27160 Federal Register / Vol. 72, No. 92 / Monday, May 14, 2007 / Notices 

7 15 U.S.C. 78s(b)(3)(A)(ii). 

8 17 CFR 240.19, 240.19b–4(f)(2). 

9 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Amendment No. 1 replaces and supersedes the 

original filing in its entirety. 

4Amendment No. 2 conforms a single category in 

the annual fee chart for Derivative Securities 

Products in the purpose section with the Fee 

Schedule; and amends the purpose section to reflect 

that an additional issuer listed a series of 

Investment Company Units on the Exchange on 

March 28, 2007. 

among its members and other persons 

using its facilities. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

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 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing proposed rule change 

has become effective upon filing with 

the Commission pursuant to Section 

19(b)(3)(A)(ii) of the Act 7 and Rule 19b–

4(f)(2) thereunder,8 in that the proposed 

rule change establishes or changes a 

member due, fee, or other charge 

imposed by the self-regulatory 

organization. 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. 

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 form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

No. SR–ISE–2007–24 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–ISE–2007–24. 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 office of the ISE. 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–ISE–2007–24 and should be 

submitted on or before June 4, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–9178 Filed 5–11–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55720; File No. SR–

NYSEArca–2007–22] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change and Amendment Nos. 1 

and 2 Thereto Relating to Listing and 

Annual Fees for Derivative Securities 

Products and Closed-End Funds 

May 7, 2007. 

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 February 

27, 2007, NYSE Arca, Inc. (‘‘NYSE 

Arca’’ or the ‘‘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 May 1, 2007, NYSEArca filed 

Amendment No. 1 to the proposed rule 

change.3 On May 3, 2007, NYSEArca 

filed Amendment No. 2 to the proposed 

rule change.4 The Commission is 

publishing this notice to solicit 

comments on the proposed rule change, 

as amended, from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

NYSE Arca, through its wholly owned 

subsidiary NYSE Arca Equities, Inc. 

(‘‘NYSE Arca Equities’’), is proposing to 

amend its Schedule of Fees and Charges 

(‘‘Fee Schedule’’) to revise the listing 

fees applicable to Derivative Securities 

Products, Closed-End Funds and 

Structured Products listed on NYSE 

Arca, L.L.C. (‘‘NYSE Arca 

Marketplace’’), the equities facility of 

NYSE Arca Equities. The Exchange also 

proposes related modifications to the 

Fee Schedule. The text of the proposed 

rule change is available at NYSE Arca, 

the Commission’s Public Reference 

Room, and http://www.nysearca.com. 

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 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 

NYSE Arca has determined to revise 

the listing fees specifically applicable to 

Derivative Securities Products (or 


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5For purposes of this proposal, Derivative 

Securities Products include securities qualified for 

listing and trading on NYSE Arca under the 

following NYSE Arca Equities Rules: Rule 5.2(j)(3) 

(Investment Company Units), 5.2(j)(5) (Equity Gold 

Shares), 8.100 Portfolio Depositary Receipts), 8.200 

(Trust Issued Receipts), 8.201 (Commodity-Based 

Trust Shares), 8.202 (Currency Trust Shares), 8.300 

(Partnership Units), and 8.400 (Paired Trust 

Securities), as these rules may be amended from 

time to time. 

Closed-End Funds are a type of investment 

company registered under the Investment Company 

Act of 1940 that offer a fixed number of shares. 

Their assets are professionally managed in 

accordance with the Closed-End Fund’s investment 

objectives and policies, and may be invested in 

stocks, fixed income securities or a combination of 

both. 

6Footnote 1 to the Exchange’s current Fee 

Schedule states that Fund ‘‘families’’ are those with 

a common investment advisor or investment 

advisors, which are ‘‘affiliated persons’’ as defined 

in the securities laws. 

7These fees are substantially identical to the fees 

charged by the NYSE for Closed-End Funds. See 

NYSE Listed Company Manual, Section 902.04. 

