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Federal Register / Vol. 72, No.

173 / Friday, September 7, 2007 / Notices 51483

Number SR–Amex–2007–95 on the SECURITIES AND EXCHANGE Application Form and Membership
subject line. COMMISSION Agreement, is available at FINRA, the
Commission’s Public Reference Room,
Paper Comments [Release No. 34–56347; File No. SR–NASD–
and http://www.finra.org.
2007–056]
• Send paper comments in triplicate II. Self-Regulatory Organization’s
to Nancy M. Morris, Secretary, Self-Regulatory Organizations; Statement of the Purpose of, and
Securities and Exchange Commission, National Association of Securities Statutory Basis for, the Proposed Rule
100 F Street, NE., Washington, DC Dealers, Inc. (n/k/a Financial Industry Change
20549–1090. Regulatory Authority, Inc.); Notice of
Filing of Proposed Rule Change and In its filing with the Commission,
All submissions should refer to File Amendment No. 1 Thereto To Establish NASD included statements concerning
Number SR–Amex–2007–95. This file a Membership Waive-In Process for the purpose of and basis for the
number should be included on the Certain NYSE Member Organizations proposed rule change and discussed any
subject line if e-mail is used. To help the comments it received on the proposed
August 31, 2007. rule change. The text of these statements
Commission process and review your
Pursuant to Section 19(b)(1) of the may be examined at the places specified
comments more efficiently, please use in Item IV below. NASD has prepared
Securities Exchange Act of 1934
only one method. The Commission will summaries, set forth in Sections A, B,
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
post all comments on the Commission’s notice is hereby given that on July 25, and C below, of the most significant
Internet Web site (http://www.sec.gov/ 2007, the National Association of aspects of such statements.
rules/sro.shtml). Copies of the Securities Dealers, Inc. (‘‘NASD’’)
submission, all subsequent A. Self-Regulatory Organization’s
(n/k/a Financial Industry Regulatory Statement of the Purpose of, and
amendments, all written statements Authority, Inc.) filed with the Securities
with respect to the proposed rule Statutory Basis for, the Proposed Rule
and Exchange Commission (‘‘SEC’’ or Change
change that are filed with the ‘‘Commission’’) the proposed rule
Commission, and all written change as described in Items I, II, and 1. Purpose
communications relating to the III below, which Items have been On November 28, 2006, NASD and
proposed rule change between the substantially prepared by NASD.3 On the NYSE Group announced a plan to
Commission and any person, other than August 16, 2007, FINRA filed consolidate their member regulation
those that may be withheld from the Amendment No. 1 to the proposed rule operations into a combined organization
public in accordance with the change. The Commission is publishing intended to be the sole U.S. private-
provisions of 5 U.S.C. 552, will be this notice to solicit comments on the sector provider of member firm
available for inspection and copying in proposed rule change, as amended, from regulation for securities firms that do
the Commission’s Public Reference interested persons. business with the public. Upon closing
Room, 100 F Street, NE., Washington, I. Self-Regulatory Organization’s of the Transaction, NASD adopted the
DC 20549, on official business days Statement of the Terms of Substance of new corporate name, FINRA.5 The
between the hours of 10 a.m. and 3 p.m. the Proposed Rule Change consolidation is intended to streamline
Copies of such filing also will be the broker-dealer regulatory system,
NASD proposes to adopt Interpretive combine technologies, permit the
available for inspection and copying at Material 1013–1 (‘‘IM–1013–1’’), a
the principal office of the Amex. All establishment of a single set of rules and
membership waive-in process for group examiners with complementary
comments received will be posted certain New York Stock Exchange
without change; the Commission does areas of expertise in a single
(‘‘NYSE’’) member organizations, and organization—all of which will serve to
not edit personal identifying Interpretive Material Section 4(e) to enhance oversight of U.S. securities
information from submissions. You Schedule A of the By-Laws, a firms and help ensure investor
should submit only information that membership application fee waiver for protection. Moreover, the new
you wish to make available publicly. All those NYSE member organizations that organization will be committed to
submissions should refer to File apply for membership pursuant to IM– reducing regulatory costs and burdens
Number SR–Amex–2007–95 and should 1013–1. The proposed rule change is for firms of all sizes through greater
be submitted on or before September 24, submitted in furtherance of the regulatory efficiency.
2007. consolidation of the member firm On July 24, 2007, NYSE filed a
For the Commission, by the Division of regulatory functions of NASD and NYSE proposed rule change requiring its
Market Regulation, pursuant to delegated Regulation, Inc. (‘‘NYSE Regulation’’) member organizations to become
authority.7 (‘‘Transaction’’).4 The text of the members of FINRA to achieve the
proposed rule change, including the Transaction’s goal to eliminate
Florence E. Harmon,
FINRA Waive-In Membership duplicative member firm regulation
Deputy Secretary.
(‘‘Mandatory FINRA Membership
[FR Doc. E7–17670 Filed 9–6–07; 8:45 am] 11 15 U.S.C. 78s(b)(1). filing’’).6 Currently, there are
2 17 CFR 240.19b–4.
BILLING CODE 8010–01–P
3 On July 26, 2007, the Commission approved a
approximately 95 NYSE member
proposed rule change filed by NASD to amend organizations that were not also NASD
NASD’s Certificate of Incorporation to reflect its
name change to the Financial Industry Regulatory 5 See supra note 3. The Commission notes that the

