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  • Commissions (Rules 365-390)

    • Rule 375. Missing the Market

      This rule is no longer applicable.

      A member or member organization who has accepted an order for execution and who, by reason of neglect to execute the order or otherwise, takes or supplies for his or its own account, the securities named therein is not acting as a broker and shall not charge a commission, without the knowledge and consent of the customer.

    • Rule 382. Carrying Agreements

      This rule is no longer applicable.

      (a) All agreements between a member or member organization and another NYSE member or member organization or any foreign or domestic non-member organization, relating to the carrying of customer accounts on an omnibus or fully disclosed basis, or any change in any such agreements, shall be submitted to and approved by the Exchange prior to becoming effective. The carrying member organization shall be responsible for submission of the agreement to the Exchange; except, that where a member or member organization introduces accounts to a non-member organization, the member or member organization shall be responsible for the submission of the agreement.
      (b) Each agreement in which accounts are to be carried on a fully disclosed basis shall specifically identify and allocate the respective functions and responsibilities of the introducing and carrying organizations, which agreement shall, at a minimum, address each of the following functions:
      (1) opening, approving and monitoring of accounts
      (2) extension of credit
      (3) maintenance of books and records
      (4) receipt and delivery of funds and securities
      (5) safeguarding of funds and securities
      (6) confirmations and statements
      (7) acceptance of orders and execution of transactions.
      (c) Each customer whose account is introduced on a fully disclosed basis shall be notified in writing upon the opening of his account of the existence of the agreement and of the relationship between the introducing and carrying organization.
      (d) In order for the introducing organization to carry out its functions and responsibilities pursuant to the agreement, each carrying organization must furnish promptly any written customer complaint received by the carrying organization regarding the introducing organization or its associated persons relating to functions and responsibilities allocated to the introducing organization pursuant to the agreement, directly to: (1) the introducing organization; and (2) the introducing organization's Designated Examining Authority (or, if none, to its appropriate regulatory agency or authority). The carrying agreement must specifically direct and authorize the carrying organization to do so.

      The carrying organization must also notify the customer, in writing, that it has received the complaint, and that the complaint has been furnished to the introducing organization and to the introducing organization's Designated Examining Authority (or, if none, to its appropriate regulatory agency or authority).
      (e)
      (1) The carrying organization, at the commencement of the agreement and annually thereafter, must furnish to each of its introducing organizations a list of all reports (i.e., exception and other types of reports) which it offers to the introducing organization to assist the introducing organization to supervise and monitor its customer accounts in order for the introducing organization to carry out its functions and responsibilities pursuant to the agreement. The introducing organization must notify promptly the carrying organization, in writing, of those specific reports offered by the carrying organization that it requires to supervise and monitor its customer accounts.
      (2) Copies of the specific reports requested by and/or supplied to the introducing organization must be retained and preserved by the carrying organization as part of its books and records pursuant to Rule 440.
      (3) Annually, within 30 days of July 1 of each year, the carrying organization must give written notice to the introducing organization's chief executive and compliance officers, indicating as of the date of such notice, the list of reports offered to the introducing organization pursuant to paragraph (e)(1) of this rule, and specify those reports that were actually requested by and/or supplied to the introducing organization as of such date. A copy of this written notice must at the same time be provided to the introducing organization's Designated Examining Authority (or if none, to its appropriate regulatory agency or authority).
      (f) The agreement may permit the introducing organization to issue negotiable instruments directly to its customers, using instruments for which the carrying organization is the maker or drawer, provided that the introducing organization represents to the carrying organization in writing that it maintains, and shall enforce, supervisory procedures with respect to the issuance of such instruments that are satisfactory to the carrying organization.

      (See also Rules 342, 401, and 416)

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

      .10 Carrying organizations may satisfy the requirements of paragraph (e)(2) above by furnishing, upon request, of the introducing organization's Designated Examining Authority (or if none, to its appropriated regulatory agency or authority), (1) a recreated copy of the report originally produced; or (2) the format of the report and the applicable data elements contained in the original report.
      .20 The Exchange, at its discretion and upon a showing of good cause, may exclude certain carrying organizations from the requirements of paragraphs (d) and (e) above, in instances where the introducing organization is affiliated entity of the carrying organization.
      Adopted.
      December 19, 1968.

      Amendments.
      April 3, 1975; effective May 1, 1975.
      February 19, 1982.
      June 2, 1999.
      March 30, 2001.

    • Rule 387. COD Orders

      This rule is no longer applicable. Incorporated NYSE Rule 387 has been superseded by FINRA Rule 11860. Please consult the appropriate FINRA Rule.