‘‘Products’’), Closed-End Funds and 

Structured Products,5 as follows: 

(1) Eliminate the Application 

Processing Fee for Derivative Securities 

Products, Closed-End Funds and 

Structured Products; 

(2) Impose an original listing fee of 

$5,000 per Derivative Securities 

Product; 

(3) Reduce, for some Derivative 

Securities Products, the Annual Fee; 

and 

(4) Establish a listing and annual fee 

schedule for Closed-End Funds based 

on New York Stock Exchange LLC 

(‘‘NYSE’’) fees for Closed-End Funds as 

set forth in Section 902.04 of the NYSE 

Listed Company Manual. 

This filing also proposes a number of 

related modifications to the Fee 

Schedule. The proposed revisions will 

apply as of January 1, 2007 (with the 

exception of listing fees for Closed-End 

Funds). 

Summary of Current and Proposed Fees 

1. Application Processing Fee 

Currently, NYSE Arca levies a nonrefundable application processing fee of 

$500 for all applications to list ‘‘Funds’’

(which term currently encompasses 

Exchange-Traded Funds and ClosedEnd Funds) submitted at the same time 

by a Fund issuer or ‘‘family’’ regardless 

of the number of Funds to be listed. 

This fee is currently credited towards 

the applicable initial Listing Fee if the 

application is approved, or if the Fund 

issuer or ‘‘family’’ is not subject to an 

initial Listing Fee, towards the 

applicable Annual Fee. With this filing, 

NYSE Arca proposes to eliminate such 

Application Processing Fee and will 

impose no such fee for Derivative 

Securities Products, Closed-End Funds 

or Structured Products. 

2. Listing Fee 

Currently, NYSE Arca charges a onetime Listing Fee of $20,000 for the first 

Fund listed by a Fund issuer or Fund 

‘‘family,’’ but does not currently charge 

a Listing Fee for subsequent additional 

listings of Funds from the same Fund 

issuer or ‘‘family,’’ regardless of whether 

one or more previously listed Funds 

remains listed on NYSE Arca.6 Further, 

this Listing Fee applies regardless of 

whether the Fund(s) lists in conjunction 

with an initial public offering, transfers 

from another marketplace, or 

concurrently lists or is already listed on 

another exchange or market. 

a. Derivative Securities Products 

With this filing, NYSE Arca proposes 

separate Listing Fees for Derivative 

Securities Products and Closed-End 

Funds. For Derivative Securities 

Products, NYSE Arca Equities proposes 

a Listing Fee fixed at $5,000 per 

Derivative Securities Product. The 

proposed Listing Fee applies regardless 

of whether the Product lists in 

conjunction with an initial public 

offering, transfers from another 

marketplace, or concurrently lists or is 

already listed on another exchange or 

market. 

b. Closed-End Funds 7

When a Closed-End Fund lists a class 

of common stock, or first lists a class of 

preferred stock in a case where common 

stock is not already listed, NYSE Arca 

Equities proposes Listing Fees as 

follows: 

Number of securities issued Total listing 

fee 

Up to and including 10 million .. $20,000 

Over 10 million up to and including 20 million .................. 30,000 

Over 20 million ......................... 40,000 

(1) Listing Additional Securities by a 

Closed-End Fund 

In the case of the following types of 

additional listings, Listing Fees are 

calculated on a per share basis for each 

class according to the Listing Fee 

schedule below: 

• At the time it first lists, a ClosedEnd Fund lists one or more classes of 

preferred stock or warrants in addition 

to a primary class of common stock or 

preferred stock; 

• Once listed, a Closed-End Fund 

lists additional shares of a class of 

previously listed securities; or 

• Once listed, a Closed-End Fund 

lists a new class of preferred stock or 

warrants. 

To the extent that an issuer lists more 

than one class of the same type of 

security, the class with the greatest 

number of shares issued will be deemed 

the primary class. 

