[Federal Register Volume 63, Number 5 (Thursday, January 8, 1998)]
[Notices]
[Pages 1135-1139]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-422]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39511; File No. SR-NYSE-96-26]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change and Notice of Filing and Order Granting Accelerated Approval to 
Amendment Nos. 2 and 3 to the Proposed Rule Change by the New York 
Stock Exchange, Inc., Relating to NYSE Rules 342, ``Offices--Approval, 
Supervision and Control,'' 440, ``Books and Records,'' and 472, 
``Communications with the Public''

December 31, 1997.

I. Introduction

    On September 12, 1996, the New York Stock Exchange, Inc. (``NYSE'' 
or ``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 to allow broker-dealers to 
establish reasonable procedures for reviewing registered 
representatives' communications with the public relating to their 
business. On November 7, 1996, the NYSE filed Amendment No. 1 to the 
proposal.\3\ The proposed rule

[[Page 1136]]

change and Amendment No. 1 were published for comment in the Federal 
Register on November 19, 1996.\4\ The Commission received three comment 
letters regarding the proposal.\5\
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    \1\ 15 U.S.C. Sec. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Letter from James E. Buck, Senior Vice President and 
Secretary, NYSE, to Katherine A. England, Assistant Director, 
Division of Market Regulation (``Division''), Commission, dated 
November 6, 1996 (``Amendment No. 1''). Amendment No. 1 makes 
technical revisions to clarify the proposed changes to NYSE Rules 
440, ``Books and Records,'' and 472, ``Communications with the 
Public.'' Specifically, Amendment No. 1 modifies NYSE Rule 440 to 
indicate that members must preserve books and records as required 
under SEC Rule 17a-3 and comply with the recordkeeping format, 
medium and retention period specified in SEC Rule 17a-4. In 
addition, Amendment No. 1 revises paragraph NYSE Rule 472(c) to 
clarify that records retained must be readily available to the 
Exchange, upon request. Under NYSE Rule 472(c), the names of the 
persons who prepared and who reviewed and approved the material must 
be ascertainable from the retained records.
    \4\ See Securities Exchange Act Release No. 37941 (November 13, 
1996), 61 FR 58919.
    \5\ See Letter from Kenneth S. Spirer, Chairman, Technology 
Regulatory Subcommittee of the Securities Industry Association's 
(``SIA'') Technology Issues Committee, to Jonathan G. Katz, 
Secretary, Commission, dated December 9, 1996 (``SIA Letter''); 
Letter from Paul Saltzman, Senior Vice President and General 
Counsel, PSA The Bond Market Trade Association, to Jonathan G. Katz, 
Secretary, Commission, dated December 10, 1996 (``PSA Letter''); and 
Letter from Kenneth S. Spirer, First Vice President and Assistant 
General Counsel, Merrill Lynch, to Jonathan G. Katz, Secretary, 
Commission, dated December 9, 1996 (``Merrill Lynch Letter'').
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    On November 3, 1997, the NYSE filed Amendment No. 2 to the 
proposal.\6\ On November 26, 1997, the NYSE filed Amendment No. 3 to 
the proposal.\7\ This order approves the proposed rule change and 
Amendment No. 1, and approves Amendment Nos. 2 and 3 to the proposal on 
an accelerated basis. The Commission also is approving a substantially 
identical proposal by the National Association of Securities Dealers, 
Inc. (``NASD'').\8\
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    \6\ See Letter from James E. Buck, Senior Vice President and 
Secretary, NYSE, to Katherine A. England, Assistant Director, 
Division, Commission, dated October 31, 1997 (``Amendment No. 2''). 
Prior to filing Amendment No. 2, the NYSE had planned to rescind 
Interpretation 342(a)(b)/04 of the NYSE Interpretation Handbook, 
thereby eliminating the Exchange's requirement that broker-dealers 
review all incoming correspondence. Amendment No. 2 rescinds 
Interpretation 342(a)(b)/04 and replaces it with Interpretation 
342.16/04, which will require broker-dealers to continue to review 
all incoming non-electronic communications addressed to registered 
representatives. Incoming non-electronic communications directed to 
associated persons other than registered representatives, and any 
incoming communications received in electronic format (e.g., e-
mail), will be subject to supervisory procedures established by the 
broker-dealer.
    \7\ See Letter from James E. Buck, Senior Vice President and 
Secretary, NYSE, to Katherine England, Assistant Director, Division, 
Commission, dated November 25, 1997 (``Amendment No. 3''). Amendment 
No. 3 contains the final version of an information memorandum (the 
``Information Memo'') to members which describes the new rules for 
supervision of public communications and provides guidance 
concerning implementation of the new rules.
    \8\ See Securities Act Release No. 39510 (December 31, 1997) 
(order approving File No. SR-NASD-97-24).
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II. Description of the Proposal

