Pursuant to Section 19(b)(1)  of the Securities Exchange Act of 1934 (“Act”), and Rule 19b-4 thereunder, notice is hereby given that on January 25, 2007, the New York Stock Exchange LLC (“NYSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed amendments to its Rule 440A, as described in Items I, II and III below, which items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The New York Stock Exchange LLC is filing with the Securities and Exchange Commission proposed Rule 440A (“Telephone Solicitations”) which addresses member organizations' telephone solicitations of customers.
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 the proposed rule change is available on the Start Printed Page 14843NYSE's Web site (http://www.NYSE.com), at the NYSE's principal office, and at the Commission's Public Reference Room. 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
NYSE Rule 440A (the “Rule”) addresses member organizations' telephone solicitations of customers. Rule 440A(g) provides “No member or member organization may use a telephone facsimile machine, computer or other device to send an unsolicited advertisement to a telephone facsimile machine, computer or other device.”
Subsection 440A(g)(1) provides that a facsimile advertisement is not “unsolicited” where the recipient has granted the member organization prior express invitation or permission to deliver the advertisement, as further defined in the Rule. This proposed amendment to NYSE Rule 440A would provide that such an advertisement also will not be considered “unsolicited” where there is an “established business relationship” as defined in the present Rule 440A(j).
In addition, changes are proposed to delete the term “member” as used in the Rule to reflect the recent reorganization of the Exchange, and the term “allied member” as redundant within the context of the present regulation.
The amendments to Rule 440A(g) were adopted by the Exchange on December 2, 2004  to incorporate regulations issued by the Federal Communications Commission (“FCC”) and the Federal Trade Commission (“FTC”) relating to the implementation of the National Do Not Call registry and the amendments to the Telephone Consumer Protection Act of 1991. The FCC and FTC regulations contained no exception for facsimiles sent to customers with which a broker-dealer had an “established business relationship” as such term was defined. Subsequently, Congress passed legislation  which restored an exemption for unsolicited faxes sent to a recipient with whom the sender had an established business relationship. Accordingly, the proposed amendments to NYSE Rule 440A(g)(1) will add an exception for established business relationships to the definition of “unsolicited” and will also set forth the measures necessary for a customer to opt out of the receipt of further communications. These standards, which are taken from applicable FCC regulations, generally require that the member organization and the person not only have an established business relationship, but also that the member organization obtain the fax number from the recipient (or the recipient's web site, directory, or advertisement). Further, the recipient must not have stated on those materials that they do not accept unsolicited advertisements at the listed number. The member organization must also take reasonable steps to verify that the recipient consented to have the number listed.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent with Section 6(b)(5)  of the Act which requires NYSE to have rules that are designed to prevent fraudulent and manipulative acts and practices, 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. The proposed amendments will move the Rule into conformity with revised federal regulatory standards and ensure that customers are able to opt out of the receipt of undesired communications.
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 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
The Exchange has neither solicited nor received written comments on the proposed rule change.
III. 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 reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will:
a. By order approve the 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 foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
- Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
- Send an e-mail to firstname.lastname@example.org. Please include File Number SR-NYSE-2007-06 on the subject line.
- Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2007-06. 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 Start Printed Page 14844submission, 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 Room. Copies of such filing also will be available for inspection and copying at the principal office of the NYSE. 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-2007-06 and should be submitted on or before April 19, 2007.Start Signature
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Florence E. Harmon,
3. See Exchange Act Release No. 53382 (Feb. 27, 2006), 71 FR 11251 (Mar. 6, 2006) (SR-NYSE-2005-77).Back to Citation
4. See Exchange Act Release No. 34-52579 (Oct. 7, 2005), 70 FR 60119 (Oct. 14, 2005) (SR-NYSE-2004-73).Back to Citation
5. Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, FCC 03-153 (Jun. 26, 2003), 68 FR 44144 (Jul. 25, 2003).Back to Citation
8. An established business relationship is defined as a prior existing relationship formed by voluntary two-way communication between a member organization and a person where the person has, generally speaking, done business with the member organization within the 18 months preceding the telephone call, the member organization is the broker-dealer of record for the person's account within those 18 months, or the person has contacted the member organization to inquire about a product or service within the three months preceding the telephone call.Back to Citation
9. The Exchange expanded this description of the standards and added the definition of “established business relationship” to this notice during a telephone conversation between William Jannace, Managing Director, Rule and Interpretive Standards, NYSE Regulation, and Elizabeth MacDonald, Special Counsel, Division of Market Regulation, Commission, March 20, 2007.Back to Citation
[FR Doc. E7-5816 Filed 3-28-07; 8:45 am]
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