When determining Listing Fees, 

calculations are made at each level of 

the schedule up to the last level 

applicable to the number of securities 

being listed. The total Listing Fee equals 

the sum of the amounts calculated at 

each level of the schedule. (Examples 

are provided below, under ‘‘Calculating 

Listing Fees.’’) 

Number of securities issued Fee per 

share 

Up to and including 2 million .. $0 .01475 

Over 2 million up to and including 4 million .................. 0 .0074 

Over 4 million up to and including 300 million .............. 0 .0035 

Over 300 million ..................... 0 .0019 

(2) Limitations on Closed-End Fund 

Listing Fees 

Fund Family Discount. If two or more 

closed-end funds from the same fund 

family list at approximately the same 

time, the Exchange will cap the 

collective Listing Fee for those funds at 

$75,000. The Exchange will consider 

funds from the same fund family to be 

listing at approximately the same time 

if an issuer provides notice that such 

funds will be listed as part of the same 

transaction. A fund family consists of 

closed-end funds with a common 

investment adviser or investment 

advisers who are ‘‘affiliated persons’’ as 

defined in Section 2(a)(3) of the 

Investment Company Act of 1940, as 

amended. 

Limitation on Listing Fees for 

Additional Class of Common Shares. A 

Closed-End Fund that applies to list a 

new class of common shares in addition 

to its primary class will be charged a 

fixed Listing Fee of $5,000 in lieu of the 

per share schedule. 

Minimum Listing Fee for Subsequent 

Listing of Additional Securities. NYSE 

Arca will impose a minimum 

application fee for a subsequent listing 

of additional securities of $2,500. When 

listing additional securities, an issuer is 

billed Listing Fees in an amount equal 

to the greater of the $2,500 minimum 

supplemental listing application fee and 

the fee calculated on a per share basis. 

This applies to the listing of additional 

shares of an already listed equity 

security or to the listing of an additional 

class of equity security (other than a 

new class of common shares). 

Fee for Certain Changes. NYSE Arca 

will charge a $2,500 fee for changes that 

involve modifications to Exchange 


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27162 Federal Register / Vol. 72, No. 92 / Monday, May 14, 2007 / Notices 

records, for example, changes of name, 

par value, title of security or 

designation. 

Application Fee for Technical 

Original Listings and Reverse Stock 

Splits. NYSE Arca will apply a $5,000 

application fee for a Technical Original 

Listing if the change in the issuer’s 

status is technical in nature and the 

shareholders of the original issuer 

receive or retain a share-for-share 

interest in the new issuer without any 

change in their equity position or rights. 

For example, a change in a Closed-End 

Fund’s state of incorporation or a 

reincorporation or formation of a 

holding company that replaces a listed 

Closed-End Fund would be considered 

a Technical Original Listing. The $5,000 

application fee also will apply to a 

reverse stock split. 

Maximum Listing Fee for Stock Splits 

and Stock Dividends. Listing fees on 

shares issued in conjunction with stock 

splits and stock dividends will be 

capped at $150,000 per split or 

issuance. 

Maximum Listing Fee for Issuance of 

Additional Shares of a Listed Class. 

Listing Fees on the issuance of 

additional shares of an already listed 

class of stock are capped at $500,000 per 

transaction, for example, in the case 

where shares are issued in conjunction 

with a merger or consolidation where a 

listed company survives, subsequent 

public offerings of a listed security and 

conversions of convertible securities 

into a listed security. 

Discounts on Listing Fees. In the case 

of transactions such as a consolidation 

between two or more listed issuers that 

result in the formation of a new issuer, 

or a merger or consolidation between a 

listed issuer and an unlisted issuer that 

results in the unlisted issuer surviving 

or the creation of a new issuer, where 

at the conclusion of the transaction a 

previously unlisted issuer immediately 

lists, Listing Fees for that new issuer are 

calculated at a rate of 25% of total 

Listing Fees for each class of securities 

being listed (to the extent that the total 

calculated listing fee for a class of 

common stock would be greater than 

$250,000, the calculation would be 25% 

of the $250,000 maximum for a new 

listing of common stock). 

