Rule 322. Guarantees by, or Flow Through Benefits for Members or Member Organizations
This rule is no longer applicable.
Prior written notice shall be given the Exchange whenever any member or any member organization:
(a) guarantees, endorses or assumes, directly or indirectly, the obligations or liabilities of another person; or
(b) receives flow through capital benefits in accordance with Appendix C of Rule 15c3-1 under the Securities Exchange Act of 1934.
• • • Supplementary Material: --------------
.10 Financial and Operational Impact
The written notice required by this rule shall be given to the Exchange at least 10 business days prior to entering into such arrangement or relationship with another person and shall include the address and general nature of business conducted by such person, a description of the relationship or arrangement between the parties, details regarding the capitalization of such person (including the percentage of ownership or profits by the member or member organization), as well as the actual and potential effect of the arrangement or relationship on the member or member organization's capital (including net capital) and operations and such other information as the Exchange may require.
The written notice required by this rule shall be given to the Exchange at least 10 business days prior to entering into such arrangement or relationship with another person and shall include the address and general nature of business conducted by such person, a description of the relationship or arrangement between the parties, details regarding the capitalization of such person (including the percentage of ownership or profits by the member or member organization), as well as the actual and potential effect of the arrangement or relationship on the member or member organization's capital (including net capital) and operations and such other information as the Exchange may require.
.11 Dealings with member or member organization
A member or member organization may at any time be required to provide the Exchange with information with respect to the arrangement, relationship and dealings with a person referred to in this rule.
A member or member organization may at any time be required to provide the Exchange with information with respect to the arrangement, relationship and dealings with a person referred to in this rule.
.12 Books and records
No member or member organization shall enter into an arrangement described in this rule unless it has the authority to make available promptly the books and records of such person for inspection by the Exchange in the United States. The books and records of such person shall be kept separately from those of the member or member organization.
No member or member organization shall enter into an arrangement described in this rule unless it has the authority to make available promptly the books and records of such person for inspection by the Exchange in the United States. The books and records of such person shall be kept separately from those of the member or member organization.
.13 FOCUS Reporting Requirements
For persons referred to in this rule that are registered broker-dealers, the member organization shall furnish to the Exchange copies of such person's FOCUS Reports simultaneous with their being filed with the person's designated examining authority. For persons referred to in this rule that are not registered broker-dealers, the Exchange requires, in lieu of FOCUS, submission of financial and operational statements, in such format and at such time periods as may be required by the Exchange, sufficient to gauge the capital and operational effects of the arrangement or relationship. See also Rule 416.10.
For persons referred to in this rule that are registered broker-dealers, the member organization shall furnish to the Exchange copies of such person's FOCUS Reports simultaneous with their being filed with the person's designated examining authority. For persons referred to in this rule that are not registered broker-dealers, the Exchange requires, in lieu of FOCUS, submission of financial and operational statements, in such format and at such time periods as may be required by the Exchange, sufficient to gauge the capital and operational effects of the arrangement or relationship. See also Rule 416.10.
.15 Routine guarantees
Guarantees executed routinely in the normal course of business such as signature guarantees, endorsement of securities and the writing of options, are not subject to the requirements of this rule provided that, in regard to the guarantee of the writing of options, the transaction is appropriately recorded on the member's or member organization's books and records in accordance with Securities Exchange Act Rule 17a-3(a)(10) and is reflected in its capital computation.
Guarantees executed routinely in the normal course of business such as signature guarantees, endorsement of securities and the writing of options, are not subject to the requirements of this rule provided that, in regard to the guarantee of the writing of options, the transaction is appropriately recorded on the member's or member organization's books and records in accordance with Securities Exchange Act Rule 17a-3(a)(10) and is reflected in its capital computation.
.16 Severance of connection
The Exchange may at any time require that the member or member organization and the partners or stockholders thereof sever all connections with a person referred to in this rule including the disposition of all securities and other interests therein, or such amount thereof as determined by the Exchange. Concurrent with or at any time after directing such severance, the Exchange may require the member organization to change its name if the Exchange finds that the name of the former associated organization may be confused with the name of such member organization.
(See also Rule 321)
The Exchange may at any time require that the member or member organization and the partners or stockholders thereof sever all connections with a person referred to in this rule including the disposition of all securities and other interests therein, or such amount thereof as determined by the Exchange. Concurrent with or at any time after directing such severance, the Exchange may require the member organization to change its name if the Exchange finds that the name of the former associated organization may be confused with the name of such member organization.
(See also Rule 321)
| New Rule 322 adopted August 31, 1993. February 27, 2006, effective March 8, 2006 (NYSE-2005-77). |