[Federal Register Volume 70, Number 134 (Thursday, July 14, 2005)]
[Notices]
[Pages 40767-40768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-3720]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51980; File No. SR-NYSE-2005-19]


Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Notice of Filing of Proposed Rule Change To Require Members That Use 
Appendix E To Calculate Net Capital To File Supplemental and 
Alternative Reports

July 6, 2005.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 under the Act,\2\ notice is given that on 
March 8, 2005, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below. These Items have been substantially prepared by the 
Exchange. 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\ 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 amend NYSE Rule 418 to require member 
organizations approved by the Commission to use the alternative method 
of computing net capital contained in Appendix E to Rule 15c3-1 under 
the Act (``Appendix E'') \3\ to file supplemental and alternative 
reports with the Exchange.
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    \3\ 17 CFR 240.15c3-1e. The Commission amended Rule 15c3-1 to 
establish this voluntary, alternative method of computing net 
capital, which is applicable to firms that qualify for consolidated 
supervised entity (``CSE'') treatment. Exchange Act Release No. 
49830 (June 8, 2004), 69 FR 34428 (June 21, 2004).
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    The text of the proposed rule change is available on the Exchange's 
Internet Web site (http://www.nyse.com), at the principal office of the 
NYSE, and at the Commission's Public Reference Room.

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 Exchange 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 these 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 aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this proposal is to provide the Exchange with the 
authority to require member organizations approved by the Commission to 
use the alternative method of computing net capital contained in 
Appendix E (``CSE broker-dealers'') to file certain supplemental and 
alternative reports with the Exchange.
    Rule 17a-5 under the Act \4\ contains broker-dealer reporting 
requirements. Broker-dealers file the monthly and quarterly reports 
required by Rule 17a-5 on Form X-17A-5 (the ``FOCUS Report'').\5\ 
Pursuant to Rule 17a-5(a)(5),\6\ CSE broker-dealers are required to 
file certain additional monthly and quarterly reports. The Exchange has 
created a modified FOCUS Report form for CSE broker-dealers. The form 
contains new line items to capture the additional required reports. The 
proposed rule amendment is designed to require CSE broker-dealers to 
provide the additional reports to the Exchange.
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    \4\ 17 CFR 240.17a-5.
    \5\ 17 CFR 249.617.
    \6\ 17 CFR 240.17a-5(a)(5).
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    Under NYSE Rule 418, the Exchange may at any time require any 
member or member organization to be audited in accordance with the 
requirements of Rule 17a-5. The proposed amendment adds NYSE Rule 
418.25, which would require member organizations that are CSE broker-
dealers to file such supplemental and alternative reports as may be 
prescribed by the Exchange. A copy of the modified FOCUS report that 
CSE broker-dealers would have to file with the Exchange under proposed 
Rule 418.25 is available on the Exchange's Internet Web site (http://www.nyse.com).
2. Statutory Basis
    The Exchange believes that the proposed amendment to NYSE Rule 418 
is consistent with Section 6(b) of the Act \7\ in general, and furthers 
the objectives of Section 6(b)(5) of the Act \8\ in particular, in that 
it is designed 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 and 
perfect the mechanism of a free and open market and to protect 
investors and the public interest.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 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 proposal will impose any 
inappropriate burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Pursuant to Section 19(b)(2) of the Act,\9\ 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 Exchange 
consents, the Commission will:
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    \9\ 15 U.S.C. 78f(b)(2).
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    (A) By order approve such 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 proposed rule change, including whether the 
proposed rule change is consistent with the Act. Comments may be 
submitted by any of the following methods:

[[Page 40768]]

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send e-mail to [email protected]. Please include File 
Number SR-NYSE-2005-19 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE, 
Washington, DC 20549-9303.

    All submissions should refer to File Number SR-NYSE-2005-19. 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 inspection and 
copying in the Commission's Public Reference Section, 100 F Street, 
Washington, DC 20549. Copies of the filings will also be available for 
inspection and copying at the principal office of the NYSE and will be 
available on the Exchange's Internet Web site (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-NYSE-2005-19 
and should be submitted on or before August 4, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E5-3720 Filed 7-13-05; 8:45 am]
BILLING CODE 8010-01-P