Authority, Inc., or FINRA, in connection with the Transaction closed on July 30, 2007. See telephone
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consolidation of the member firm regulatory conference between Nancy Burke-Sanow, Assistant
functions of NASD and NYSE Regulation, Inc. See Director, Commission, and Patrice Gliniecki, Senior
Securities Exchange Act Release No. 56146 (July 26, Vice President and Deputy General Counsel,
2007), 72 FR 42190 (August 1, 2007). FINRA, on July 31, 2007.
4 See Securities Exchange Act Release No. 56145 6 See Securities Exchange Act Release No. 56173

(July 26, 2007), 72 FR 42169 (August 1, 2007) (File (July 31, 2007), 72 FR 44205 (August 7, 2007) (SR–
7 17 CFR 200.30–3(a)(12). No. SR–NASD–2007–023). NYSE–2007–67).

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51484 Federal Register / Vol. 72, No. 173 / Friday, September 7, 2007 / Notices

members that will be required to permit such persons to continue to NYSE-only member organization
become FINRA members. In furtherance function in the capacity for which they admitted pursuant to proposed IM–
of the consolidation, the proposed rule are registered. 1013–1 seeks to expand its business
change would establish a waive-in The Waive-In Application would operations to include any activities
process for these firms to become require the following information: other than the permitted floor activities,
members of FINRA. The proposed rule (1) General company information, such firm must apply for and receive
change would apply to firms that, as of including Central Registration approval to engage in such business
July 25, 2007: (1) Are approved NYSE Depository (CRD) Number and contact activity pursuant to NASD Rule 1017.
member organizations or (2) have person. Upon approval of such business
submitted an application to become an (2) An attestation that all information expansion, the firm would become
NYSE member organization and are on the applicant’s CRD form, as of the subject to all NASD rules, in addition to
subsequently approved for NYSE date of submission of the Waive-In those NYSE rules incorporated by
membership (together ‘‘NYSE-only Application is accurate and complete FINRA.
member organizations’’), provided that and fully reflects all aspects of the Associated persons of an NYSE-only
such firms were not also NASD applicant’s current business, including, member organization admitted to
members as of the closing of the but not limited to, ownership structure, FINRA pursuant to proposed IM–1013–
Transaction (i.e., as of July 30, 2007). management, product lines and 1 would be subject to the same set of
NASD recognizes that NYSE has a disclosures. rules as the firm with which they are
comprehensive membership application (3) The identity of the firm’s associated, namely the NYSE rules
and review process based on similar Executive Representative. incorporated by FINRA, FINRA’s By-
principles and standards to that of (4) Completed and signed Entitlement Laws and Schedules to By-Laws, and
NASD. As such, those NYSE–only Forms. the NASD Rule 8000 and 9000 Series.
member organizations that will become (5) A signed FINRA Membership Inasmuch as these associated persons
FINRA members already have been Agreement. would not be subject to NASD Rules
subjected to an extensive screening (6) Representations that the 1021 or 1031, they would not be
process. Therefore, the proposed rule applicant’s Uniform Application for required to register in a registration
change would establish IM–1013–1, a Broker-Dealer Registration (Form BD) category recognized by FINRA. To the
process that would make such firms will be amended as needed to keep extent that such persons continue to be
eligible to automatically become a current and accurate; that all individual associated solely with a firm whose
FINRA member and to automatically and entity registrations with FINRA will business complies with the limitations
register all associated persons whose be kept current; and that all information imposed on those firms admitted to
registrations are approved with NYSE in and statements contained in the Waive- FINRA pursuant to proposed IM–1013–
registration categories recognized by In Application are current, true and 1, FINRA is not imposing any
FINRA upon submission to FINRA’s complete. registration requirements beyond those