    According to the NYSE, new technology and means of communication 
(e.g., e-mail and the Internet) have impacted the way that NYSE member 
organizations and their associated persons conduct business and 
communicate with customers and other members of the public. The 
Exchange states that it worked with a committee comprised of 
representatives from NYSE member organizations to study questions 
relating to the supervision and review of these new means of 
communication and, as a result of its review, developed the proposed 
amendments to NYSE Rules 342, ``Offices--Approval, Supervision, and 
Control,'' 440, ``Books and Records,'' and 472, ``Communications with 
the Public.''
    Currently, NYSE Rule 342.16 ``Supervision of registered 
representatives,'' requires supervisors to review all written and 
electronic correspondence of registered representatives prior to use. 
The NYSE proposes to amend Exchange Rule 342.16 to replace the current 
pre-use review requirement with a rule that will allow broker-dealers 
to establish reasonable procedures for review of registered 
representatives' communications with the public relating to their 
business. Under the proposal, a broker-dealer may continue to require 
pre-use review of all public communications,\9\ alternatively, any 
broker-dealer that chooses to implement other reasonable procedures for 
reviewing registered representatives' public communications must, among 
other things: (1) Develop written supervisory policies and procedures; 
(2) design policies and procedures to reasonably supervise each 
registered representative; and (3) maintain evidence that its 
supervisory policies and procedures have been implemented and make that 
evidence available to the NYSE upon request.
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    \9\ In this regard, the NYSE notes that, given the complexity 
and cost of establishing adequate systems for effectively reviewing 
electronic communications, member firms may decide to continue to 
require pre-use review of all communications. See Information Memo, 
supra note 7, at 2.
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    A broker-dealer's policies and procedures for reviewing the public 
communications of registered representatives also must satisfy the 
requirements of new NYSE Rule 342.17, ``Review of communications with 
the public.'' NYSE Rule 342.17, which will apply to the public 
communications of all associated persons, requires broker-dealers to 
develop written policies and procedures for review of public 
communications that are appropriate for the broker-dealer's business, 
size, structure, and customers. Under NYSE Rule 342.17, a broker-dealer 
that does not require pre-use review of public communications must: (1) 
Regularly educate and train employees in the firm's current policies 
and procedures governing review of communications; (2) document how and 
when employees were educated and trained; and (3) monitor and test to 
ensure implementation and compliance with the firm's policies and 
procedures.
    The NYSE has developed an Information Memo \10\ that provides 
additional guidance and requirements for supervisory procedures adopted 
pursuant to NYSE Rule 342. In addition to noting that broker-dealers 
must develop appropriate supervisory procedures, the Information Memo 
requires that broker-dealers, among other things: (1) specify, in 
writing, the firm's policies and procedures for reviewing each type of 
communication; (2) identify how supervisory reviews will be conducted 
and documented; (3) identify the types of communication that will be 
pre- or post-reviewed and the organizational position(s) responsible 
for conducting reviews of different types of communication; (4) specify 
the minimum frequency of reviews for each type of communication; and 
(5) periodically re-evaluate the effectiveness of the firm's procedures 
for reviewing public communications and consider any necessary 
revisions.
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    \10\ See Amendment No. 3, supra note 7.
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    In addition, the Information Memo requires broker-dealers to: (1) 
Specify procedures for reviewing registered representatives' 
recommendations to customers; (2) require supervisory review of a 
percentage of each registered representative's public communications, 
including recommendations to customers; and (3) consider the complaint 
and overall disciplinary history (if any) of a registered 
representative or other employee in establishing supervisory 
procedures. The Information Memo also states that a broker-dealer's 
supervisory policies and procedures must ensure that all customer 
complaints, whether received via e-mail or in written form, are 
reported to the NYSE in compliance with NYSE Rule 351(d),\11\ and that 
a broker-dealer must prohibit registered representatives' and other 
employees' use of electronic communications to the public unless such 
communications are

