Document ID: SEC-2008-0522-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2008-04-07T04:00Z

[Federal Register: April 7, 2008 (Volume 73, Number 67)]
[Notices]               
[Page 18842-18844]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07ap08-111]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57588; File No. SR-NYSEArca-2008-37]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Order Granting Accelerated Approval of Proposed Rule Change, as 
Modified by Amendment No. 1, Amending the Linkage Fees Portion of the 
Schedule of Fees and Charges for Exchange Services

March 31, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 18843]]

(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 28, 2008, NYSE Arca, Inc. (``NYSE Arca'' or the ``Exchange'') 
filed with the Securities and Exchange Commission (the ``Commission'') 
the proposed rule change as described in Items I and II below, which 
Items have been substantially prepared by the Exchange. On March 31, 
2008, the Exchange filed Amendment No. 1 to the proposed rule change. 
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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NYSE Arca is proposing to amend the Linkage Fees portion of the 
Schedule of Fees and Charges for Exchange Services (``Schedule''). The 
text of the proposed rule change is available at the Exchange, the 
Commission's Public Reference Room, and http://www.nyse.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 III 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
    The purpose of this filing is to amend the existing Schedule in 
order to revise the Linkage Fees portion of the Schedule, so as to 
conform with fee changes the Exchange has proposed for certain Broker 
Dealer executions. The Exchange plans to implement the revised Broker 
Dealer fees on April 1, 2008.
    Executions on NYSE Arca resulting from orders sent via the 
Intermarket Option Linkage (``Linkage Orders'') are subject to the same 
billing treatment as other Broker Dealer orders.\3\ Presently, the 
Exchange charges $0.50 for all electronically executed Linkage Orders. 
The Exchange assesses this rate for Linkage Order executions in all 
issues, including those that trade as part of the Penny Pilot.\4\
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    \3\ As stated in the proposal to establish a pilot program for 
Linkage Fees: ``[i]n connection with the launch of the options 
intermarket linkage, the Exchange seeks to include in its Schedule 
of Fees and Charges For Exchange Services a provision that applies 
to linkage fees stating that executions resulting from Linkage 
Orders will be subject to the same billing treatment as other 
broker-dealer executions.''
    See Securities Exchange Act Release No. 47560 (March 21, 2003), 
68 FR 15257 (March 28, 2003) (SR-PCX-2003-08). See also Securities 
Exchange Act Release Nos. 47786 (May 2, 2003), 68 FR 24779 (May 8, 
2003) (order approving SR-PCX-2003-08) and 56133 (July 25, 2007), 72 
FR 42210 (August 1, 2007) (SR-NYSEArca-2007-66) (order approving 
extension of Linkage Fee pilot program through July 31, 2008).
    \4\ The Exchange may trade option contracts in one-cent 
increments in certain approved issues as part of the Penny Pilot 
through March 27, 2009. See Securities Exchange Act Release No. 
56568 (September 27, 2007), 72 FR 56422 (October 3, 2007) (SR-
NYSEArca-2007-88).
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    Options that overlay issues that trade as part of the Penny Pilot 
are subject to a Post/Take pricing model.\5\ On March 28, 2008, NYSE 
Arca filed with the Commission a proposal that lowers the ``Take 
Liquidity'' fee for electronically executed Broker Dealer orders in 
issues that trade as part of the Penny Pilot from $0.50 to $0.45.\6\ 
Linkage Orders that are executed in Penny Pilot issues are assessed the 
same rate as other Broker Dealer orders that take liquidity, because 
Linkage Orders ``take'' liquidity that is resting in the NYSE Arca 
Consolidated Book as opposed to ``posting'' liquidity. In conjunction 
with the change to the Take Liquidity fee that the Exchange has 
previously proposed, NYSE Arca is now proposing to create a new fee for 
electronically executed Linkage Orders in Penny Pilot issues. Such 
orders that were previously charged a $0.50 fee will now be assessed a 
reduced fee of $0.45. Linkage Fees for non-Penny Pilot issues remain 
the same. This change will keep Linkage Fees consistent with other fees 
charged for Broker Dealer executions.
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    \5\ A detailed description of the Post/Take pricing model is 
shown in the Trade Related Charges section of the Schedule.
    \6\ See SR-NYSEArca-2008-36. Fee changes made pursuant to SR-
NYSEArca-2008-36, which was effective upon filing, are reflected in 
the Schedule.
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    The Exchange plans to implement this new, lower Linkage Fee in 
conjunction with the implementation of the revised Take Liquidity fee 
on April 1, 2008, pending Commission approval.

2. Statutory Basis

    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act,\7\ in general, and Section 6(b)(4),\8\ in particular, 
in that it provides for the equitable allocation of reasonable dues, 
fees, and other charges among its members and other persons using its 
facilities for the purpose of executing Linkage Orders that are routed 
to the Exchange from other market centers.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
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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. 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 rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2008-37 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-2008-37. 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

[[Page 18844]]

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, 100 F Street, NE., Washington, DC 20549, on official 
business days between the hours of 10 a.m. and 3 p.m. 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-2008-37 and should be submitted on or before 
April 28, 2008.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange \9\ and, in particular, with the requirements of Section 6(b) 
of the Act.\10\ In particular, the Commission finds that the Exchange's 
proposal is consistent with Section 6(b)(4) of the Act,\11\ which 
requires that the rules of the Exchange provide for the equitable 
allocation or reasonable dues, fees, and other charges among its 
members and other persons using its facilities. The Commission notes 
that proposal conforms Linkage Fees with those fees charged on other 
Broker Dealer executions.
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    \9\ In approving this rule, the Commission notes that it has 
considered its impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
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    The Commission finds good cause, pursuant to Section 19(b)(2)(B) of 
the Act,\12\ for approving the proposed rule change prior to the 30th 
day after the date of publication of the notice of the filing thereof 
in the Federal Register. An accelerated approval will not only permit 
the Exchange to comply with the terms of the Linkage Fee pilot program 
\13\ but will also allow the Exchange to immediately implement a lower 
fee for market participants executing Linkage Orders on NYSE Arca.
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    \12\ 15 U.S.C. 78s(b)(2)(B).
    \13\ See note 3 supra.
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\14\ that the proposed rule change (SR-NYSEArca-2008-37), as modified 
by Amendment No. 1, is hereby approved on an accelerated basis.
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    \14\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
Florence E. Harmon,
Deputy Secretary.
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    \15\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E8-7113 Filed 4-4-08; 8:45 am]

BILLING CODE 8011-01-P