No discount will be applied where a 

listed issuer survives the merger or 

consolidation, or in the case of a 

backdoor listing (i.e., resulting from a 

merger, acquisition or consolidation 

which has the effect of circumventing 

the standards for original listing). 

Listing Fees for Pre-emptive Rights. 

Preemptive rights representing equity 

securities are not subject to a separate 

Listing Fee. As of the date that 

preemptive rights are exercised, Listing 

Fees will accrue on the securities issued 

and the issuer will be billed for those 

Listing Fees at the beginning of the 

following year. 

(3) Calculating Listing Fees 

Treasury stock, restricted stock and 

shares issued in conjunction with the 

exercise of an over-allotment option, if 

applicable, are included in the number 

of shares a Closed-End Fund is billed for 

at the time a security is first listed. 

The following are examples of how 

Listing Fees would be calculated by a 

closed-end fund in the case of an 

original listing and a subsequent 

additional issuance of common stock: 

Example A: A closed-end fund listing 50 

million common shares in the context of an 

initial public offering or transfer from 

another market would pay total Listing Fees 

of $40,000. 

Example B: The same closed-end fund 

subsequently applies to list an additional 5 

million shares of common stock that are 

immediately issued. The closed-end fund 

will pay total Listing Fees of $17,500 for the 

subsequent listing. Since the closed-end fund 

already has 50 million shares outstanding, 

the Listing Fee for the additional 5 million 

shares is calculated at a rate of $0.0035 per 

share. 

c. Structured Products 

The Fee Schedule is being amended 

to specify that the $20,000 Listing Fee, 

in addition to Initial Public Offerings, 

applies to an initial listing (e.g., a listing 

transfer to NYSE Arca from another 

exchange). 

3. Annual Fees 

Currently, NYSE Arca charges Annual 

Fees specifically for Exchange-Traded 

Funds and Closed-End Funds based on 

the aggregate total shares outstanding of 

such Funds listed by the same Fund 

issuer or Fund ‘‘family,’’ as follows: 

Aggregate total shares 

outstanding Annual fee 

Less than 10 million ................. $5,000 

10 million to less than 30 million ......................................... 10,000 

30 million to less than 50 million ......................................... 15,000 

50 million to less than 100 million ......................................... 20,000 

100 million to less than 250 

million .................................... 30,000 

250 million to less than 500 

million .................................... 40,000 

500 million to less than 750 

million .................................... 50,000 

750 million to less than one billion ......................................... 60,000 

Greater than one billion ............ 80,000 

Annual Fees are assessed beginning in 

the first full calendar year following the 

year of listing. The aggregate total shares 

outstanding is calculated based on the 

total shares outstanding as reported by 

the Fund issuer or Fund ‘‘family’’ in its 

most recent periodic filing with the 

Commission or other publicly available 

information. Annual Fees are not prorated or reduced for Funds that delist 

for any reason. Annual Fees apply 

regardless of whether any of these 

Funds is listed elsewhere. 

a. Derivative Securities Products 

NYSE Arca Equities proposes revised 

Annual Fees for Derivative Securities 

Products based on total shares 

outstanding for each issue, as follows: 

Aggregate total shares outstanding 

(each issue) 