[[Page 1137]]

subject to supervisory and review procedures by the firm.
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    \11\ Among other things, NYSE Rule 351(d) requires members and 
member organizations to report to the NYSE statistical information 
regarding customer complaints relating to matters specified by the 
NYSE.
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    The NYSE notes that the standards for communications provided in 
NYSE Rule 472 continue to apply to all communications regardless of the 
transmission medium used or the policies and procedures for review and 
supervision that a broker-dealer adopts pursuant to NYSE rule 342.\12\
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    \12\ Amount other things, NYSE Rule 472 prohibits broker-dealers 
from using any communications with contains (i) any untrue statement 
or omission of a material fact or is otherwise false or misleading; 
(ii) promises of specific results, exaggerated or unwarranted 
claims; (iii) opinions for which there is no reasonable basis; or 
(iv) projections or forecasts of future events which are not clearly 
labeled as forecasts.
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    The NYSE proposes to amend its requirements for review of incoming 
correspondence by rescinding and replacing current Interpretation 
342(a)(b)/04 in the NYSE Interpretation Handbook, which requires 
members to review all incoming correspondence of all associated 
persons, with Interpretation 342.16/04.\13\ Interpretation 342.16/04 
will require broker-dealers to review all incoming non-electronic 
communications directed to registered representatives. Incoming non-
electronic communications directed to associated persons other than 
registered representatives and incoming electronic communications 
(e.g., e-mail) will be subject to the supervisory policies and 
procedures established by the broker-dealer pursuant to NYSE Rule 342.
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    \13\ See Amendment No. 2, supra note 6.
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    The Exchange proposes to amend NYSE rule 472(a) to clarify the 
types of communications that will continue to require pre-use approval. 
NYSE Rule 472(a) currently requires prior approval of any communication 
which is generally distributed or made available by a member to 
customers or the public. NYSE Rule 472(a), as amended, will require 
prior approval of each advertisement, market letter, sales literature, 
or other similar communication which is generally distributed or made 
available to customers or the public. In addition, the NYSE proposes to 
amend NYSE Rule 472(b) to clarify that research reports must be 
approved in advance by a supervisory analyst. The NYSE proposes to 
amend NYSE Rule 472(c) to provide that the names of persons who 
prepared and who reviewed and approved communications with the public 
must be readily ascertainable from the retained records.
    Finally, the NYSE proposes to amend NYSE Rule 440 to indicate that 
members must preserve books and records as required under SEC Rule 17a-
3 and comply with the recordkeeping format, medium and retention period 
specified in SEC Rule 17a-4.\14\
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    \14\ See Amendment No. 1, supra note 3.
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III. Comments

    The Commission received three comment letters regarding the 
proposal.\15\ All three commenters supported the proposal. 
Specifically, the SIA believes that the proposal will provide broker-
dealers with needed flexibility in developing procedures for review of 
correspondence. In addition, the SIA notes that the proposal will not 
diminish the general supervisory responsibilities of firms. Instead, 
``[t]he burden will now be on firms to develop supervisory approaches 
that they can demonstrate are reasonable.'' \16\
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    \15\ See note 5, supra.
    \16\ See SIA Letter, supra note 5, at 2.
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    Similarly, PSA believes that the NYSE's proposal constitutes a 
flexible and functional approach to regulation that will allow member 
firms to integrate electronic communications into their securities 
activities. PSA believes that procedures tailored by individual firms 
to meet their needs are preferable to a uniform set of detailed 
requirements that may be inappropriate for many firms or that may 
quickly become obsolete.\17\
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    \17\ See PSA Letter, supra note 5, at 2.
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    Merrill Lynch also praises the flexible approach proposed by the 
NYSE and believes that the proposal removes a significant impediment to 
the use of electronic communications by eliminating the pre-use review 
requirement for correspondence.\18\
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    \18\ See Merrill Lynch Letter, supra note 5, at 2.
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IV. Discussion

