SEC Division of Trading and Markets no-action letter: NYSE Regulation, Inc.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON. D.C. 20549
DIVISION OF
MARKET REGULATION August 1,2006
Mr. Michael Rufino
Senior Vice President, Member Firm Regulation
20 Broad St.
New York, NY 10005
Dear Mr. Rufino:
In your letter dated July 26,2006, on behalf of NYSE Regulation, Inc. ("NYSE), you seek interpretive guidance with regard to the definition of statutory disqualification, as contained in Section 3(a)(39) of the Securities Exchange Act of 1934 ("Exchange Act") (which incorporates by reference Sections 15(b)(4)@), (E), and (H), among others). You also seek interpretive guidance in connection with Exchange Act Rule 19h-l(a). In addition, you seek assurance that the staff of the Division of Market Regulation ("Staff') would not recommend enforcement action to the Commission under Exchange Act Section 6(c)(2) or Rule 19h-l(a) if the NYSE does not file a notice with the Commission for any person subject to a statutory disqualification under Section 3(a)(39) ("subject person") whom the NYSE is proposing to admit to or continue in membership or association with a member organization,' under the circumstances described more fully below. A. Interpretive Advice

1. Time-limited Bars or License Revocations
   You have requested guidance on whether a person subject to a bar or license revocation, for example, as described in Section 3(a)(39)(A) or Section 3(a)(39)(F) (through incorporation by reference to Section 15(b)(4)(H)(i)), that is time-limited and that does not require application for reentry or have a continuing effect after application for reentry has been granted, would be subject to a statutory disqualification under Section 3(a)(39) for the duration of the bar or license revocation, or for a longer period of time. It is the Staffs view A person subject to a statutory disqualification as defined in Section 3(a)(39) is not necessarily precluded from participating in the securities industry. However, when such a person seeks admission to or continuance in membership or association with a member of a self-regulatory organization ("SRO"), the Commission and the SROs have the opportunity to give special review to such person and to restrict or prevent entry into, or continuance in, the business where appropriate in the public interest and for the protection of investors. &g Senate Comm. on Banking, Housing, and Urban Affairs, The Securities Acts Amendments of 1989, S. Rep. No. 101-155, at 39 (1989); Exchange Act Rel. No. 13726 (Jul. 8, 1977) (adopting Rule 19h-1).