Annual fee 

Less than 25 million ................. $2,000 

25 million up to 49,999,999 ...... 4,000 

50 million up to 99,999,999 ...... 8,000 

100 million up to 249,999,999 .. 15,000 

250 million up to 499,999,999 .. 20,000 

500 million and over ................. 25,000 

The revised Annual Fee for Derivative 

Securities Products will be billed 

quarterly in arrears effective as of 

January 1, 2007. As such, billing for the 

first calendar quarter of 2007, for 

example, will be based on the number 

of shares outstanding for an issue on 

March 30, 2007. For example, for an 

issue with 45 million shares outstanding 

on March 30, 2007, the Annual Fee 

payable for the quarter would be $1,000 

($4,000 Annual Fee divided by 4). If, at 

the end of the second calendar quarter 

of 2007, the number of shares 

outstanding for such issue increased to 

55 million, the Annual Fee payable for 

such quarter would be $2,000 ($8,000 

Annual Fee divided by 4). The 

Exchange believes it is appropriate to 

apply the revised Annual Fees to issuers 

of the specified securities as of January 

1, 2007 to permit the Exchange to apply 

the fee in the same manner to all such 

issuers listed on the Exchange, 

including those listed in the first quarter 

of 2007. The revised Annual Fee is 

expected to be lower for some issuers 

than the current Annual Fee. 

b. Closed-End Funds 

(1) Annual Fee Schedule for Primary 

Listed Security 

NYSE Arca Equities proposes the 

following Annual Fee Schedule for a 

Closed-End Fund’s primary class of 

listed security (common stock, or 

preferred stock if no common stock is 

listed) and will be equal to the greater 

of the minimum fee or the fee calculated 

on a per share basis: 

Per Share Rate—$0.00093 per share 


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8The Exchange notes that, with one exception 

discussed below, the only Derivative Securities 

Products currently listed on the Exchange are 

Investment Company Units (Exchange-Traded 

Funds) of one issuer of two separate trusts, which 

were listed on the Exchange in 2006. Because these 

listings were transfers from another national 

securities exchange, the issuer incurred no listing 

fee, in accordance with Commentary .04 to the 

Exchange’s Fee Schedule (which will cease to have 

effect on December 31, 2007). The Exchange has 

advised the issuer of the proposed changes to the 

Listing and Annual Fees. These two trusts listed six 

and 13 funds, respectively. Except for Commentary 

.04, the listing fee for each trust would have been 

$20,000. For new Derivative Securities Product 

issues, an issuer listing five or more issues would 

incur a higher listing fee under the proposed 

schedule than under the current schedule (e.g., an 

issuer listing six funds would pay $30,000, and 

$5,000 for each subsequent fund listed.) An 

additional issuer listed a series of Investment 

Company Units on the Exchange on March 28, 

2007, and the issuer would incur an initial listing 

fee of $20,000 under the current fee schedule and 

$5,000 under the proposed schedule. 

9Taking the example of the two trusts discussed 

above (see preceding footnote), the two trusts would 

have incurred Annual Fees of $30,000 and $50,000, 

respectively, based on the total aggregate shares of 

each trust outstanding at year-end 2006 (assuming 

the funds of each trust had been listed the entire 

year and the shares outstanding remained constant 

throughout the year). Under the proposed fee 

schedule, Annual Fees will be based on total shares 

outstanding of each fund. Accordingly, under the 

same circumstances described above, the trusts 

would incur an Annual Fee of $20,000 and $81,000, 

respectively, based on shares outstanding of each of 

their funds. 

10The Exchange notes that application of the 

proposed Annual Fee as of January 1, 2007 for 

Closed-End Funds will potentially impact only a 

few issuers. Following discussions, beginning in 

2006, with Closed-End Fund issuers about changes 

to the Annual Fee, eight of these funds delisted 

from the Exchange. The Exchange dually lists three 

Closed-End Funds, one of which is pending 

delisting. 

11 15 U.S.C. 78f(b). 

12 15 U.S.C. 78f(b)(4). 

Minimum Fee—$25,000 

The Annual Fee for Closed-End Funds 

is payable in January each year, and 

issuers are subject to Annual Fees in the 

year of listing, pro-rated based on days 

listed that calendar year. 

