[Federal Register Volume 76, Number 130 (Thursday, July 7, 2011)]
[Notices]
[Pages 39949-39951]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-16931]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64783; File No. SR-NYSEAMEX-2011-41]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Deleting the Text
of Rule 409(f)--NYSE Amex Equities and Adopting the Text of FINRA Rule
2232
June 30, 2011.
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 June 17, 2011, 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 substantially prepared by the self-
regulatory organization. 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 et seq.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to delete the text of Rule 409(f)--NYSE Amex
Equities and adopt the text of FINRA Rule 2232. 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.
[[Page 39950]]
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to delete the text of Rule 409(f)--NYSE Amex
Equities and adopt the text of FINRA Rule 2232.
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.\4\ Pursuant to Rule 17d-2 under the Act,
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''). NYSE Amex became a party to the
Agreement effective December 15, 2008.\5\
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\4\ See Securities Exchange Act Release No. 62970 (Sept. 22,
2010), 75 FR 59771 (Sept. 28, 2010) (order approving SR-FINRA-2010-
37).
\5\ 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.
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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.\6\
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\6\ 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 (``Dual Members''), 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.
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Rule 409(f)--NYSE Amex Equities and FINRA Rule 2232
In connection with the rule consolidation efforts between the
Exchange and FINRA, the Commission has recently approved FINRA Rule
2232,\7\ which is modeled after NYSE Rule 409(f), NASD Rule 2230 and
NASD IM-2110-6.\8\ FINRA Rule 2232 requires member firms, at or before
the completion of any transaction in any security effected for or with
an account of a customer, to give or send to such customer written
notification (``confirmation'') in conformity with the requirements of
Rule 10b-10 under the Act. A confirmation given or sent pursuant to
FINRA Rule 2232 must further disclose (1) with respect to any
transaction in any NMS stock, as defined in Rule 600 of SEC Regulation
NMS, or any security subject to the reporting requirements of the FINRA
Rule 6600 Series, other than direct participation programs as defined
in FINRA Rule 6420, the settlement date of the transaction; and (2)
with respect to any transaction in a callable equity security, that (A)
the security is a callable equity security and (B) a customer may
contact the member for more information concerning the security.
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\7\ See Securities Exchange Act Release No. 63150 (October 21,
2010), 75 FR 66173 (October 27, 2010) (SR-FINRA-2009-058). See also
Securities Exchange Act Release No. 63561(December 16, 2010), 75 FR
80556 (December 22, 2010) (SR-FINRA-2010-066).
\8\ NYSE Rule 409(f) currently provides that confirmation of all
transactions in securities admitted to dealings on the Exchange,
sent by members or member organizations to their customers, shall
clearly set forth with a suitable legend the settlement date of each
transaction.
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The Exchange proposes to delete the text of Rule 409(f)--NYSE Amex
Equities \9\ and adopt the text of FINRA Rule 2232 as Rule 2232--NYSE
Amex Equities, with certain technical changes. Specifically, for
consistency with Exchange rules, the Exchange proposes to change all
references to ``members'' to ``member organizations.'' The Exchange
proposes that these changes, including new Rule 2232--NYSE Amex
Equities, be effective on the same date as FINRA makes FINRA Rule 2232
effective.\10\
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\9\ Rule 409(f)--NYSE Amex Equities would be marked as
``Reserved'' until such time as NYSE Rule 409 is fully harmonized
with FINRA rules. The Exchange notes that FINRA has proposed a rule
change that would result in the deletion of the remaining text of
FINRA Incorporated NYSE Rule 409. See Securities Exchange Act
Release No. 59921(May 14, 2009), 74 FR 23912 (May 21, 2009) (SR-
FINRA-2009-028).
\10\ See FINRA Regulatory Notice 10-62. The implementation date
is currently scheduled for June 17, 2011. NYSE also has submitted a
companion rule filing amending its rules in accordance with FINRA's
rule changes. See SR-NYSE-2011-26.
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the Act
\11\ in general, and furthers the objectives of Section 6(b)(5),\12\ in
particular, in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system. Specifically, the Exchange
believes that the proposed rule change supports the objectives of the
Act by providing greater harmonization between NYSE Amex Rules and
FINRA Rules of similar purpose, resulting in less burdensome and more
efficient regulatory compliance. 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 Rules.
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\11\ 15 U.S.C. 78f(b).
\12\ 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
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.
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\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 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
[[Page 39951]]
the date of the filing.\15\ However, pursuant to Rule 19b-4(f)(6)(iii),
the Commission may designate a shorter time if such action is
consistent with the protection of investors and the public
interest.\16\ The Exchange has asked the Commission to waive the 30-day
operative delay so that the proposal may become operative immediately
upon filing. In its filing, the Exchange notes that the proposal to add
new Rule 2232--NYSE Amex Equities is substantially similar to the rule
that the Commission approved for FINRA,\17\ and the proposal conforms
the Exchange's Rules with those of FINRA, in furtherance of the
consolidation of the member firm regulation functions of NYSE Amex
Equities, NYSE, and FINRA. For this reason, the Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest, and designates the
proposed rule change to be operative upon filing with the
Commission.\18\
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\15\ Id.
\16\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to
the Commission 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
of the proposed rule change, or such shorter time as designated by
the Commission. The Exchange has satisfied this requirement.
\17\ See note 6, supra.
\18\ 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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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend 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 [email protected]. Please include
File Number SR-NYSEAMEX-2011-41 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-2011-41. 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 Web site
viewing and printing 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. 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-NYSEAMEX-2011-41 and should be submitted
on or before July 28, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-16931 Filed 7-6-11; 8:45 am]
BILLING CODE 8011-01-P