[Federal Register Volume 70, Number 162 (Tuesday, August 23, 2005)]
[Notices]
[Pages 49349-49350]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4580]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52269; File No. SR-NYSE-2005-19]


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

August 16, 2005.

    On March 8, 2005, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed a proposed rule change with the Securities and 
Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 under 
the Act.\2\ The proposed rule change amends NYSE Rule 418 to require 
member organizations approved by the Commission to use Appendix E to 
Rule 15c3-1 under the Act \3\ to calculate net capital (``CSE broker-
dealers'') to file supplemental and alternative reports with the 
Exchange. The proposed rule change was published for comment in the 
Federal Register on July 14, 2005.\4\ The Commission received no 
comments on the proposal. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \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. Securities Exchange Act 
Release No. 49830 (June 8, 2004), 69 FR 34428 (June 21, 2004).
    \4\ See Securities Exchange Act Release No. 51980 (July 6, 
2005), 70 FR 40767 (July 14, 2005).
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    Rule 17a-5 under the Act \5\ contains broker-dealer reporting 
requirements. Broker-dealers file the monthly and quarterly reports 
required by Rule 17a-5(a) on Form X-17A-5 (the ``FOCUS Report'').\6\ 
Pursuant to Rule 17a-5(a)(5),\7\ 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

[[Page 49350]]

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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    \5\ 17 CFR 240.17a-5.
    \6\ 17 CFR 249.617.
    \7\ 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). The Commission finds that the NYSE's proposal to amend 
Rule 418 is consistent with the requirements of the Act and the rules 
and regulations under the Act applicable to a national securities 
exchange.\8\ In particular, the Commission believes that the proposal 
is consistent with Section 6(b)(5) of the Act,\9\ which requires that 
the rules of the Exchange be designed to prevent fraudulent and 
manipulative acts, to promote just and equitable principles of trade, 
to remove impediments to and perfect the mechanism of a free and open 
market, and, in general, to protect investors and the public interest. 
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\10\ 
that the proposed rule change (SR-NYSE-2005-19) is approved.
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    \8\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ 15 U.S.C. 78f(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4580 Filed 8-22-05; 8:45 am]
BILLING CODE 8010-01-P