(2) Additional Classes of Listed Equity 

Issues 

The Annual Fee for equity issues 

other than the primary class of security 

listed will be the greater of the 

minimum or the fee calculated on a per 

share basis: 

Per Share Rate—$0.00093 per share 

Minimum Fee—$5,000 

(3) Limitations on Annual Fees 

Fund families that list between 3 and 

14 Closed-End Funds will receive a 5% 

discount off the calculated Annual Fee 

for each fund listed, and those with 15 

or more listed Closed-End Funds will 

receive a discount of 15%. No fund 

family shall pay aggregate Annual Fees 

in excess of $1,000,000 in any given 

year. 

In the case of transactions involving 

listed issuers (such as a consolidation 

between two or more listed issuers that 

results in the formation of a new issuer, 

or a merger or consolidation between a 

listed issuer and an unlisted issuer that 

results in the unlisted issuer surviving 

or the creation of a new issuer), where 

at the conclusion of the transaction a 

previously unlisted issuer immediately 

lists, Annual Fees will not be charged to 

that new issuer for the year in which it 

lists to the extent that the transaction 

concludes after March 31. To the extent 

that the transaction concludes on or 

before March 31 in any calendar year, 

however, the newly listing issuer will be 

charged pro rata Annual Fees from the 

date of listing to the end of the year. 

In addition, to the extent that a listed 

issuer is involved in a consolidation 

between two or more listed issuers that 

results in the formation of a new issuer, 

or a merger or consolidation between a 

listed issuer and an unlisted issuer that 

results in the unlisted issuer surviving 

or the creation of a new issuer, or a 

merger between two listed issuers where 

one listed issuer survives, and the 

transaction concludes on or before 

March 31 in any calendar year, the nonsurviving listed issuer(s) will only be 

subject to pro rata Annual Fees for that 

year through the date of the conclusion 

of the transaction. To the extent that the 

transaction concludes after March 31, 

the non-surviving listed issuer(s) will be 

subject to full Annual Fees for that year. 

4. Implementation 

NYSE Arca proposes to implement 

these revised fees, as applicable, to all 

issuers of Derivative Securities 

Products, Closed-End Funds and 

Structured Products as of January 1, 

2007 with the exception of listing fees 

for Closed-End Funds, which will take 

effect as of the date of Commission 

approval of the proposed rule change. 

The Exchange believes such 

implementation date is appropriate 

under the circumstances described 

below. NYSE Arca believes this 

proposal will streamline and clarify the 

fees applicable to Derivative Securities 

Products and Closed-End Funds, 

making them easier to understand and 

apply while continuing to provide for 

adequate support of the ongoing costs of 

issuer services, including regulatory 

oversight and product and service 

offerings. Further, this proposal aligns 

NYSE Arca listing and annual fees for 

Derivative Securities Products and 

Closed-End Funds with the fees charged 

by the NYSE, further simplifying the 

Fee Schedule and helping NYSE Arca to 

compete more effectively for listings. 

For Derivative Securities Products, 

the proposed Listing Fees provide an 

alternative fee structure and will in 

certain circumstances be lower for 

issuers than the previous Fee Schedule. 

The Exchange believes it is appropriate 

to apply these potential cost savings to 

issuers as of January 2007.8

As discussed above, the revised 

Annual Fee for Derivative Securities 

Products will be billed quarterly in 

arrears, beginning after the first calendar 

quarter in 2007, effective as of January 

1, 2007. The Annual Fee is expected to 

be lower for some Derivative Securities 

Products issuers than the current 

Annual Fee, but may be higher in some 

cases depending on the number of funds 

listed by the same issuer and the shares 

outstanding for each fund.9 The 

proposed Annual Fee for Closed-End 

Funds will apply as of January 1, 2007, 

and, for issuers listed in calendar year 

2007, will be pro-rated based on days 

listed in 2007.10

2. Statutory Basis 

NYSE Arca believes that the proposal 

is consistent with Section 6(b) 11 of the 

Act, in general, and Section 6(b)(4)12 of 

the Act, in particular, in that it provides 

for the equitable allocation of reasonable 

dues, fees and other charges among its 

issuers and other persons using its 

facilities. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NYSE Arca 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 

NYSE Arca has neither solicited nor 

received written comments on the 

proposed modifications to its fee 

schedule. 