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange, and, in 
particular, the requirements of Section 6(b)(5),\19\ in that it is 
designed to prevent fraudulent and manipulative acts and practices and 
to protect investors and the public interest. As noted above, NYSE Rule 
342.16, as amended, will allow broker-dealers to establish reasonable 
procedures for review of registered representatives' communications 
with the public relating to their business. New NYSE Rule 342.17 will 
require broker-dealers to develop written policies and procedures for 
the review of all associated persons' public communications that are 
appropriate for the broker-dealer's business, size, structure, and 
customers. The Commission believes that the proposed rules will provide 
broker-dealers with some flexibility in adopting and implementing 
supervisory procedures for reviewing associated persons' public 
communications while establishing minimum requirements, guidelines, and 
standards governing the supervisory procedures a broker-dealer may 
adopt. The Commission believes that these standards and guidelines will 
help to ensure that broker-dealers continue to provide appropriate 
supervision of the public communications of their associated persons.
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    \19\ 15 U.S.C. Sec. 78f(b)(5).
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    The Commission agrees with the analysis of the SIA that the 
proposal does not diminish the general supervisory responsibilities of 
broker-dealers.\20\ In this regard, the Commission emphasizes, as it 
has stated previously, that broker-dealers must monitor the trading and 
sales activities of their associated persons and establish effective 
compliance and supervisory procedures to prevent and detect possible 
violations of firm policies and procedures, rules of the self-
regulatory organizations, and federal and state securities laws.\21\ 
The Commission believes that review of registered representatives' and 
other associated persons' public communications is an important 
component of a broker-dealer's duty to supervise its employees, and 
that broker-dealers have substantial supervisory obligations arising 
from the public communications of their associated persons. In 
addition, as the NYSE states in its proposal, the standards for 
communications set forth in NYSE Rule 472 continues to apply to all 
public communications, regardless of the medium of transmission or the 
supervisory policies and procedures a firm adopts.\22\
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    \20\ See SIA Letter, supra note 5, at 2.
    \21\ See NASD, NYSE, North American Securities Administrators 
Association, Inc., and Office of Compliance Inspections and 
Examinations, Commission, Joint Regulatory Sales Practice Sweep 
(1996) (``Joint Sweep Report'') at 1.
    \22\ See note 12, supra, and note 24, infra, for discussions of 
the requirements of NYSE Rule 472.
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    The Commission believes that the minimum standards and requirements 
specified in NYSE Rules 342.16 and 342.17 and in the Information Memo 
will help to ensure that broker-dealers continue to provide appropriate 
supervision of the public communications of their registered 
representatives and other associated persons. In this regard, the 
Commission notes that NYSE Rule 342.16 states that a broker-dealer's 
supervisory policies

[[Page 1138]]

