Document ID: SEC-2005-0436-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange, Inc.
Posted Date: 2005-12-23T05:00Z

[Federal Register: December 23, 2005 (Volume 70, Number 246)]
[Notices]               
[Page 76336-76337]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23de05-115]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52974; File No. SR-NYSE-2005-88]

 
Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto Relating to the Waiver of Initiation Fees 
Charged to New Lessee Members

 December 16, 2005.
    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 December 13, 2005, the New York Stock Exchange, Inc. (``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 Exchange. On 
December 14, 2005, the Exchange filed Amendment No. 1 to the proposed 
rule change.\3\ The Exchange filed the proposed rule change pursuant to 
section 19(b)(3)(A)(ii) of the Act \4\ and Rule 19b-4(f)(2) 
thereunder,\5\ which render the proposal effective upon filing with the 
Commission. 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
    \3\ See Partial Amendment dated December 14, 2005 (``Amendment 
No. 1''). In Amendment No. 1, the Exchange (i) added information to 
the purpose section to conform it to the proposed rule text; (ii) 
made changes to the Exchange's 2005 Price List to conform it to the 
proposed changes to Exchange Rule 301; (iii) amended the rule text 
to indicate that the effective date for the waiver is December 13, 
2005; and (iv) made technical changes.
    \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 amend Exchange Rule 301 to waive the 
initiation fees charged to new lessee members upon lease of an Exchange 
seat. The text of the proposed rule change is available on the 
Exchange's Web site (http://www.nyse.com.), at the Exchange'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 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 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 waive the initiation fees charged to 
lessee members upon a new lease of an Exchange seat.
    Article II, Section 4 of the Exchange's constitution authorizes the 
Exchange's Board of Directors to impose by rule initiation fees on new 
lessee members. The Board has established an initiation fee for lessee 
members by its adoption of Supplementary Material .27 (Payments to be 
made on day of approval of transfer or lease and payments to be made 
prior to admission to membership) of Exchange Rule 301. Supplementary 
Material .27 of Exchange Rule 301 sets initiation fees for leased seats 
at an amount equal to 5% of the last contracted sale of a seat, subject 
to minimum and maximum fees of $1,000 and $5,000 respectively. As seat 
prices

[[Page 76337]]

currently exceed $1,000,000, the current initiation fee for lessee 
members is the $5,000 maximum.
    On December 6, 2005, the members of the Exchange and the 
shareholders of Archipelago Holdings, Inc. (``Archipelago'') voted to 
approve a merger of the Exchange and Archipelago. It is anticipated 
that the merger will be consummated in early 2006 upon receipt of 
approval of the transaction from the Division of Market Regulation. 
Upon consummation of the merger, the Exchange and Archipelago will each 
become wholly owned subsidiaries of a new publicly traded company, NYSE 
Group, Inc., and members of the Exchange will exchange their membership 
interests for shares of NYSE Group and cash.
    The Exchange believes it is appropriate to waive the initiation 
fees currently charged to lessee members who commence new leases on or 
after December 13, 2005. The initiation fees were established at a time 
when it was assumed that most new lessee members would lease a seat for 
a reasonable period of time and would amortize the cost of the 
initiation fee over that period. As new leases at this time are likely 
to have a duration of only a matter of weeks, that will no longer be 
the case. As such, the Exchange believes that it is equitable to waive 
the initiation fee at this time.
    In addition to amending Exchange Rule 301 in the manner described 
above, the Exchange is making a corresponding change to page 11 of the 
Exchange 2005 Price List to indicate that initiation fees will no 
longer be charged in connection with the commencement of new leases. 
References in page 11 of the Exchange 2005 Price List to ``transfer 
fees'' are intended as references to the initiation fees established by 
Supplementary Material .27 of Exchange Rule 301.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(4) \6\ that an exchange have rules that 
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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    \6\ 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

    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

    The foregoing rule change has become effective pursuant to section 
19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(2) thereunder,\8\ because 
it establishes or changes a due, fee or other charge applicable only to 
a member.\9\ 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 further of the purposes of the Act.\10\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(2).
    \9\ At the request of the Exchange, the Commission added 
``applicable only to a member.'' Telephone conversation between John 
Carey, Assistant General Counsel, Exchange, and Kim Allen, Special 
Counsel, Commission, Division of Market Regulation, on December 16, 
2005.
    \10\ 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 that period 
to commence on December 14, 2005, the date the Exchange filed 
Amendment No. 1 to the proposed rule change. 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, as amended, 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-2005-88 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.
    All submissions should refer to File Number SR-NYSE-2005-88. 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-2005-88 and should be submitted on or before 
January 13, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. E5-7768 Filed 12-22-05; 8:45 am]

BILLING CODE 8010-01-P