Document ID: SEC-2007-0245-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-02-16T05:00Z

[Federal Register: February 16, 2007 (Volume 72, Number 32)]
[Notices]               
[Page 7701]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16fe07-141]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55264; File No. SR-NYSE-2006-45]

 
Self-Regulatory Organizations; New York Stock Exchange LLC.; 
Order Approving Proposed Rule Change Relating to Amendments to Exchange 
Rule 638 Concerning Mediation

February 9, 2007.

I. Introduction

    On June 22, 2006, the New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``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 relating to amendments to 
Exchange Rule 638 concerning mediation. The proposed rule change was 
published for comment in the Federal Register on December 21, 2006,\3\ 
and the Commission received one comment on the proposal.\4\ 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. 54917 (Dec. 11, 2006), 71 FR 
76714 (Dec. 21, 2006).
    \4\ See letter from Stephen A. Hochman to Nancy Morris, dated 
January 16, 2007 (``Hochman'').
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II. Description

    The proposal would delete references in NYSE Rule 638 to the 
mediation pilot program that expired on January 31, 2003. The proposed 
amendments would also codify or, in some cases, recodify certain 
existing mediation procedures, including that: (1) The mediator's fees 
and method of payment are subject to agreement of the parties and the 
mediator, and all such fees and costs incurred in mediation are the 
parties' responsibility; (2) an adjournment fee will be assessed if an 
arbitration hearing is adjourned for purposes of the parties pursuing 
mediation unless the fee is waived under Exchange Rule 617; (3) a 
mediator may not represent a party or act as an arbitrator in an 
arbitration relating to the matter mediated, nor be called to testify 
regarding the mediation in any proceeding;\5\ and (4) the mediation is 
confidential and no record is kept of the proceeding,\6\ and, except as 
may be required by law, the parties and mediator agree not to disclose 
the substance of the mediation without the prior written authorization 
of all parties to the mediation.
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    \5\ See current NYSE Rule 638(a)(4).
    \6\ Id.
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    In addition, the proposed rule change would clarify that any party 
may withdraw from mediation at any time prior to the execution of a 
settlement agreement upon written notification to all other parties, 
the mediator, and the Director of Arbitration. It also would clarify 
that parties may select a mediator on their own or request a list of 
potential mediators from the Exchange, and that, upon request of any 
party, the Director of Arbitration would send the parties a list of 
five potential mediators together with the mediators' biographical 
information described in Rule 608.\7\
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    \7\ See current NYSE Rule 638(a)(2).
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    Finally, the proposed rule change would provide that the parties 
will advise the Exchange as to the name of the agreed-upon mediator. In 
addition, it would clarify that once the parties agree to mediate, the 
Exchange would facilitate the mediation, if requested, by contacting 
the mediator selected and by assisting in making necessary 
arrangements, as well as that parties to mediation may use the Exchange 
meeting facilities in New York, when available, without charge.

III. Summary of Comment

    The Commission received one comment on the proposal.\8\ The 
commenter objected to the provision of the proposed rule change that 
would prohibit a mediator from acting as an arbitrator in an 
arbitration related to the matter mediated.\9\ The NYSE responded that 
because the provision is substantially the same as in the current rule 
this comment is outside the scope of this rule filing.\10\ The 
Commission finds the NYSE's determination that these comments are 
beyond the scope of the rule filing to be reasonable because they 
suggest substantive changes from the current mediation rules that were 
not intended to be addressed by this rule filing. Thus, the Commission 
finds the NYSE's determination not to amend the proposed rule change in 
connection with this comment at this time to be reasonable.
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    \8\ Hochman.
    \9\ Id.
    \10\ See letter from Mary Yeager, Assistant Secretary, NYSE, to 
Katherine A. England, Assistant Director, Division of Market 
Regulation, dated February 7, 2007.
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IV. Discussion and 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.\11\ The 
Commission believes that the proposed rule change will bring greater 
clarity to the mediation process by deleting outdated references to the 
expired mediation pilot program and codifying certain existing 
mediation procedures.
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    \11\ 15 U.S.C. 78f(b)(5).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\12\ that the proposed rule change (SR-NYSE-2006-45), be, and hereby 
is, approved.
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    \12\ 15 U.S.C. 78s(b)(2).

    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. E7-2721 Filed 2-15-07; 8:45 am]

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