Member Regulation Department The proposed rule change would required by the NYSE, provided their
(‘‘Department’’) of a signed waive-in require the Department to review the business is confined in scope as
membership application (‘‘Waive-In Waive-In Application within three (3) contemplated in proposed IM–1013–1.10
Application’’). Finally, the proposed rule change
business days of receipt and, if
FINRA does not intend to recognize would create Interpretive Material
complete, issue a letter notifying the
any new registration categories upon the Section 4(b)(1) and 4(e) of Schedule A
applicant that it has been approved for
closing of the Transaction. Thus, of the NASD By-Laws, which would
membership. The Membership
associated persons of the NYSE-only exempt the applicants from the
Agreement would become effective on assessment of a FINRA membership
member organizations will be the date of such notification letter.8
automatically registered with FINRA application fee and from fees for each
As set forth in proposed IM–1013–1, initial Form U4 filed by the applicant
only for those registration categories the NYSE-only member organizations
that are recognized jointly by NASD and with FINRA for the registration of a
admitted pursuant to proposed IM– representative or principal associated
NYSE—e.g., a General Securities 1013–1 would be subject to the NYSE
Representative (Series 7); provided, with the firm at the time it submits its
rules incorporated by FINRA, FINRA’s application for FINRA membership
however, that the firm must, upon By-Laws and Schedules to By-Laws,
approval of FINRA membership, submit pursuant to proposed IM–1013–1.
including Schedule A (Assessments and NASD believes the exemption is
an amended Form U4 for each such Fees), and NASD Rule 8000
associated person, denoting the appropriate, since NYSE is mandating
(Investigations and Sanctions) and Rule FINRA membership in furtherance of
corresponding NASD registration 9000 (Code of Procedure) Series,
category(ies) for such person.7 A list of the Transaction and because the waive-
provided that their securities business is in application process will not require
those registration categories is included limited to floor brokerage on the NYSE,
as part of the Waive-In Application. or routing away to other markets orders (i) Routing orders in NYSE-traded securities to an
(Please note that both NASD and NYSE that are ancillary to their core floor away market for any reason relating to their ongoing
recognize the Series 9/10, but for NASD, business under NYSE Rule 70.40 Floor activity, including regulatory compliance or
persons who have passed the Series 9/ (‘‘permitted floor activities’’).9 If an meeting best-execution obligations; or (ii) provided
10 may function only as a General that the majority of transactions effected by the firm
are effected on the NYSE, sending to other markets
Securities Sales Supervisor (see NASD 8 NASD understands that the Mandatory FINRA
orders in NYSE-traded or non-NYSE-traded
Rule 1022(g).) For those associated Membership filing would extend the NYSE-only securities and/or futures if such orders relate to
persons registered in a category member organizations a 60-day grace period within hedging positions in NYSE-traded securities, or are
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which they must apply for and be approved for part of arbitrage or program trade strategies that
recognized only by NYSE, FINRA will FINRA membership. This grace period would run include NYSE-traded securities.
acknowledge such registrations to from the later of the date of Commission approval 10 The licensing and other requirements
of either the instant proposed rule change or the applicable to the NYSE-only member organizations
7 FINRA intends to file a separate rule change to Mandatory FINRA Membership filing. and their associated persons are subject to change
the Forms U4 and U5 to reflect NASD’s change in 9 For purposes of this filing, activities that are as part of the process of establishing a consolidated
corporate name to FINRA. ancillary to a Floor broker’s core business include: rulebook applicable to all FINRA members.

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Federal Register / Vol. 72, No. 173 / Friday, September 7, 2007 / Notices 51485