and procedures must be designed to reasonably supervise each registered 
representative. Under NYSE Rule 342.17, a broker-dealer that chooses 
not to require pre-use review of public communications must educate 
employees about the firm's current communications policies and 
procedures, document the employees' education and training, and ensure 
that the firm's policies are implemented and adhered to.
    In addition, the NYSE Information Memo requires broker-dealers to: 
(1) Specify, in writing, the firm's policies and procedures for 
reviewing different types of communications; (2) identify how 
supervisory reviews will be conducted and documented; (3) identify what 
types of communications will be pre-reviewed or post-reviewed; (4) 
identify the organizational position(s) responsible for conducting 
reviews of the different types of communications; (5) specify the 
minimum frequency of reviews for different types of communications; (6) 
monitor the implementation of and compliance with the firm's procedures 
for reviewing public communications; and (7) periodically re-evaluate 
the effectiveness of the firm's procedures for reviewing public 
communications and consider any necessary revisions.
    The Commission believes that these requirements will provide 
guidance to broker-dealers in developing policies for supervising 
public communications and to associated persons in complying with the 
firm's policies. The requirements should help to ensure that broker-
dealers carefully consider the supervisory procedures appropriate for 
different types of communications, closely monitor compliance with 
their firm's policies, and periodically re-evaluate their firm's 
policies and procedures. The Commission expects broker-dealers to 
monitor the effectiveness of their supervisory policies and procedures 
and to promptly make any necessary revisions.
    The Information Memo also requires broker-dealers to: (1) Specify 
procedures for reviewing registered representatives' recommendations to 
customers; (2) require supervisory review of some of each registered 
representative's public communications, including his or her 
recommendations to customers; (3) consider the complaint and overall 
disciplinary history, if any, of registered representatives and other 
employees in developing procedures for supervising their communications 
with the public; (4) provide that all customer complaints, whether 
received via e-mail or in written form from the customer, are reported 
to the NYSE in compliance with NYSE Rule 351(d); and (5) prohibit 
employees' use of electronic communications to the public unless the 
communications are subject to supervisory and review procedures 
developed by the firm.
    The Commission believes that these standards will help to ensure 
that broker-dealers adopt effective and appropriate supervisory 
procedures. For example, reviewing at least some of a registered 
representative's recommendations \23\ and providing for the reporting 
of customer complaints in compliance with NYSE Rule 351(d) may help 
firms to identify potential sales practice problems. Similarly, 
considering a registered representative's complaint and overall 
disciplinary history will help to ensure that broker-dealers implement 
supervisory procedures appropriate for each representative. In this 
regard, the Commission would expect a broker-dealer to consider 
providing heightened supervision for a registered representative with a 
history or pattern of customer complaints, disciplinary actions or 
arbitrations.\24\ Moreover, the Commission notes that the requirements 
specified in NYSE Rule 342 and in the Information Memo are minimum 
requirements; the Commission expects each broker-dealer to implement 
any additional procedures the broker-dealer believes are necessary to 
provide appropriate supervision of all of its associated persons.
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    \23\ With regard to recommendations, the Commission notes that 
NYSE Rule 472.40, ``Specific Standards for Communications,'' 
requires, among other things, that a recommendation have a basis 
which can be substantiated as reasonable and that members make 
certain disclosures when making recommendations. Regardless of the 
supervisory procedures a broker-dealer adopts, the broker-dealer 
must continue to ensure compliance with NYSE Rule 472.40.
    \24\ Similarly, the Joint Sweep Report stated that ``[f]irms 
that hire registered persons that have a history or pattern of 
customer complaints, disciplinary actions, or arbitrations are 
responsible for imposing close supervision over these persons. 
`Normal' supervision is simply not enough; firms must craft special 
supervisory procedures tailored to the individual representatives.'' 
See Joint Sweep Report, supra note 21, at iv. See also NASD Notice 
to Members 97-19 (firm that hires a registered representative with a 
recent history of customer complaints, final disciplinary actions 
involving sales practice abuse or other customer harm, or adverse 
arbitration decisions should determine if it is necessary to develop 
and implement special supervisory procedures tailored to the 
individual registered representative).
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    The Commission believes that several requirements specific to 
electronic communications will further help to ensure that firms adopt 
appropriate supervisory procedures. In this regard, the Commission 
notes that the Information Memo provides that a firm's policies and 
procedures must prohibit registered representatives' and other 
employees' use of electronic communications to the public unless those 
communications are subject to supervisory and review procedures 
developed by the firm. The NYSE Information Memo also states that the 
Exchange expects members to prohibit communications with the public 
from employees' home computers or through third party computer systems 
unless the firm is capable of monitoring the communications.
    The Commission believes that the provisions for review of incoming 
correspondence also are designed to protect investors. In this regard, 
the Commission notes that the NYSE amended its proposal to adopt 
Interpretation 342.16/04 in the NYSE Interpretation Handbook, which 
will continue to require review of all incoming non-electronic 
correspondence directed to registered representatives.\25\ The 
Commission believes that this requirement may provide a broker-dealer 
with early notice of sales practice problems and help to ensure proper 
handling of customer funds. Incoming non-electronic correspondence 
directed to associated persons other than registered representatives, 
and all incoming communications in electronic format, will be subject 
to the policies and procedures the firm establishes pursuant to NYSE 
Rules 342.16 and 342.17.
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    \25\ See Amendment No. 2, supra note 6.
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    The NYSE represents that it will review members' procedures and 
systems periodically to ensure that they are reasonable in view of the 
firm's structure, the nature and size of its business, and its customer 
base.\26\ The Commission expects the NYSE to monitor closely the 
policies and procedures firms adopt pursuant to the proposal to ensure 
that they satisfy the requirements of the NYSE Rules 342.16 and 342.17. 
In addition, the Commission expects the NYSE to review NYSE Rule 342.16 
and 342.17 as it gains experience with the rules and to consider any 
necessary revisions, including additional minimum requirements for 
broker-dealers' communications policies.
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    \26\ See NYSE Information Memorandum, supra note 7, at 5.
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    The Commission believes that the NYSE's proposed amendments to NYSE 
Rule 472 are reasonable and consistent with the Act. Specifically, the 
Commission believes that it is reasonable for the NYSE to amend NYSE 
Rule 472(a) to require prior approval of each advertisement, market