Date of Effectiveness of the Proposed 

Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission will: 

(A) By order approve such proposed 

rule change, or 


pwalker on PROD1PC71 with NOTICES
27164 Federal Register / Vol. 72, No. 92 / Monday, May 14, 2007 / Notices 

13 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Cabinet orders were previously eligible for 

automated electronic trading on the PCX Plus 

system. NYSE Arca decommissioned the PCX Plus 

electronic trading system during the fourth quarter 

of 2006 and replaced it with the OX electronic 

trading system. As a result, the Exchange proposes 

to delete the name ‘‘PCX Plus’’ from the text of Rule 

6.80. At this time no issues have been designated 

for cabinet trading on OX or any other Exchange 

sponsored electronic system. 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

III. 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 form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

No. SR–NYSEArca–2007–22 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 File 

Number SR–NYSEArca–2007–22. 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 office 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 File 

Number SR–NYSEArca–2007–22 and 

should be submitted on or before June 

4, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–9177 Filed 5–11–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55723; File No. SR–

NYSEArca–2007–38] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change and Amendment No. 1 

Thereto Relating to Rule 6.80 

Governing Accommodation 

Transactions (Cabinet Trades) 

May 8, 2007. 

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 April 17, 

2007, NYSE Arca, Inc. (‘‘NYSE Arca’’ or 

the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been 

substantially prepared by the Exchange. 

On May 7, 2007, NYSE Arca filed 

Amendment No. 1 to the proposed rule 

change. The Commission is publishing 

this notice to solicit comment on the 

proposed rule change, as amended, from 

interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

NYSE Arca Rule 6.80 governing 

Accommodation Transactions, also 

referred to as Cabinet Trades. The text 

of the proposed rule change is available 

at NYSE Arca, the Commission’s Public 

Reference Room, and http:// 

www.nysearca.com. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange 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 these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange 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 

An ‘‘accommodation’’ or ‘‘cabinet’’

trade refers to trades in listed options on 

the Exchange that may be considered 

worthless or which are not actively 

traded. Exchange Rule 6.80, 

Accommodation Transactions (Cabinet 

Trades), which sets forth specific 

procedures for engaging in cabinet 

trades, currently (i) permits cabinet 

trades to occur via open outcry at a 

cabinet price of $1 per option contract 

when the class does not trade on the 

NYSE Arca automated electronic trading 

system,3 and (ii) requires Market Makers 

and Floor Brokers who wish to conduct 

a cabinet transactions to place their 

orders with a Trading Official. 

The primary purpose of this rule 

change is to amend Exchange Rule 6.80 

to authorize Floor Brokers and Market 

Makers to initiate cabinet trades. Under 

the existing procedures, Market Makers 

and Floor Brokers are only permitted to 

(i) place cabinet orders with a Trading 

Official and (ii) respond at a cabinet 

price to a request for a quote from a 

Trading Official. Pursuant to the 

proposed amendment, Market Makers 

and Floor Brokers will also be permitted 

to initiate a cabinet trade in the trading 

crowd on their own, without the need 

to first place the order with a Trading 

Official. This will save the additional 

time and process involved in a Market 

Maker or Floor Broker needing to first 

place a cabinet order that they are 

initiating, with a Trading Official, who 

would then in turn represent and 

execute the order on behalf of the 

Market Maker or Floor Broker. 

Permitting Market Makers and Floor 

Brokers to initiate cabinet orders and 

trades on their own accord will provide 

Market Makers and Floor Brokers with 

additional flexibility and will facilitate 

the fair, orderly and efficient handling 

of cabinet transactions on the Exchange. 

Permitting Market Makers and Floor 

Brokers to represent cabinet orders is 


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