, 2005, NYSE Inc. filed SR-NYSE-2005-77 (``Filing 
2005-77'') with the Commission concerning a proposed rule change 
relating to its business combination with Archipelago Holdings, Inc. 
(``Merger''). Contained in Filing 2005-77, among other proposed 
amendments, were modifications to Rules 475 and 476. On February 27, 
2006, the Commission approved Filing 2005-77 and its subsequent 
amendments to be operative upon the date of the closing of the Merger, 
which occurred on March 7, 2006.\8\ Pursuant to the terms of the 
Merger, the Exchange became the successor entity to NYSE Inc.
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    \8\ See Securities Exchange Act Release No. 53382, supra note 5.
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    Filing 2005-37 references certain committees and boards that are no 
longer part of the corporate structure of the Exchange as approved in 
Filing 2005-77. The Exchange seeks to amend Exchange Rules 475 and 476 
to remove these references to conform the rules to the current 
corporate structure of the Exchange. The proposed rule change seeks to 
revise paragraph lettering to reconcile rule text; to use consistent 
references to current Exchange entities; and to correct minor 
typographical errors.
    In addition, Filing 2005-37 modified sections of the NYSE Inc. 
Constitution as it related to its disciplinary process. However, Filing 
2005-77, among other things, rescinded the NYSE Inc. Constitution and 
incorporated certain of its provisions into Rule 476. The provisions 
incorporated into Rule 476 by Filing 2005-77 are reconciled in this 
filing with the modifications made in Filing 2005-37. Additionally, 
certain corrections are made to the text of Rule 476(l) as approved in 
Filing 2005-77. The Exchange further seeks to incorporate the amended 
text of Rule 476(l) into Rule 476(k) as the second paragraph of Rule 
476(k).
    Specifically, Filing 2005-77 incorporated the provisions from 
Article X, Section 6 of the NYSE Inc. Constitution into Rule 476 as 
section (l). Those provisions govern penalties imposed upon members, 
allied members and member organizations for failure to pay fines or 
other sums due the exchange. Rule 476(l) as approved in Filing 2005-77 
reads as follows:
    (l) Any member, member organization, allied member, approved person 
or registered or non-registered employee of a member organization who 
shall not pay a fine, or any other sums due to the Exchange, within 
forty-five days after the same shall become payable, shall be reported 
by the Exchange Treasurer to the Chairman of the Exchange Board and, 
after written notice mailed to such member, member organization, allied 
member, approved person or registered or non-registered employee of a 
member organization of such arrearages, may be suspended by

[[Page 17538]]

the Exchange Board until payment is made.
    In Filing 2005-77, NYSE Inc. proposed to amend Rule 476(l) above 
and inadvertently included references to approved persons, registered 
and non-registered employees. However, penalties for approved persons, 
registered and non-registered employees that fail to pay fines were 
already covered in the first paragraph of Rule 476(k) and continued to 
be covered in that rule. Thus, the Exchange seeks to remove the phrase 
``approved person or registered and non-registered employee'' from Rule 
476(l) as approved in Filing 2005-77 and then incorporate the amended 
text of Rule 476(l) into Rule 476(k) as the second paragraph of Rule 
476(k).
    In this filing, the Exchange further seeks to remove references to 
``he'' and ``his'' in order to render the rules gender neutral.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirement under section 6(b)(5) of the Act \9\ 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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    \9\ 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

    Written comments were neither solicited nor received.

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

    Because the foregoing proposed rule change does not: (1) 
Significantly affect the protection of investors or the public 
interest; (2) impose any significant burden on competition; and (3) by 
its terms, become operative for 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) \10\ of the Act and Rule 19b-4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19-4(f)(6). Rule 19b-4(f)(6) also requires that 
the Exchange give the Commission written notice of the Exchange's 
intention 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 the filing of the proposed rule 
change. The Commission notes that the Exchange has satisfied the 
pre-filing five-day notice requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally 
may not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay and designate the proposed 
rule change to become operative on April 1, 2006. The Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest.\14\ The Commission 
notes that such waiver would allow the Exchange to reconcile rule 
changes previously approved by the Commission that are due to become 
operative on April 1, 2006. Accordingly, the Commission designates that 
the proposed rule change become operative on April 1, 2006.
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    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ 14 For purposes only of waiving the operative delay for 
this proposal, 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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    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 No. SR-NYSE-2006-23 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2006-23. 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. Copies of such 
filing also will be available for inspection and copying at the 
principal office of the Exchange. 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-2006-23 and should be submitted on or before April 
27, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-4990 Filed 4-5-06; 8:45 am]

BILLING CODE 8010-01-P