[Federal Register: December 27, 2006 (Volume 71, Number 248)]
[Notices]
[Page 77847-77849]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27de06-120]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54966; File No. SR-NYSEArca-2006-89]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1
Thereto Relating to Exchange Fees and Charges
December 19, 2006.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'').\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 1, 2006, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items, I, II, and III below, which
Items have been substantially prepared by NYSE Arca. On December 15,
2006, the Exchange submitted Amendment No. 1 to the proposed rule
change. NYSE Arca has filed the proposal pursuant to Section
19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ which
renders the proposal effective upon filing with the Commission. The
Commission is publishing this notice to solicit comments on the
proposed rule change, as amended, from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NYSE Arca proposes to amend its Schedule of Fees and Charges For
Exchange Services (``Schedule'') to make a minor change to the Firm
Transaction Fee, eliminate certain obsolete fees, and make a non-
substantive formatting change to the Schedule. The text of the proposed
rule change is available on NYSE Arca's Web site at http://www.nysearca.com
, at the principal office of NYSE Arca, and at the
Commission's Public Reference Room.
[[Page 77848]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NYSE Arca included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of the these statements may be examined at the places specified in
Item IV below. NYSE Arca has prepared summaries, set forth in sections,
A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its Schedule in order to make a
minor change to the Firm Transaction Fee, eliminate certain obsolete
fees, and make a non-substantive formatting change.
Changes to the Firm Transaction Fee
NYSE Arca charges transaction fees associated with all option
contracts that are executed on the Exchange. The current Firm
Transaction Fee applies to OTP Firm \5\ proprietary trades that have a
customer of that firm on the contra side of the transaction. The
Exchange offers this rate as an incentive to OTP Firms to direct their
customer orders to NYSE Arca for execution. NYSE Arca applies the Firm
Transaction Fee to all trades between an OTP Firm and a customer of the
same OTP Firm, whenever a proprietary account of the firm is used. This
includes market makers that trade against orders that their affiliated
firm represents for customers. The Firm Transaction Fee became
applicable for certain market maker transactions upon the filing of a
proposed rule change with the commission.\6\ At that time the Market
Maker Transaction Fee was $0.26 per contract and the Firm Transaction
Fee was $0.15 per contract. As stated above, the cost savings was
offered as a incentive for Firms to send addition customer orders to
NYSE Arca. As part of a more recent proposed rule change,\7\ the Market
Maker Transaction Fee was lowered to $0.16 per contract, representing a
savings of almost 40% over the previous fee. Because of the reduction
in the Market Maker Transaction Fee, the additional savings afforded by
the application of the Firm Transaction Fee in certain instances, is no
longer significant. In order to simplify the billing process, all
market maker transactions will now be billed the same the fee of $0.16
per contract. While this change represents a modest $0.01 increase in
certain cases, the Exchange believes that it is more than compensated
for by the previous reduction in the Market Maker Transaction Fee.
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\5\ See NYSE Arca Rule (1(r).
\6\ See Securities Exchange Act Release No. 53165 (January 22,
2006), 71 FR 4955 (January 30, 2006) (SR-PCX-2005-136..
\7\ See Securities Exchange Act Release No. 54309 (August 11,
2006), 71 FR 48571 (August 21, 2006) (SR-NYSEArca-2006-25).
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The change to this fee will be reflected in the footnote associated
with the Firm Transaction Fee on the Schedule.
Elimination of Obsolete Fees
Due to changes in the market structure at NYSE Arca certain fees
have become outdate and obsolete. The Exchange proposes to eliminate
these fees from the Schedule.
Order Cancellation Fee--This fee was applied to orders
were cancelled on the PCX Plus automated trading system. This system is
no longer in use and accordingly the fee no longer applies.
Booth WorkStation Fee--This fee was assessed to OTP Firms
operating on the floor of the Exchange that used certain Exchange
provided workstations. These workstations have been replaced by firm
proprietary systems; therefore the fee no longer applies.
Printer Fee--Prior to the introduction of the OX
system,\8\ the Exchange provided printers that would generate order
tickets in certain cases where orders were not electronically executed
or represented. OX is a fully automated system and does not need to
print order tickets. The printers are no longer in use and therefore
the user fee no longer applies.
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\8\ See Securities Exchange Act Release No. 54238 (July 28,
2006), 71 FR 44758 (August 7, 2006)(SR-NYSEArca-2006-13).
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Market Maker Held Fees--Market Makers on the floor of the
Exchange now use proprietary trading systems to interface with the OX
system. The Market Maker Hand Held system is no longer in use on NYSE
Area; accordingly the fees associated with it no longer apply.
Administrative Changes
the Exchange also proposes a change to the formatting of the
Schedule. Presently, the Schedule shows a list of explanatory end notes
on the last page of the Schedule. With the new format, the end notes
will be moved to the appropriate page that shows the corresponding fee
or charge. Except where previously noted, the language in the reference
notes will remain the same, just the formatting of the reference note
will change. The Exchange believes that by having the reference notes
on the same page as the corresponding charge or fee, the Schedule will
be more user friendly and easier to read.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
provisions of Section 6 of the Act, \9\ in general, and with Section
6(b)(4) of the Act,\10\ in particular, in that the proposal provides
for the equitable allocation of reasonable dues, fees, and other
charges among its OTP Holders \11\ and OTP Firms trading option
contracts on NYSE Arca.
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\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(4).
\11\ See NYSE Arca rule 1(q).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
rule Change Received From Members, Participants or Others
Written comments on the proposed rule change were neither solicited
nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change is subject to Section
19(b)(3)(A)(ii) of the Act \12\ and subparagraph (f)(2) of Rule 19b-4
thereunder \13\ because it establishes or changes a due, fee, or other
charge applicable only to a member imposed by the self-regulatory
organization. Accordingly, the proposal is effective upon Commission
receipt of the filing. At any time within 60 days of the filing of the
proposed rule change, the Commission may summarily abrogate such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.\14\
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\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
\13\ 17 CFR 240.19bn-4(f)(2).
\14\ 15 U.S.C. 78s(b)(3)(C). For purposes of calculating the 60-
day period within which the Commission may summarily abrogate the
proposal, the Commission considers the period to commence on
December 15, 2006, the date on which the Exchange submitted
Amendment No. 1.
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[[Page 77849]]
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment from (http://www.sec.gov/rules/sro.shtml.
); or Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2006-89 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2006-89.
This file number should be included on the subject line if e-mail is
used. To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml.
Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room. Copies of the
filing also will be available for inspection and copying at the
principal office of NYSE Arca. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NYSEArca-2006-89 and should be submitted on or before
January 17, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 06-9864 Filed 12-26-06; 8:45 am]
BILLING CODE 8011-01-M