Document ID: SEC-2007-0804-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NYSE Arca, Inc., et al.
Posted Date: 2007-06-12T04:00Z

[Federal Register: June 12, 2007 (Volume 72, Number 112)]
[Notices]               
[Page 32389-32390]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12jn07-85]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55846; File No. SR-NYSEArca-2007-48; SR-NYSEArca-2007-
49]

 
Self-Regulatory Organizations; NYSE Arca, Inc. and NYSE Arca 
Equities, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Changes Relating to an Increase in the Frequency of the 
Short Interest Reporting Requirements for Equity Trading Permit Holders 
and Options Trading Permit Holders

June 1, 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 May 24, 2007, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca''), by 
itself and through its wholly owned subsidiary NYSE Arca Equities, Inc. 
(``NYSE Arca Equities''), filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule changes as described in 
Items I, II, and III below, which Items have been substantially 
prepared by the Exchange. The Exchange filed the proposals as ``non-
controversial'' rule changes under Rule 19b-4(f)(6) under the Act,\3\ 
which rendered the proposals effective upon filing with the Commission. 
The Commission is publishing this notice to solicit comments on the 
proposed rule changes from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Changes

A. NYSE Arca Equities Rule 4.5(e)

    The Exchange proposes to amend NYSE Arca Equities Rule 4.5(e) to 
reflect the Commission's adoption of Regulation SHO.\4\ By this filing, 
the Exchange also shall clarify the short interest reporting 
requirements of Equity Trading Permit (``ETP'') Holders \5\ as 
prescribed by Rule 4.5(e). While the changes to the reporting 
requirements of ETP Holders pursuant to this proposal will be effective 
upon filing, the changes will become operative in September 2007, 
consistent with the requirements of other representative organizations 
of the Intermarket Surveillance Group (``ISG'').\6\ The text of the 
proposed rule change is available at the Exchange, at the Commission's 
Public Reference Room, and at http://www.nyse.com.

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    \4\ See Securities Exchange Act Release No. 34-50103 (July 28, 
2004), 69 FR 48008 (August 6, 2004). See also 17 CFR 240.200 et seq.
    \5\ See NYSE Arca Equities Rule 1.1(n).
    \6\ See ISG Notice to Members 2007-01 (March 15, 2007), and 
American Stock Exchange Notice REG 2007-19 (March 16, 2007).
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B. NYSE Arca Rule 4.5(f)

    The Exchange also proposes to amend NYSE Arca Rule 4.5(f) to 
reflect the Commission's adoption of Regulation SHO.\7\ By this filing, 
the Exchange also shall clarify the short interest reporting 
requirements of Options Trading Permit (``OTP'') Holders \8\ and OTP 
Firms.\9\ While the changes to the reporting requirements of OTP 
Holders and OTP Firms pursuant to this proposal will be effective upon 
filing, the changes will become operative in September 2007, consistent 
with the requirements of other representative organizations of the 
ISG.\10\ The text of the proposed rule change is available at the 
Exchange, at the Commission's Public Reference Room, and at http://www.nyse.com
.

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    \7\ See Securities Exchange Act Release No. 34-50103 (July 28, 
2004), 69 FR 48008 (August 6, 2004). See also 17 CFR 240.200 et seq.
    \8\ See NYSE Arca Rule 1.1(q).
    \9\ See NYSE Arca Rule 1.1(r).
    \10\ See ISG Notice to Members 2007-01 (March 15, 2007), and 
American Stock Exchange Notice REG 2007-19 (March 16, 2007).
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Changes

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of and basis for the 
proposed rule changes and discussed any comments it received on the 
proposed rule changes. The text of these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
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 Changes

1. Purpose

a. NYSE Arca Equities Rule 4.5(e)

