Daily Rules, Proposed Rules, and Notices of the Federal Government
The Exchange proposes to amend Rule 748 titled "Supervision" to require member organizations for which the Exchange is the Designated Examining Authority ("DEA") to file a list of their branch offices with the Exchange.
The text of the proposed rule change is available on the Exchange's Web site at
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
The purpose of the proposed rule change is to amend Rule 748 which provides that each office, location, department, or business activity of a member or member organization (including foreign incorporated branch offices) shall be under the supervision and control of the member or member organization establishing it and of an appropriately qualified supervisor. When the Exchange is the DEA, it examines its members and member organizations for compliance with Rule 748 with respect to supervision. Accurate information related to branch offices is an important component of the examination process. The Exchange currently does not require members or member organizations to report branch office information.
The Exchange is proposing to adopt a reporting requirement for member organizations for which the Exchange is the DEA to report branch office information for purposes of conducting regulatory oversight, specifically through its examination program. The Financial Industry Regulatory Authority ("FINRA") has a requirement for its members to register and keep current information with respect to branch offices.
Specifically, the Exchange is proposing that each member organization for which the Exchange is the DEA file a Branch Office Disclosure Form with the Exchange which requires identification of the member organization's branch offices.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act
The information on branch offices is necessary for the Exchange to conduct proper regulatory oversight of its member organizations where the Exchange is the DEA.
The Exchange believes that the proposed rule change would be beneficial because it would provide the Exchange with additional information necessary for the supervision of branch offices. The Exchange does not believe that it is burdensome for member organizations for which the Exchange is the DEA to comply with this request as the information pertaining to branch offices is readily available and member organizations are required to supervise employees in those locations. Also, the Exchange is only requiring this information of its member organizations for which it is the DEA because those are the firms for which the Exchange is examining compliance with Rule 748 in connection with sales practices and trading activities and practices. Member organizations for which the Exchange is not the DEA are subject to the rules of their respective DEA with respect to branch office reporting.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant
At any time within 60 days of the filing of the 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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
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 (
* Send an email to
* Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.