Document ID: SEC-2007-0007-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-01-03T05:00Z

[Federal Register: January 3, 2007 (Volume 72, Number 1)]
[Notices]               
[Page 171-173]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03ja07-77]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54985; File No. SR-NYSE-2006-113]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Extend the Moratorium on the Qualification and Registration of New 
Registered Competitive Market Makers and New Competitive Traders, 
Governed by Rules 107A and 110, Respectively, for an Additional Six 
Months

December 21, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 172]]

(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on December 13, 2006, 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 and 
II below, which Items have been substantially prepared by the 
Exchange.\3\ The Exchange has designated the proposed rule change as 
constituting a ``non-controversial'' rule change under Section 
19(b)(3)(A)(iii) of the Act,\4\ and Rule 19b-4(f)(6) 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 change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Certain technical corrections were made throughout the 
discussion of the proposed rule change pursuant to a conversation 
with NYSE staff. Telephone conversation between Jean Walsh, 
Principal Rule Counsel, NYSE, and Sara Gillis, Attorney, Division of 
Market Regulation, Commission, on December 18, 2006.
    \4\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \5\ 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

    The NYSE proposes to extend for six months the moratorium related 
to the qualification and registration of Registered Competitive Market 
Makers (``RCMMs'') pursuant to Exchange Rule 107A and Competitive 
Traders (``CTs'') pursuant to Exchange Rule 110. The text of the 
proposed rule change is available on the NYSE's Web site (http://www.nyse.com
), at the NYSE's Office of the Secretary, 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 Exchange included statements 
concerning the purpose of, and basis for, 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
    The Exchange proposes to extend for six months the current 
moratorium related to the qualification and registration of RCMMs 
pursuant to Exchange Rule 107A and CTs pursuant to Exchange Rule 110.
    On September 22, 2005, the Exchange filed SR-2005-63 \6\ (``Filing 
2005-63'') with the Commission proposing to implement a moratorium on 
the qualification and registration of new RCMMS and CTs in order to 
allow the Exchange an opportunity to review the viability of RCMMs and 
CTs in the NYSE HYBRID MARKETSM (``Hybrid Market'').\7\
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    \6\ See Securities Exchange Act Release No. 52648 (October 21, 
2005), 70 FR 62155 (October 28, 2005) (SR-NYSE-2005-63).
    \7\ See Securities Exchange Act Release No. 53539 (March 22, 
2006), 71 FR 16353 (March 31, 2006) (SR-NYSE-2004-05).
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    Subsequent to the submission of Filing 2005-63, the Exchange filed 
SR-NYSE-2006-11 \8\ (``Filing 2006-11'') proposing to modify the 
moratorium and grant RCMM firms the ability to replace a RCMM who 
relinquishes his or her registration and ceases to conduct business as 
a RCMM during the moratorium, with a newly qualified and registered 
RCMM. The moratorium does not restrict RCMMs from joining any RCMM firm 
or becoming or remaining an independent RCMM. Neither does the 
moratorium restrict any RCMM firm from hiring any existing RCMMs.
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    \8\ See Securities Exchange Act Release No. 53549 (March 24, 
2006), 71 FR 16388 (March 31, 2006) (SR-NYSE-2006-11).
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    Subsequently, the Exchange extended the moratorium, as amended, in 
order to allow the Exchange to continue its review during the phasing 
in of the Hybrid Market for an additional six months until on or about 
December 31, 2006.\9\
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    \9\ See Securities Exchange Act Release No. 54140 (July 13, 
2006), 71 FR 41491 (July 21, 2006) (SR-NYSE-2006-48).
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    The Exchange now proposes to extend the moratorium, as amended, for 
an additional six months in order to include in its review, data from 
the full operation of the Hybrid Market with respect to RCMMs and CTs 
that can only be obtained when the remainder of the third phase and the 
fourth phase of the Hybrid Market are implemented in the beginning of 
2007. This data will allow the Exchange to make a more informed 
decision as to the viability of RCMMs and CTs in the Hybrid Market. As 
such, the Exchange believes an additional six-month extension of the 
moratorium is necessary.
    The Exchange will issue an Information Memo announcing the 
extension of the moratorium. The review is currently estimated to be 
completed on or about June 29, 2007.
2. Statutory Basis
    The Exchange believes that the basis under the Act for this 
proposed rule change is the requirement under Section 6(b)(5) \10\ that 
an exchange have rules that are designed to promote just and equitable 
principles of trade, to remove impediments to and perfect the mechanism 
of a free and open market and a national market system and, in general, 
to protect investors and the public interest. The moratorium gives the 
Exchange time to fully study the future viability of RCMMs and CTs in 
order to improve the market. The proposed rule change is a six month 
extension of the RCMM and CT moratorium implemented in Filing 2005-63 
and modified in Filing 2006-11.
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    \10\ 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 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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

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

    Because the proposed rule change: (i) Does not significantly affect 
the protection of investors or the public interest; (ii) does not 
impose any significant burden on competition; and (iii) does not become 
operative for 30 days after the date of the filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest, the proposed rule change has 
become effective pursuant to Section 19(b)(3)(A) of the Act \11\ and 
Rule 19b-4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii) 
under the Act, the Exchange is required to give the Commission 
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 filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has requested that the Commission waive the 5-day pre-
filing notice requirement. The Commission has determined to waive 
this requirement.

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[[Page 173]]

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \13\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \14\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The NYSE has 
requested that the Commission waive the 30-day operative delay. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because it will allow the moratorium to continue without interruption 
so that the Exchange may have additional time to fully study the future 
viability of RCMMs and CTs in the Hybrid Market. For these reasons, the 
Commission designates that the proposed rule change become operative 
immediately.\15\
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate the 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-NYSE-2006-113 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-NYSE-2006-113. 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 the 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-NYSE-2006-113 and should be submitted on or before January 24, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6-22448 Filed 12-29-06; 8:45 am]

BILLING CODE 8011-01-P