[[Page 1139]]

letter, sales literature, or other similar communication (rather than 
any communication) which is generally distributed or made available to 
customers or the public in order to make NYSE Rule 472(a) consistent 
with NYSE Rule 342, as amended. In addition, the Commission believes 
that the NYSE's proposal to amend NYSE Rule 472(b) to provide that 
research reports must be approved in advance by a supervisory analyst 
will clarify NYSE Rule 472(b) and ensure that broker-dealers review 
research reports in accordance with NYSE Rule 472(b). The Commission 
believes that amendment NYSE Rule 472(c) to provide that the names of 
persons who prepared and who reviewed and approved communications with 
the public must be readily ascertainable from the retained records, and 
that the retained records must be readily available to the NYSE, will 
clarify the NYSE's rule and facilitate examination of broker-dealers.
    Finally, the Commission believes that it is reasonable for the NYSE 
to amend NYSE Rule 440 to indicate that members must preserve books and 
records as required under SEC Rule 17a-3 and comply with the 
recordkeeping format, medium and retention period specified in SEC Rule 
17a-4 \27\ in order to clarify the recordkeeping requirements 
applicable to broker-dealers.
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    \27\ See Amendment No. 1, supra note 3.
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    The Commission finds good cause for approving Amendment Nos. 2 and 
3 prior to the thirtieth day after the date of publication of notice of 
filing thereof in the Federal Register. Amendment No. 2 is designed to 
protect investors by requiring broker-dealers to continue to review all 
non-electronic incoming communications directed to registered 
representatives. Amendment No. 3 strengthens the NYSE's proposal by 
incorporating the Information Memo into the Exchange's proposal. As 
discussed more fully above, the Information Memo provides additional 
requirements and guidelines for broker-dealers' supervisory policies. 
Accordingly, the Commission believes that granting accelerated approval 
of Amendment Nos. 2 and 3 is appropriate and consistent with Sections 
6(b)(5) and 19(b)(2) of the Act.\28\
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    \28\ 15 U.S.C. Secs. 78f(b)(5) and 78s(b)(2).
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V. 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 reason for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (a) by order approve such proposed rule change, or
    (b) institute proceedings to determine whether the proposed rule 
change should be disapproved.

VI. Solicitation of Comments

    Interested persons are invited to submit written date, views and 
arguments concerning Amendment Nos. 2 and 3. Persons making written 
submissions should file six copies thereof with the Secretary, 
Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, 
D.C. 20549. 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 at the Commission's Public Reference Section, 450 Fifth Street, 
N.W., Washington, D.C. Copies of such filing will also be available for 
inspection and copying at the principal office of the NYSE. All 
submissions should refer to the file number SR-NYSE-96-26 and should be 
submitted by January 29, 1998.

VII. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\29\ that the proposed rule change (SR-NYSE-96-26), as amended, is 
approved.

    \29\ 15 U.S.C. Sec. 78s(b)(2).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\30\
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    \30\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 98-422 Filed 1-7-98; 8:45 am]
BILLING CODE 8010-01-M