NYSE Regulation, Inc. announced today that the U.S. Securities and Exchange Commission (SEC) has approved amendments to NYSE Rule 607 that strengthen classification guidelines to ensure that persons who serve as public arbitrators will have no ties to the securities industry.
The amended rule expands the list of securities-industry entities by adding certain membership categories not previously specifically mentioned, and by adding a catch-all for any “other organization engaged in the securities business.” The amendments also provide that anyone associated with an organization that directly or indirectly is in a control relationship with a securities-industry entity—including banks and other financial institutions—may not be classified as a public arbitrator.
The amendments further state that no one with an immediate family member associated with a securities industry entity can be classified as a public arbitrator. The expanded definition of family member includes a spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and anyone who shares such person’s home.
“The new classification standards are an effort to enhance investor confidence in the NYSE arbitration forum by ensuring public arbitrators do not have any questionable ties to the securities industry,” said Daniel Beyda, chief administrative officer, NYSE Regulation. “This is one of several recent investor-friendly initiatives by NYSE Regulation.”
The amended rule becomes effective on December 13, 2006. From now until that time, NYSE will update and reclassify arbitrators as appropriate.
About NYSE Regulation, Inc.
NYSE Regulation, Inc., is a not-for-profit corporation dedicated to strengthening market integrity and investor protection. A subsidiary of NYSE Group, Inc., NYSE Regulation’s board of directors is comprised of a majority of directors unaffiliated with any other NYSE board. Each director must also be independent from member organizations and listed companies. As a result, NYSE Regulation is independent in its decision-making.
NYSE Regulation consists of four divisions: Market Surveillance, Member Firm Regulation, Enforcement and Listed Company Compliance, as well as a Risk Assessment Unit and Dispute Resolution/Arbitration. For more information, visit our website at www.nyseregulation.com .
