Effective on the date of the Merger, NYSE Rule 325(e)
will be amended to require a Member Organization (who employs a
Member), rather than an individual Member, to be responsible for
presenting the evidence of financial responsibility required by the
Rule.1
Currently, Rule
325(e) states that each Member who executes orders on the floor of
the NYSE must present evidence of his/her financial responsibility
in the amount of $100,000 by one of several methods acceptable to
the NYSE. This requirement is in addition to the net capital
requirement prescribed in SEA Rule 15c3-1. Acceptable means for
compliance currently include surety bonds, guarantees by clearing
organizations, proper escrow accounts, letters of credit, pledged
securities, etc.
Member(s) who
have met the Rule 325(e) financial responsibility obligation through
the use of their NYSE seat will no longer be able to do so after the
Merger and must elect an alternate method. See Exhibit A, attached
hereto, for the amended Rule 325(e), as currently proposed.
Member(s) who currently use surety
bond(s) to satisfy their Rule 325(e) financial responsibility
obligation will be able to continue to use the current bond if the
bond is revised to reflect that the Member Organization is the
beneficiary of the guarantee. Member Organizations electing this
method should contact their surety bond provider and ensure that the
necessary revisions are made.
Attached hereto, as Exhibit B, is the form of an
electronic survey that must be completed and returned to the NYSE
via the NYSE’s Electronic Filing
Platform (“EFP”) within 7 business
days from the date your organization acquires a trading
license(s).
Documentation
supporting your election(s) on this form should be forwarded,
separately from the electronic survey, to your organization’s
Document Coordinator. This documentation should be submitted at the
same time as the electronic submission of the
survey.
If you have any questions
regarding this Information Memo please contact your Document
Coordinator.
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