Document ID: SEC-2007-1077-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-08-07T04:00Z

[Federal Register: August 7, 2007 (Volume 72, Number 151)]
[Notices]               
[Page 44206-44208]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07au07-105]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56181; File No. SR-NYSE-2007-70]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto To Amend the Gross FOCUS Fee

August 1, 2007.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''), \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on July 27, 2007, the New York Stock Exchange LLC (``NYSE'' 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 NYSE. On August 1, 
2007, NYSE filed Amendment No. 1 to the proposed rule change.\3\ The 
NYSE has designated this proposal as one establishing or changing a 
due, fee, or other charge imposed by the NYSE under section 
19(b)(3)(A)(ii) of the Act,\4\ and Rule 19b-4(f)(2) thereunder,\5\ 
which renders the proposal effective upon filing with the Commission. 
The Commission is publishing this notice to solicit comments on the 
proposed rule

[[Page 44207]]

change, as modified by Amendment No. 1, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 deleted a sentence in the statutory basis 
section of Exhibit 1 to the proposed rule change that was mistakenly 
included in the proposal and amended the Fee Schedule in Exhibit 5 
to reference the file number of this proposal.
    \4\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \5\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to reduce its gross FOCUS (Financial and 
Operational Combined Uniform Single Report) fee by 75% as of January 1, 
2008. In addition, following the closing of the proposed consolidation 
of the member firm regulatory functions of the National Association of 
Securities Dealers, Inc. (``NASD'') and NYSE Regulation, Inc. (``NYSE 
Regulation''), the Exchange will transfer 75% of the gross FOCUS fees 
paid by member organizations for the remainder of 2007 to the resultant 
combined self-regulatory organization, Financial Industry Regulatory 
Authority, Inc. (``FINRA'').
    The text of the proposed rule change is available on the NYSE's Web 
site (http://www.nyse.com), at the principal office of the NYSE, and at 

the Commission's Public Reference Room.

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 NYSE 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 NYSE 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
    On November 28, 2006, NYSE Regulation and NASD announced a plan to 
consolidate their member regulation operations into a combined 
organization that will be the sole U.S. private-sector provider of 
member firm regulation for securities firms that conduct business with 
the public (the ``Transaction''). The objective of the Transaction is 
to increase consistency and efficiency of member firm regulation, 
including examination, enforcement, and rule making, for the benefit of 
individual investors and overall market integrity. It is also an 
objective of the Transaction to reduce the regulatory and financial 
burdens placed on member firms as a result of duplicate self-regulatory 
structures.
    The Exchange charges its member organizations a fee of $0.42 per 
$1,000 of gross revenues as reported by each member firm in its FOCUS 
report,\6\ subject to minimum annual fees of $180.00 for member 
organizations who do not conduct a public business, $1,000.00 for 
introducing firms, and $2,000.00 for carrying firms and specialists. 
These fees are imposed on all Exchange member organizations other than 
those members for whom another self-regulatory organization is the 
designated examining authority (``DEA'') under Rule 17d-1 \7\ of the 
Act. The Exchange allocates the FOCUS fees to NYSE Regulation to fund 
its performance of its regulatory activities with respect to member 
organizations.
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    \6\ FOCUS (Securities Exchange Act Form X-17A-5) is an acronym 
for Financial and Operational Combined Uniform Single Report. The 
report is filed periodically with the Commission pursuant to Rule 
17a-5 under the Act.
    \7\ 17 CFR 240.17d-1.
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    As a substantial proportion of these regulatory activities will be 
performed by FINRA after the Transaction, the Exchange has agreed with 
the NASD that, subject to the closing of the Transaction, 75% of the 
gross FOCUS fees paid to the Exchange during the remainder of 2007 
after the closing of the Transaction will be remitted to FINRA. The 
Exchange believes that this apportionment of the FOCUS fee revenues is 
consistent with the relative regulatory activities that will be 
performed by NYSE Regulation and FINRA respectively after the 
Transaction. NYSE Regulation and the NASD have agreed upon this 
transitional period in which the Exchange remits FOCUS fee revenue to 
FINRA as a matter of administrative convenience to avoid the need for 
substantial adjustment of member firm billing arrangements mid-year. 
Assuming that the Transaction has closed, commencing January 1, 2008, 
the Exchange will reduce its FOCUS fees, including the minimum fees, by 
75%, but will charge these fees to all members notwithstanding that 
they will be members of both the Exchange and FINRA.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of section 6 of the Act \8\ in general and furthers 
the objectives of section 6(b)(4) of the Act \9\ in particular, in that 
it is designed to provide for the equitable allocation of reasonable 
dues, fees, and other charges among its members and other persons using 
its facilities.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that 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

    Written comments were neither solicited nor received.

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

    The foregoing rule change has become effective pursuant to section 
19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(2) \11\ thereunder 
because it changes a fee imposed by the Exchange. At any time within 60 
days of the filing of such 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.\12\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(2).
    \12\ The effective date of the original proposed rule is July 
27, 2007. The effective date of Amendment No. 1 is August 1, 2007. 
For purposes of calculating the 60-day period within which the 
Commission may summarily abrogate the proposed rule change under 
Section 19(b)(3)(C) of the Act, the Commission considers the period 
to commence on August 1, 2007, the date on which the NYSE submitted 
Amendment No. 1. 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 
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-NYSE-2007-70 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission,

[[Page 44208]]

100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2007-70. 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, 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 NYSE. 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-NYSE-2007-70 and should be 
submitted on or before August 28, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E7-15313 Filed 8-6-07; 8:45 am]

BILLING CODE 8010-01-P