    The Exchange proposes to make certain minor technical amendments to 
NYSE Arca Equities Rule 4.5(e), Periodic Reports, as such rule makes 
references to rules under the Act that are no longer in effect. 
Specifically, Rule 4.5(e) makes reference to ``short'' sales, as 
defined by Rule 3b-3 under the Act.\11\ In light of the adoption of 
Regulation SHO, the Exchange shall make the appropriate change to its 
rule text to remove references to Rule 3b-3 under the Act and correctly 
identify Rule 200(a) under the Act \12\ where such definition of short 
sales may be found. Further, Rule 4.5(e) exempts ETP Holders from 
reporting short positions if such a position resulted from a sale 
specified in clause (9) of paragraph (e) of Rule 10a-1 under the Act. 
Since clause (9) has been removed from Rule 10a-1(e) under the Act, the 
exemption to ETP Holders is no longer applicable, and shall be removed 
as a reference with NYSE Arca Equities Rule 4.5(e).
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    \11\ See 17 CFR 240.3b-3.
    \12\ See 17 CFR 240.200(a).
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    Additionally, the Exchange proposes to increase the frequency of 
periodic reports that ETP Holders must submit to the Exchange 
concerning short positions in securities, as prescribed by NYSE Arca 
Equities Rule 4.5(e), from monthly to twice per month. This increase in 
the frequency of such reports is consistent with similar changes 
recently approved by the Commission for the National Association of 
Securities Dealers, Inc. (``NASD''), the New York Stock Exchange LLC 
(``NYSE''), and the American Stock Exchange LLC (``Amex'').\13\
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    \13\ See Securities Exchange Act Release No. 34-55406 (March 6, 
2007), 72 FR 11071 (March 12, 2007) (SR-NASD-2006-131; SR-NYSE-2006-
111; SR-Amex-2007-05).
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    The Exchange shall implement the new periodic reporting 
requirements for short positions of ETP Holders in September 2007 to be 
consistent with the increased reporting requirements of other self-
regulatory organizations.\14\
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    \14\ See supra note 6.
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b. NYSE Arca Rule 4.5(f)

    The Exchange proposes to make certain minor technical amendments to 
NYSE Arca Rule 4.5(f), Periodic Reports, as such rule makes references 
to rules under the Act that are no longer in effect. Specifically, Rule 
4.5(f) makes reference to ``short'' sales, as defined by Rule 3b-3 
under the Act.\15\ In light of the adoption of Regulation SHO by the 
Commission, the Exchange shall make the appropriate change to its rule 
text to remove references to Rule 3b-3 under the Act and correctly 
identify Rule

[[Page 32390]]

200(a) under the Act \16\ where such definition of short sales may be 
found. Further, Rule 4.5(f) exempts OTP Holders and OTP Firms from 
reporting short positions if such a position resulted from a sale 
specified in clause (9) of paragraph (e) of Rule 10a-1 under the Act. 
Since clause (9) has been removed from Rule 10a-1(e) under the Act, the 
exemption to OTP Holders and OTP Firms is no longer applicable, and 
shall be removed as a reference with NYSE Arca Rule 4.5(f).
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    \15\ See 17 CFR 240.3b-3.
    \16\ See 17 CFR 240.200(a).
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    Additionally, the Exchange proposes to increase the frequency of 
periodic reports that OTP Holders and OTP Firms must submit to the 
Exchange concerning short positions in securities, as prescribed by 
NYSE Arca Rule 4.5(f), from monthly to twice per month. This increase 
in the frequency of such reports is consistent with similar changes 
recently approved by the Commission for the NASD, NYSE, and the 
Amex.\17\
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    \17\ See Securities Exchange Act Release No. 34-55406 (March 6, 
2007), 72 FR 11071 (March 12, 2007) (SR-NASD-2006-131; SR-NYSE-2006-
111; SR-Amex-2007-05).
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    The Exchange shall implement the new periodic reporting 
requirements for short positions of OTP Holders and OTP Firms in 
September 2007 to be consistent with the increased reporting 
requirements of other self-regulatory organizations.\18\
2. Statutory Basis
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    \18\ See supra note 10.
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    The Exchange believes the proposed rule changes are consistent with 
Section 6(b) of the Act \19\ in general and further the objectives of 
Section 6(b)(5) \20\ in particular in that they are designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.
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    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule changes 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 Changes Received From Members, Participants or Others

    Written comments on the proposed rule changes were neither 
solicited nor received.

III. Date of Effectiveness of the Proposed Rule Changes and Timing for 
Commission Action

    Because the foregoing proposed rule changes do not (i) 
Significantly affect the protection of investors or the public 
interest, (ii) impose any significant burden on competition, or (iii) 
become operative within 30 days after the date of the filing, they have 
become effective upon filing pursuant to Section 19(b)(3)(A) of the Act 
\21\ and Rule 19b-4(f)(6) \22\ thereunder.
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    \21\ 15 U.S.C. 78s(b)(3)(A).
    \22\ 17 CFR 19b-4(f)(6).
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    At any time within 60 days of the filing of the proposed rule 
changes, the Commission may summarily abrogate such rule changes 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.\23\
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    \23\ See 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
changes are 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 No. SR-NYSEArca-2007-48 or SR-NYSEArca-2007-49 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 No. SR-NYSEArca-2007-48 or SR-
NYSEArca-2007-49. 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 
changes that are filed with the Commission, and all written 
communications relating to the proposed rule changes 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 File No. SR-NYSEArca-2007-48 or SR-
NYSEArca-2007-49 and should be submitted on or before July 3, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-11266 Filed 6-11-07; 8:45 am]

BILLING CODE 8010-01-P