the same resources by the Department as arguments concerning the foregoing, For the Commission, by the Division of
when a new applicant that is not including whether the proposed rule Market Regulation, pursuant to delegated
already a member of NYSE seeks change is consistent with the Act. authority.12
membership. Comments may be submitted by any of Florence E. Harmon,
The effective date of the proposed the following methods: Deputy Secretary.
rule change will be the date of [FR Doc. E7–17699 Filed 9–6–07; 8:45 am]
Commission approval of the proposed Electronic Comments BILLING CODE 8010–01–P
rule change.
• Use the Commission’s Internet
2. Statutory Basis comment form (http://www.sec.gov/ SECURITIES AND EXCHANGE
NASD believes that the proposed rule rules/sro.shtml); or COMMISSION
change is consistent with the provisions • Send an e-mail to rule-
of Section 15A of the Act, including comments@sec.gov. Please include File [Release No. 34–56339; File No. SR—
Section 15A(b)(6) of the Act,11 in that it Number SR–NASD–2007–056 on the NASDAQ–2007–042]
is designed to prevent fraudulent and subject line.
manipulative acts and practices, Self-Regulatory Organizations; The
promote just and equitable principles of Paper Comments NASDAQ Stock Market LLC; Order
trade and, in general, to protect Approving a Proposed Rule Change,
• Send paper comments in triplicate as Modified by Amendment No. 1, To
investors and the public interest. The
to Nancy M. Morris, Secretary, Modify the Entry and Annual Fees Paid
proposed rule change will facilitate the
Securities and Exchange Commission, by a Company That Lists on Nasdaq
consolidation of member regulation
functions under a single self-regulatory 100 F Street, NE., Washington, DC Upon Emerging From Bankruptcy
organization, resulting in more effective 20549–1090.
August 30, 2007.
and efficient regulation of brokers and All submissions should refer to File
dealers, thereby enhancing investor Number SR–NASD–2007–056. This file I. Introduction
protection, while also ensuring that number should be included on the On April 13, 2007, The NASDAQ
those NYSE-only member organizations subject line if e-mail is used. To help the Stock Market LLC (‘‘Nasdaq’’ or
eligible for the waive-in process meet Commission process and review your ‘‘Exchange’’) filed with the Securities
suitable standards for admission into comments more efficiently, please use and Exchange Commission
FINRA. only one method. The Commission will (‘‘Commission’’), pursuant to Section
B. Self-Regulatory Organization’s post all comments on the Commission’s 19(b)(1) of the Securities Exchange Act
Statement on Burden on Competition Internet Web site (http://www.sec.gov/ of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and
rules/sro.shtml). Copies of the Rule 19b–4 thereunder,2 a proposal to
NASD does not believe that the
submission, all subsequent modify the entry and annual fees paid
proposed rule change will result in any
amendments, all written statements by a company that lists on Nasdaq upon
burden on competition that is not
with respect to the proposed rule emerging from bankruptcy. The
necessary or appropriate in furtherance
change that are filed with the Exchange filed Amendment No. 1 to the
of the purposes of the Act.
Commission, and all written proposed rule change on June 28, 2007.
C. Self-Regulatory Organization’s communications relating to the The proposal was published for
Statement on Comments on the proposed rule change between the comment in the Federal Register on July
Proposed Rule Change Received From Commission and any person, other than 25, 2007.3 The Commission received no
Members, Participants, or Others comments on the proposal. This order
those that may be withheld from the
Written comments were neither approves the proposed rule change, as
public in accordance with the
solicited nor received. modified by Amendment No. 1.
provisions of 5 U.S.C. 552, will be
III. Date of Effectiveness of the available for inspection and copying in II. Description of the Proposal
Proposed Rule Change and Timing for the Commission’s Public Reference The Exchange proposes to modify the
Commission Action Room, 100 F Street, NE., Washington, fees charged to companies that list upon
DC 20549, on official business days emerging from bankruptcy. Specifically,
Within 35 days of the date of
between the hours of 10 a.m. and 3 p.m. Nasdaq proposes to waive the entry fee
publication of this notice in the Federal
Register or within such longer period (i) Copies of such filing also will be (including the application fee) 4 that
as the Commission may designate up to available for inspection and copying at such companies would otherwise be
90 days of such date if it finds such the principal office of FINRA. All required to pay. In addition, for
longer period to be appropriate and comments received will be posted companies listing on the NASDAQ
publishes its reasons for so finding or without change; the Commission does Global Market (including the NASDAQ
(ii) as to which NASD consents, the not edit personal identifying Global Select Market), Nasdaq proposes
Commission will: information from submissions. You to charge the company the minimum
(A) By order approve such proposed should submit only information that annual listing fee applicable to
rule change, or you wish to make available publicly. All companies on that market (currently
(B) institute proceedings to determine submissions should refer to File $30,000) for the first (prorated) year that
whether the proposed rule change Number SR–NASD–2007–056 and
12 17 CFR 200.30–3(a)(12).
should be disapproved. should be submitted on or before
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1 15 U.S.C. 78s(b)(1).
IV. Solicitation of Comments September 28, 2007. 2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 56092
Interested persons are invited to (June 18, 2007), 72 FR 40915.
submit written data, views, and 4 Nasdaq’s entry fee includes a $5,000 non-

refundable application fee. The proposed waiver


11 15 U.S.C. 78o–3(b)(6). would also waive this part of the fee.

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