Document ID: SEC-2008-0189-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2008-02-05T05:00Z

[Federal Register: February 5, 2008 (Volume 73, Number 24)]
[Notices]               
[Page 6764-6766]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05fe08-101]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57221; File No. SR-NYSEArca-2008-11]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending Fees 
Applicable to Certain Exchange Traded Funds and Rebates for Tape B 
Securities

January 29, 2008.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on January 16, 2008, NYSE Arca, Inc. (``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 substantially prepared by the Exchange. The Exchange filed the 
proposed rule change pursuant to Section 19(b)(3)(A) of the Act,\3\ and 
Rule 19b-4(f)(2) 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)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange, through its wholly-owned subsidiary NYSE Arca 
Equities, proposes to amend the section of its Schedule of Fees and 
Charges for

[[Page 6765]]

Exchange Services (the ``Fee Schedule'') that applies to: (1) Orders 
submitted to the Exchange by ETP Holders \5\ for (i) equity securities 
listed on the American Stock Exchange, LLC or any regional securities 
exchange (``Tape B Securities'') or (ii) Exchange Traded Funds 
(``ETFs'') listed on the New York Stock Exchange, LLC (``NYSE''); and 
(2) fees assessed by the Exchange for certain connectivity 
applications. While changes to the Fee Schedule pursuant to this 
proposal are effective upon filing, this filing applies the changes 
retroactively to January 1, 2008. The text of the proposed rule change 
is available at the Exchange, the Commission's Public Reference Room, 
and on the Exchange's Internet Web site at http://www.nyse.com.

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    \5\ See NYSE Arca Equities Rule 1.1(n).
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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 purpose of this proposed rule change is to amend the relevant 
section of its Fee Schedule that applies to rebates provided to ETP 
Holders that submit orders which provide liquidity on NYSE Arca 
Equities for equity securities listed on the American Stock Exchange, 
LLC, or any regional stock exchange, commonly referred to as Tape B 
Securities. Currently, ETP Holders must qualify to receive the rebates 
for Tape B Securities by meeting criteria specified within the Fee 
Schedule. These criteria, based on trade volume submitted to NYSE Arca 
Equities in Tape B securities by an ETP Holder, designate initial and 
ongoing requirements in order for the ETP Holder to meet and maintain 
their eligibility to receive the rebates. Paid monthly,\6\ the rebate 
represents an estimated fifty percent (50%) of the tape revenue credit 
received from the Consolidated Tape Association (``CTA'') by the 
Exchange for the eligible transactions \7\ of Tape B securities 
executed by the ETP Holder. Tape revenue received by the Exchange for 
transactions submitted by ETP Holders that do not meet the eligibility 
criteria for the Tape B rebates is not shared with such ETP Holders.
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    \6\ Although the rebates for Tape B securities are paid by the 
Exchange to ETP Holders on a monthly basis, these revenues are 
received by the Exchange from the CTA quarterly. As a result, the 
Exchange provides an estimated monthly payment to ETP Holders for 
eligible transactions submitted for Tape B securities based on 
information available and/or previous monies received from the CTA.
    \7\ Rebates for Tape B securities are applicable to limit orders 
submitted by ETP Holders that are residing in the NYSE Arca Equities 
Book and that execute against inbound marketable orders.
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    As NYSE Arca Equities no longer believes such criteria, or limiting 
the eligibility for such rebates, to be appropriate, the Exchange 
proposes to remove the criteria in their entirety and provide fifty 
percent (50%) of the estimated tape revenue credit to all ETP Holders 
which submit limit orders for Tape B securities that provide liquidity 
for the NYSE Arca Equities Book. Payment of the rebates will continue 
on a monthly basis. While changes to the Fee Schedule pursuant to this 
proposal will be effective upon filing, the changes will be implemented 
retroactively to January 1, 2008 for billing purposes of the Exchange.
    With this filing, the Exchange also makes clarifying amendments to 
the Fee Schedule to reflect the transfer of all ETFs previously listed 
on the NYSE to NYSE Arca Equities. The transfer, announced by the NYSE 
in 2007, was completed by its deadline of December 31, 2007. Therefore, 
references to fees, credits or rebates specific to ETFs listed on the 
NYSE are obsolete.
    Additionally, the current charge of $300 listed for subscription of 
the RealTick[reg] financial software, operated by Townsend Analytics 
(``TAL'') and offered to ETP Holders by the Exchange is not appropriate 
in light of the various options that ETP Holders may select to receive. 
Depending on the RealTick[reg] package an ETP Holder elects to receive, 
the charge may be greater or lesser than the current listed charge of 
$300. For this reason, NYSE Arca Equities proposes to clarify that all 
fees assessed to an ETP Holder for each RealTick[reg] workstation to 
which they subscribe shall be fees incurred by the Exchange from TAL, 
for providing such services, and passed through to the ETP Holder. 
There will be no change to the fees payable by ETP Holders for the use 
of the RealTick[reg] software as a result of this amendment.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) 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 
Exchange members and other persons using its facilities.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 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 not solicited, and does not intend to solicit, 
comments on this proposed rule change.

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

    The foregoing proposed rule change is effective upon filing 
pursuant to Section 19(b)(3)(A)(ii) \10\ of the Act and Rule 19b-
4(f)(2) \11\ thereunder because it establishes or changes a due, fee, 
or other charge applicable only to a member imposed by the Exchange. 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.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
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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-NYSEArca-2008-11 on the subject line.

[[Page 6766]]

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-2008-11. 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 on official 
business days between the hours of 10 a.m. and 3 p.m. Copies of such 
filing will also 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 No. SR-NYSEArca-2008-11 and should be submitted on or before 
February 26, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Florence E. Harmon,
Deputy Secretary.
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    \12\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E8-1987 Filed 2-4-08; 8:45 am]

BILLING CODE 8011-01-P