
[Federal Register Volume 76, Number 130 (Thursday, July 7, 2011)]
[Notices]
[Pages 39949-39951]
From the Federal Register Online via the Government Printing 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 rule-comments@sec.gov. 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




