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Rule 407. Transactions—Employees of Members, Member Organizations and the Exchange

This rule is no longer applicable. NYSE Rule 407 has been superseded by FINRA Rule 3210. Please consult the appropriate FINRA Rule.

(a) No member or member organization shall, without the prior written consent of the employer, open a securities or commodities account or execute any transaction in which a member or employee associated with another member or member organization is directly or indirectly interested.

In connection with accounts or transactions of members and employees associated with another member or member organization, duplicate confirmations and account statements shall be sent promptly to the employer.
(b) No member (associated with a member or member organization) or employee associated with a member or member organization shall establish or maintain any securities or commodities account or enter into any securities transaction with respect to which such person has any financial interest or the power, directly or indirectly, to make investment decisions, at another member or member organization, or a domestic or foreign non-member broker-dealer, investment adviser, bank, other financial institution, or otherwise without the prior written consent of another person designated by the member or member organization under Rule 342(b)(1) to sign such consents and review such accounts.

Persons having accounts or transactions referred to above shall arrange for duplicate confirmations and statements (or their equivalents) relating to the foregoing to be sent to another person designated by the member or member organization under Rule 342(b)(1) to review such accounts and transactions. All such accounts and transactions periodically shall be reviewed by the member or member organization employer (see also Rule 342.21).

The Exchange may, upon written request, and where good cause is shown, waive any requirements of this Rule.
Amendment.
June 16, 1960, effective July 1, 1960;
July 16, 1970;
May 11, 1979;
May 27, 1992;
August 13, 2002 (01-44)
Amended by SR-FINRA-2008-036 eff. Nov. 11, 2008.
Amended by SR-FINRA-2008-027 eff. Dec. 15, 2008.

Selected Notice: 08-57, 08-64.

• • • Supplementary Material: --------------

.10 Reserved.
.11 The term "securities or commodities accounts" as used in the Rule 407(b) shall include, but not be limited to, limited or general partnership interests in investment partnerships.

Members and member organizations must develop and maintain written procedures for reviewing these accounts and transactions and shall assure that their associated persons are not improperly recommending or marketing these securities or products to others through members or member organizations.
.12 The requirement to send duplicate confirmations and statements shall not be applicable to transactions in unit investment trusts and variable contracts or redeemable securities of companies registered under the Investment Company Act of 1940, as amended, or to accounts which are limited to transactions in such securities, or to Monthly Investment Plan type accounts, unless the member or member organization employer requests receipt of duplicate confirmations and statements of such accounts.
.13 For the purposes of this Rule, the term "other financial institution" includes, but is not limited to, insurance companies, trust companies, credit unions and investment companies.
Amendment.
May 27, 1992;
October 27, 2000;
August 13, 2002 (01-44).
Amended by SR-FINRA-2008-036 eff. Nov. 11, 2008.
Amended by SR-FINRA-2008-027 eff. Dec. 15, 2008.

Selected Notice: 08-57, 08-64.

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