      (a) No member or member organization shall accept an order from a customer pursuant to an arrangement whereby payment for securities purchased or delivery of securities sold is to be made to or by an agent of the customer unless all of the following procedures are followed:
      (1) The member or member organization shall have received from the customer prior to or at the time of accepting the order, the name and address of the agent and the name and account number of the customer on file with the agent.
      (2) Each order accepted from the customer pursuant to such an arrangement has noted thereon the fact that it is a payment on delivery (POD) or collect on delivery (COD) transaction.
      (3) The member or member organization delivers to the customer a confirmation, or all relevant data customarily contained in a confirmation with respect to the execution of the order, in whole or in part, not later than the close of business on the next business day after any such execution, and
      (4) The member organization has obtained an agreement from the customer that the customer will furnish his agent instructions with respect to the receipt or delivery of the securities involved in the transaction promptly upon receipt by the customer of each confirmation, or the relevant data as to each execution, relating to such order (even though such execution represents the purchase or sale of only a part of the order), and that in any event the customer will assure that such instructions are delivered to his agent no later than:
      (i) in the case of a purchase by the customer where the agent is to receive the securities against payment (COD), the close of business on the second business day after the date of execution of the trade as to which the particular confirmation relates; or
      (ii) in the case of a sale by the customer where the agent is to deliver the securities against payment (POD), the close of business on the first business day after the date of execution of the trade as to which the particular confirmation relates.
      (5) The facilities of a Clearing Agency shall be utilized for the book-entry settlement of all depository eligible transactions. The facilities of either a Clearing Agency or a Qualified Vendor shall be utilized for the electronic confirmation and affirmation of all depository eligible transactions.

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

      .10 Transactions that are to be settled outside of the United States shall be exempt from the provisions of paragraph (a)(5) of this Rule.
      .30 For the purposes of this rule, a "Clearing Agency" shall mean a Clearing Agency as defined in Section 3(a)(23) of the Securities Exchange Act of 1934, that is registered with the Securities and Exchange Commission ("Commission") pursuant to Section 17A(b)(2) of the Act or has obtained from the Commission an exemption from registration granted specifically to allow the Clearing Agency to provide confirmation and affirmation services.
      .40 For the purposes of this rule, "depository eligible transactions" shall mean transactions in those securities for which confirmation, affirmation, and book entry settlement can be performed through the facilities of a Clearing Agency as defined in Rule 387.30.
      .50 "Qualified Vendor" shall mean a vendor of electronic confirmation and affirmation services that:
      (A) shall, for each transaction subject to this rule; (i) deliver a trade record to a Clearing Agency in the Clearing Agency's format; (ii) obtain a control number for the trade record from the Clearing Agency; (iii) cross-reference the control number to the confirmation and subsequent affirmation of the trade; and (iv) include the control number when delivering the affirmation of the trade to the Clearing Agency;
      (B) certifies to its customers that: (i) with respect to its electronic trade confirmation/affirmation system, that it has a capacity requirements, evaluation, and monitoring process that allows the vendor to formulate current and anticipated estimated capacity requirements; (ii) that its electronic trade confirmation/affirmation system has sufficient capacity to process the specified volume of data that it reasonably anticipates to be entered into its electronic trade confirmation/affirmation service during the upcoming year; (iii) that its electronic trade confirmation/affirmation system has formal contingency procedures, that the entity has followed a formal process of reviewing the likelihood of contingency occurrences, and that the contingency protocols are reviewed and updated on a regular basis; (iv) that its electronic trade confirmation/affirmation system has a process for preventing, detecting, and controlling any potential or actual systems integrity failures, and its procedures designed to protect against security breaches are followed; and (v) that its current assets exceed its current liabilities by at least five hundred thousand dollars;
      (C) has submitted and shall continue to submit on an annual basis, an Auditor's Report to the Commission staff which is not deemed unacceptable by the Commission. An Auditor's Report will be deemed unacceptable if it contains any findings of material weakness;
      (D) notifies the Commission staff immediately in writing of any changes to its systems that significantly affect or have the potential to significantly affect its electronic trade confirmation/affirmation systems including, without limitation, changes that (i) affect or potentially affect the capacity or security of its electronic trade confirmation/affirmation system; (ii) rely on new or substantially different technology; or (iii) provide a new service to the Qualified Vendor's electronic trade confirmation/affirmation system;
      (E) immediately notifies the Commission staff in writing if it intends to cease providing services;
      (F) provides the Exchange with copies of any submissions to the Commission staff made pursuant to .50(B), (C), (D) and (E) of this rule within ten business days; and
      (G) supplies supplemental information regarding their electronic trade confirmation/affirmation services as requested by the Exchange or the Commission staff.
      .60 "Auditor's Report" shall mean a written report which is prepared by competent, independent, external audit personnel in accordance with the standards of the American Institute of Certified Public Accountants and the Information Systems Audit and Control Association and which (i) verifies the certifications contained in .50(B) above; (ii) contains a risk analysis of all aspects of the entity's information technology systems including, without limitation, computer operations, telecommunications, data security, systems development, capacity planning and testing, and contingency planning and testing; and (iii) contains the written response of the entity's management to the information provided pursuant to (i) and (ii) above.
      Adopted.
      Effective June 7, 1971.

      Amendments.
      January 1, 1983.
      February 11, 1988.
      March 17, 1995; effective June 7, 1995.
      May 7, 1999.
      October 30, 2001.