[Federal Register: September 21, 2006 (Volume 71, Number 183)]
[Notices]
[Page 55257-55258]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21se06-91]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54430; File No. SR-NYSEArca-2006-20]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Order Granting Accelerated Approval to Amendment No. 4 to a
Proposed Rule Change Relating to the Exchange's Schedule of Fees and
Charges
September 12, 2006.
I. Introduction
On May 17, 2006, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'')
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ the proposed rule change to
amend the Trade Related Charges portion of its Schedule of Fees and
Charges (``Schedule''). On May 26, 2006, the Exchange filed Amendment
No. 1 to the proposed rule change. On June 30, 2006, the Exchange filed
Amendment No. 2 to the proposed rule change. On July 7, 2006, the
Exchange filed Amendment No. 3 to the proposed rule change.\3\ The
proposed rule change, as amended, was published for comment in the
Federal Register on July 20, 2006.\4\ Two comment letters were
submitted in connection with this filing.\5\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Form 19b-4 dated July 7, 2006 (``Amendment No. 3'').
Amendment No. 3 replaced and superseded the original filing and
Amendments No. 1 and 2 in their entirety.
\4\ See Securities Exchange Act Release No. 54130 (July 11,
2006), 71 FR 41305.
\5\ See letter from Arthur J. Gross, Arthur J. Gross SP, dated
August 9, 2006, and letter from Gennaro J. Lettera, dated August 9,
2006. The Exchange believes that these commenters intended to
address a separate proposed rule change, SR-NYSE-2006-46, not the
instant proposed rule change. See e-mail from Janet Angstadt, Acting
General Counsel, NYSE Arca, to Timothy Fox, Special Counsel,
Division of Market Regulation, Commission, dated August 16, 2006.
The Commission believes that the commenters' concerns do not relate
to the instant proposed rule change and, as such, these letters are
not addressed in this order.
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On August 31, 2006, the Exchange filed Amendment No. 4.\6\ This
order grants accelerated approval of Amendment No. 4, and solicits
comments from interested persons on Amendment No. 4.
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\6\ Amendment No. 4 was filed to reconcile the original filing,
as amended, with the subsequent immediately effective rule filing,
as discussed infra note 9 and accompanying text. Amendment No. 4
replaces and supersedes the original filing and subsequent
amendments in their entirety.
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I. Description of the Proposal
A. Fees for Manually Executed Linkage Orders
NYSE Arca proposes to combine two existing fees associated with
certain Linkage Orders.\7\ Presently, the Exchange assesses on Linkage
Orders a $0.21 transaction fee and a $0.05 comparison fee.\8\ To
simplify the Schedule, the Exchange proposes combining these fees into
one transaction fee of $0.26 for Linkage Orders executed manually. This
fee is equal to the fee for manually executed orders from broker-
dealers.
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\7\ ``Linkage Orders'' are immediate or cancel orders containing
certain information that are routed through the Intermarket Linkage
System (``Linkage''). See Section 2(16) of the Plan for the Purpose
of Creating and Operating an Intermarket Option Linkage (``Linkage
Plan''). As used in this approval order, the term, ``Linkage
Orders,'' refers only to Principal Acting as Agent Orders and
Principal Orders. See Sections 2(16)(a) and 2(16)(b) of the Linkage
Plan.
\8\ These fees are applicable through an Exchange Pilot Program
due to expire on July 31, 2007. See Securities Exchange Act Release
No. 54230 (July 27, 2006), 71 FR 44757 (August 7, 2006) (SR-
NYSEArca-2006-41).
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B. Fees for Electronically Executed Linkage Orders
Under the current NYSE Arca Schedule, electronically executed
orders from broker-dealers are charged $0.50 per contract (``BD
Electronic Transaction Fee''). The BD Electronic Transaction Fee was
recently revised to combine a previously assessed transaction fee of
$0.26 and a BD Surcharge of $0.25.\9\ The current $0.50 BD Electronic
Transaction Fee represents a $0.01 reduction in the total fee for
electronic executions of orders from broker-dealers. In Amendment No.
4, the Exchange proposes to modify its Schedule to make clear that
[[Page 55258]]
electronically executed Linkage Orders also will be charged $0.50 per
contract.
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\9\ 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 Exchange acknowledges that the Exchange's previous version of
its Schedule did not reflect that the BD Surcharge was imposed on
electronically executed Linkage Orders.\10\ In Amendment No. 4, the
Exchange proposes to modify the Schedule to make clear that the BD
Surcharge will be included as a component of the $0.50 fee assessed for
electronically executed Linkage Orders.
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\10\ The Schedule set forth the Transaction and Comparison fees
assessed on Linkage Orders.
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III. Discussion and Commission Findings
The Commission has reviewed carefully the proposed rule change, as
amended, and finds that it is consistent with the requirements of the
Act and the rules and regulations thereunder applicable to a national
securities exchange.\11\ In particular, the Commission believes that
the proposal is consistent with Section 6(b)(4) of the Act,\12\ which
requires that the rules of an exchange provide an equitable allocation
of reasonable dues, fees and other charges among its members and other
persons using its facilities. Under the current NYSE Arca Schedule,
manually executed BD orders are charged $0.26 per contract and
electronically executed orders from broker-dealers are charged $0.50
per contract. The Exchange proposed that manually executed Linkage
Orders be charged $0.26 per contract and electronically executed
Linkage Orders be charged $0.50 per contract. Accordingly, the
Commission believes that the Exchange's proposed Schedule clearly sets
forth the fees imposed on Linkage Orders.
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\11\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\12\ 15 U.S.C. 78f(b)(4).
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As discussed above, the Exchange acknowledges, in Amendment No. 4,
that prior versions of its Schedule did not represent that the $0.25 BD
Surcharge was applied to electronically executed Linkage Orders.
Because the Exchange assessed the BD Surcharge on Linkage Orders prior
to this approval and, therefore, without authority, parties assessed
the BD Surcharge for Linkage Orders prior to the approval of this
proposed rule change may seek reimbursement.
The Commission finds good cause for approving proposed Amendment
No. 4 before the 30th day after the date of publication of notice of
filing thereof in the Federal Register pursuant to Section 19(b)(2) of
the Act.\13\ The Exchange filed Amendment No. 4 to reconcile the
proposed rules in the original filing, as amended, with the Exchange's
current rules, which reflect an immediately effective proposed rule
change filed after this proposed rule change was published for
comment.\14\ The Commission believes that in Amendment No. 4, the
Exchange proposes no significant changes to the fees proposed in the
original filing. Therefore, the Commission finds good cause exists to
accelerate approval of Amendment No. 4, pursuant to Section 19(b)(2) of
the Act.\15\
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\13\ 15 U.S.C. 78s(b)(2).
\14\ See supra note 9.
\15\ 15 U.S.C. 78s(b)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning Amendment No. 4, including whether Amendment No. 4
is consistent with the Act. Comments may be submitted by any of the
following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2006-20 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to Amendment No. 4 to SR-NYSEArca-
2006-20. 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 such
filing also will be available for inspection and copying at the
principal offices of the Exchange. 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
Amendment No. 4 to SR-NYSEArca-2006-20 and should be submitted on or
before October 12, 2006.
V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\16\ that Amendment No. 4 to the proposed rule change (SR-NYSEArca-
2006-20) be, and hereby is, approved on an accelerated basis.
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\16\ 15 U.S.C. 78s(b)(2).
\17\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\17\
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 06-7842 Filed 9-20-06; 8:45 am]
BILLING CODE 8010-01-P