[Federal Register Volume 76, Number 130 (Thursday, July 7, 2011)]
[Notices]
[Pages 39947-39949]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-16932]



-----------------------------------------------------------------------



SECURITIES AND EXCHANGE COMMISSION



[Release No. 34-64784; File No. SR-NYSEAMEX-2011-42]




Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 

and Immediate Effectiveness of Proposed Rule Change Deleting NYSE Amex 

Equities Rule 351(a)-(d) and Supplementary Material .10 and .13, 

Adopting the Text of FINRA Rule 4530, and Making Certain Conforming 

Changes



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 20, 2011, NYSE Amex LLC (the ``Exchange'' or ``NYSE 

Amex'') filed with the Securities and Exchange Commission



[[Page 39948]]



(the ``Commission'') the proposed rule change as described in Items I, 

II, and III 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.

---------------------------------------------------------------------------



    \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 NYSE Amex Equities Rule 351(a)-(d) 

and Supplementary Material .10 and .13, adopt the text of FINRA Rule 

4530, and make certain conforming changes. 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.



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 NYSE Amex Equities Rule 351(a)-(d) 

and Supplementary Material .10 and .13, adopt the text of FINRA Rule 

4530, and make certain conforming changes.

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, 

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\

---------------------------------------------------------------------------



    \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.

---------------------------------------------------------------------------



    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 (``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.

---------------------------------------------------------------------------



    In connection with the rule consolidation efforts between the 

Exchange and FINRA, the Commission has recently approved FINRA Rule 

4530,\7\ which is modeled after NYSE Rule 351(a)-(d) and NASD Rule 

3070.\8\ FINRA Rule 4530 requires member firms to: (1) Report to FINRA 

certain specified events and quarterly statistical and summary 

information regarding written customer complaints; and (2) file with 

FINRA copies of certain criminal actions, civil complaints and 

arbitration claims. FINRA uses the information for regulatory purposes 

to identify and initiate investigations of firms, offices and 

associated persons that may pose a risk. In most cases, the 

requirements of FINRA Rule 4530 are based on similar requirements in 

the NASD, NYSE and NYSE Amex rules.

---------------------------------------------------------------------------



    \7\ See Securities Exchange Act Release No. 63260 (November 5, 

2010), 75 FR 69508 (November 12, 2010) (SR-FINRA-2010-034). See also 

Securities Exchange Act Release No. 64560 (May 27, 2011), 76 FR 

32246 (June 3, 2011) (SR-FINRA-2011-024).

    \8\ NYSE Amex Equities Rule 351(e) and NYSE Amex Equities Rule 

Interpretation 351(e)/01 (Reports of Investigation) govern trade 

investigation reporting requirements. NYSE Amex Equities Rules 

351(f), 351.11 and 351.12 govern the annual attestation requirement 

of the research analyst conflict of interest rules. These provisions 

will be addressed as part of the supervision rules and research 

analyst conflict of interest rules, respectively. See Regulatory 

Notice 08-24 (Proposed Consolidated FINRA Rules Governing 

Supervision and Supervisory Controls) and Regulatory Notice 08-55 

(FINRA Requests Comment on Proposed Research Registration and 

Conflict of Interest Rules). NYSE Amex Equities Rules 351(a)-(d) 

would be marked as ``Reserved'' until such time as NYSE Amex 

Equities Rule 351 is fully harmonized with FINRA rules.

---------------------------------------------------------------------------



Proposed Rule Change

    The Exchange proposes to adopt the text of FINRA Rule 4530 as NYSE 

Amex Equities Rule 4530, with certain technical changes. For 

consistency with Exchange rules, the Exchange proposes to change all 

references to ``members'' to ``member organizations'' and add a 

definition of ``person associated with a member organization.'' The 

Exchange proposes to delete NYSE Amex Equities Rule 351(a)-(d) and 

Supplementary Material .10 and .13 and make conforming amendments in 

NYSE Amex Equities Rules 342, 401A, and 476A, which contain references 

to NYSE Amex Equities Rule 351, and delete an unnecessary cross-

reference in NYSE Amex Equities Rule 311. The Exchange proposes to make 

NYSE Amex Equities Rule 4530 effective on the same date as FINRA makes 

FINRA Rule 4530 effective.\9\

---------------------------------------------------------------------------



    \9\ See FINRA Regulatory Notice 11-06. The implementation date 

is currently scheduled for July 1, 2011. NYSE also has submitted a 

companion rule filing amending its rules in accordance with FINRA's 

rule changes. See SR-NYSE-2010-27.

---------------------------------------------------------------------------



2. Statutory Basis

    The proposed rule change is consistent with Section 6(b) of the 

Act,\10\ in general, and furthers the objectives of Section 

6(b)(5),\11\ 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 changes support 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.

---------------------------------------------------------------------------



    \10\ 15 U.S.C. 78f(b).

    \11\ 15 U.S.C. 78f(b)(5).

---------------------------------------------------------------------------



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



[[Page 39949]]



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 \12\ and Rule 19b-4(f)(6) thereunder.\13\ 

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.

---------------------------------------------------------------------------



    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).

    \13\ 17 CFR 240.19b-4(f)(6).

---------------------------------------------------------------------------



    A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally 

does not become operative prior to 30 days after the date of the 

filing. However, pursuant to Rule 19b4(f)(6)(iii),\15\ the Commission 

may designate a shorter time if such action is consistent with the 

protection of investors and the public interest. The Exchange has asked 

the Commission to waive the 30-day operative delay so that the proposal 

may become operative immediately upon filing.\16\

---------------------------------------------------------------------------



    \14\ Id.

    \15\ 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.

    \16\ 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).

---------------------------------------------------------------------------



    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 [email protected]. Please include 

File Number SR-NYSEAMEX-2011-42 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-2011-42. 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 20549-1090. 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-2011-42 and should 

be submitted on or before July 28, 2011.



    For the Commission, by the Division of Trading and Markets, 

pursuant to delegated authority.\17\

---------------------------------------------------------------------------



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

---------------------------------------------------------------------------



Cathy H. Ahn,

Deputy Secretary.

[FR Doc. 2011-16932 Filed 7-6-11; 8:45 am]

BILLING CODE 8011-01-P