Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC

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Federal Register: March 26, 2010 (Volume 75, Number 58)

Notices

Page 14648-14650

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

DOCID:fr26mr10-107

SECURITIES AND EXCHANGE COMMISSION

Release No. 34-61744; File No. SR-NYSEAMEX-2010-26

Self-Regulatory Organizations; Notice of Filing of Proposed Rule

Change by NYSE Amex LLC Deleting Rule 446--NYSE Amex Equities and

Adopting New Rule 4370--NYSE Amex Equities To Correspond With Rule

Changes Filed by the Financial Industry Regulatory Authority, Inc.

March 19, 2010.

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 March 11, 2010, NYSE Amex LLC (``NYSE Amex'' or the

``Exchange'') filed with the Securities and Exchange Commission (the

``Commission'') the proposed rule change as described in Items I, II, and III 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 delete Rule 446--NYSE Amex Equities and adopt new Rule 4370--NYSE Amex Equities to correspond with rule changes filed by the Financial Industry Regulatory Authority, Inc. (``FINRA'') and approved by the Commission.\4\ The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and http://www.nyse.com.

\4\ See Securities Exchange Act Release No. 60534 (August 19, 2009), 74 FR 44410 (August 28, 2009) (order approving SR-FINRA-2009- 036).

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 delete Rule 446--

NYSE Amex Equities (Business Continuity and Contingency Plans) and adopt new Rule 4370--NYSE Amex Equities (Business Continuity Plans and

Emergency Contact Information) 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 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.\5\

\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\

\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, 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 Amex Equities Rules

In 2008, FINRA deleted FINRA Incorporated NYSE Rule 446 (Business

Continuity and Contingency Plans) as substantively duplicative of NASD

Rules 3510 (Business Continuity Plans) and 3520 (Emergency Contact

Information).\7\ Correspondingly, the Exchange amended Rule 446--NYSE

Amex Equities (Business Continuity and Contingency Plans) to remove the existing text and incorporate NASD Rules 3510 and 3520 by reference.\8\

Subsequently, FINRA adopted, subject to certain amendments, NASD Rules 3510 and 3520 as consolidated FINRA Rule 4370 (Business Continuity

Plans and Emergency Contact Information).\9\

\7\ See Securities Exchange Act Release No. 58533 (September 12, 2008), 73 FR 54652 (September 22, 2008) (order approving SR-FINRA- 2008-036).

\8\ See Securities Exchange Act Release No. 59022 (November 26, 2008), 73 FR 73683 (December 3, 2008) (order approving SR-NYSEALTR- 2008-10).

\9\ See Securities Exchange Act Release No. 60534 (August 19, 2009), 74 FR 44410 (August 28, 2009).

In order to harmonize the NYSE Amex Equities Rules with the approved consolidated FINRA Rules, the Exchange correspondingly proposes to delete Rule 446--NYSE Amex Equities and replace it with proposed Rule 4370--NYSE Amex Equities, which is substantially similar to the new FINRA Rule.\10\ As proposed, Rule 4370--NYSE Amex Equities adopts the same language as FINRA Rule 4370, except for substituting for or adding to, as needed, the term ``member organization'' for the term ``member'', and making corresponding technical changes that reflect the difference between NYSE Amex's and FINRA's membership structures. In addition, in paragraph (f)(2) to proposed Rule 4370--

NYSE Amex Equities, the Exchange added a cross-reference to Rule 416A--

NYSE Amex Equities to ensure that those Exchange members and member organizations that are not FINRA members are required to update the contact information for emergency personnel in accordance with NYSE

Amex Equities Rules.

\10\ New York Stock Exchange LLC has submitted a companion rule filing amending its rules in accordance with FINRA's rule changes.

See SR-NYSE-2010-23.

Finally, in order to ensure that both proposed Rule 4370--NYSE Amex

Equities and FINRA Rule 4370 are fully harmonized, the Exchange also proposes to add Supplementary Material .01 to Rule 4370--NYSE Amex

Equities to provide that, for the purposes of the rule, the term

``associated person'' shall have the same meaning as the terms ``person associated with a member'' or ``associated person of a member'' as defined in Article I (rr) of the FINRA By-Laws.

In addition, the Exchange respectfully requests that the effective date for the proposed rule changes be retroactive to December 14, 2009, the same effective date for FINRA's rule changes.\11\ Approval retroactively effective to December 14, 2009, would ensure that the proposed rule changes are operative and effective at the same time as

FINRA's rule changes, that there are no regulatory gaps between the

FINRA and NYSE Amex Equities Rules and that, as applicable, the NYSE

Amex Equities Rules maintain their status as Common Rules under the 17d-2 Agreement.\12\

\11\ See FINRA Regulatory Notice 09-60 (October 15, 2009).

\12\ As provided in paragraph 2(b) of the 17d-2 Agreement, FINRA and NYSE will amend the list of Common Rules to conform to the rule changes proposed herein.

2. Statutory Basis

The Exchange believes that the proposed rule changes are consistent with Section 6(b) of the Act,\13\ in general, and further the objectives of Section 6(b)(5) of the Act,\14\ 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.

\13\ 15 U.S.C. 78f(b).

\14\ 15 U.S.C. 78f(b)(5).

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

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 the self-regulatory organization consents, the Commission will:

(A) By order approve the 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-NYSEAMEX-2010-26 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.

Page 14650

All submissions should refer to File Number SR-NYSEAMEX-2010-26. 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,\15\ 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 Section, 100 F Street, NE., Washington, DC 20549-1090. 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-2010-26 and should be submitted on or before April 16, 2010.

\15\ The text of the proposed rule change is available on the

Commission's Web site at http://www.sec.gov/.

\16\ 17 CFR 200.30-3(a)(12).

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\16\

Florence E. Harmon,

Deputy Secretary.

FR Doc. 2010-6678 Filed 3-25-10; 8:45 am

BILLING CODE 8011-01-P

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