Rule 103.11 provides a procedure to temporarily
reallocate securities listed on the NYSE from one specialist
organization to another on an expedited basis when necessary.
Currently, the Rule requires that the Chief Executive Officer and
two Board of Executive (“BoE”) Floor Representatives make the
decision to reallocate by majority agreement. The participation of
BoE Floor Representatives is on a seniority
basis.
The Exchange believes the
temporary reallocation of a security is most likely to be required
for regulatory reasons and thus is more properly the responsibility
of the Chief Regulatory Officer or his designee. Therefore, the
Exchange has amended the Rule in this regard. Accordingly, Rule
103.11 has been amended to substitute the Chief Regulatory Officer
or his designee for the Chief Executive Officer. BoE Floor
Representatives will continue to be involved in the process.
However, the Exchange believes that, for potential conflict of
interest reasons, only non-specialist BoE Floor Representatives
should be involved in a decision to reallocate a security from one
specialist organization to another.
In addition, the provision in Rule 103.11 that BoE
Floor Representatives be chosen to act on a temporary reallocation
in order of seniority has been removed.
Finally, the amendment to Rule 103.11 provides as an
alternative, that if there are not two non-specialist BoE Floor
Representatives available to make the reallocation decision, the
most senior non-specialist Floor Governor or Governors based on
their current length of service as a Floor Governor would be
authorized to act in their stead.
The amendments are
effective immediately. The amended Rule is attached as Exhibit
A.
Questions concerning this memo
may be directed to Donald Siemer, at (212)
656-6940.
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