Document ID: SEC-2006-0555-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NYSE Arca, Inc.
Posted Date: 2006-04-28T04:00Z

[Federal Register: April 28, 2006 (Volume 71, Number 82)]
[Notices]               
[Page 25274-25276]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28ap06-123]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53703; File No. SR-NYSEArca-2006-09]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to NYSE 
Arca Equities Inc. Rule 5.1(c)

April 21, 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 April 13, 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 prepared by the Exchange. The Exchange filed the 
proposal pursuant to section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6) 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 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)(6).
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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, for the reasons and time 
period set forth in this proposal, that an independent accounting firm 
not prepare a report--for submission to the Commission--on Archipelago 
Holdings, Inc.'s (``Archipelago Holdings'') compliance with the 
applicable NYSE Arca Equities' listing standards, as required by NYSE 
Arca Equities Rule 5.1(c).

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

[[Page 25275]]

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 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NYSE Arca Equities Rule 5.1(c) requires, among other things, that 
if a security of an affiliate of NYSE Arca Equities or any entity that 
operates and/or owns a trading system or facility of NYSE Arca is 
listed pursuant to the rules of NYSE Arca Equities, then, once a year, 
an independent accounting firm shall review the listing standards for 
the subject security to ensure that the issuer is in compliance with 
NYSE Arca's Equities' listing requirements, and a copy of the report 
shall be forwarded promptly to the Commission (``Annual Report'').\5\ 
In August 2004, Archipelago Holdings'' common stock was listed on NYSE 
Arca pursuant to the rules of NYSE Arca Equities. Because Archipelago 
Holdings owns and operates NYSE Arca Marketplace (formerly known as the 
Archipelago Exchange), a facility of NYSE Arca (formerly known as the 
Pacific Exchange), it was subject to the requirements of Rule 5.1(c), 
including the Annual Report.\6\
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    \5\ NYSE Arca Equities Rule 5.1(c) also requires that NYSE Arca 
Equities submit a monthly report to the Commission that describes 
its monitoring, among other things, of (i) trading in listed 
securities subject to this rule, and (ii) compliance by such 
listings with applicable listing standards. NYSE Arca Equities 
submitted such reports related to the listing of Archipelago 
Holdings on a timely basis for each month that Archipelago Holdings 
was listed and subject to this rule, including the report for March 
2006, which was submitted on April 10, 2006.
    \6\ See Securities Exchange Act Release No. 50171 (August 9, 
2004), 69 FR 50427 (August 16, 2004) (order approving NYSEArca 
Equities Rule 5.1(c)) (``Approval Order'').
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    On March 7, 2006, as a result of the merger between Archipelago 
Holdings and the New York Stock Exchange Inc., which was completed that 
day, Archipelago Holdings' common stock was delisted from NYSE Arca. 
Accordingly, for the following reasons, NYSE Arca, by this filing, is 
proposing that the Annual Report related to Archipelago Holdings' 
listing on NYSE Arca for the period August 2004 through March 2006 not 
be completed:
    1. The Annual Report would relate to an entity (Archipelago 
Holdings) that is no longer publicly traded or listed on NYSE Arca, and 
as such, policy considerations that underlie the requirement in NYSE 
Arca Equities Rule 5.1(c) for an Annual Report as set forth in the 
Commission's Approval Order--that it would provide additional assurance 
that all listed securities comply with listing standards and help serve 
to minimize or eliminate potential conflicts of interest that may exist 
as a result of the listing on NYSE Arca of the security of an affiliate 
of NYSE Arca Equities or an entity that operates and/or owns a trading 
system or facility of the Exchange \7\--are no longer applicable; \8\
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    \7\ A discussion of these conflicts is contained in the Approval 
Order.
    \8\ Telephone conversation between A. David Strandberg III, 
Director, NYSE Arca Equities, and Heather A. Seidel, Senior Special 
Counsel, Commission, Division of Market Regulation (``Division''), 
on April 21, 2006.
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    2. NYSE Arca Equities otherwise fully complied with its Rule 5.1(c) 
during this time period, including the preparation and submission to 
the Commission of the monthly reports also required by Rule 5.1(c); and
    3. The costs and burden related to preparation of the Annual Report 
would be substantial in relation to any benefits.
    Notwithstanding this filing, NYSE Arca Equities Rule 5.1(c) remains 
in full force and effect, and is not revised in any way by this filing.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act \9\ in general and furthers the objectives 
of section 6(b)(5) \10\ in particular, in that the policy and practical 
considerations underlying NYSE Arca Equities Rule 5.1(c) are no longer 
applicable, that NYSE Arca Equities otherwise complied with Rule 
5.1(c), and the costs and burden related to compliance would be 
substantial in relation to any benefits.\11\
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ At the request of the Exchange, the Commission staff 
amended the statutory basis section to make it consistent with the 
Form 19b-4 as filed by the Exchange. Telephone conversation between 
A. David Strandberg III, Director, NYSE Arca Equities, and Natasha 
Cowen, Attorney, Commission, Division, on April 19, 2006 (``April 19 
Telephone Conversation'').
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposal 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

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) Impose any significant burden on competition; and
    (iii) Become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public interest, it 
has become effective pursuant to section 19(b)(3)(A) of the Act \12\ 
and Rule 19b-4(f)(6) thereunder.\13\ As required under Rule 19b-
4(f)(6)(iii) under the Act,\14\ the Exchange provided the Commission 
with written notice of its intent to file the proposed rule change, 
along with a brief description and text of the proposed rule change, at 
least five business days prior to the date of the filing of the 
proposed rule change.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). April 19 Telephone Conversation.
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
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    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 rule-comments@sec.gov. Please include 

File Number SR-NYSEArca-2006-09 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary,

[[Page 25276]]

Securities and Exchange Commission, Station Place, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2006-09. 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 
File Number SR-NYSEArca-2006-09 and should be submitted on or before 
May 19, 2006.

    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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Nancy M. Morris,
Secretary.
[FR Doc. E6-6414 Filed 4-27-06; 8:45 am]

BILLING CODE 8010-01-P