Document ID: SEC-2007-0096-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NYSE Arca, Inc.
Posted Date: 2007-01-22T05:00Z

[Federal Register: January 22, 2007 (Volume 72, Number 13)]
[Notices]               
[Page 2720-2721]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22ja07-112]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55099; File No. SR-NYSEArca-2006-91]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to 
Exchange Fees and Charges

January 12, 2007.
    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 22, 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 substantially prepared by the Exchange. NYSE Arca has 
designated this proposal as one establishing or changing a due, fee, or 
other charge imposed by NYSE Arca under Section 19(b)(3)(A)(ii) 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)(ii).
    \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

    NYSE Arca is proposing to amend its Schedule of Fees and Charges 
for Exchange Services (``Schedule'') in order to revise certain Royalty 
Fees assessed on options contracts traded on certain Exchange Traded 
Funds (``ETFs''), and to revise the Marketing Charge related to Market 
Maker transactions.
    Below is the text of the proposed rule change. Proposed new 
language is in italics; deleted language is in [brackets].
NYSE Arca Options: Trade-Related Charges
* * * * *
Marketing Charge
    For Nasdaq-100 Tracking Stock Options (QQQQ) $0.95 per contract 
side on all Market Maker transactions (excluding Market Maker to Market 
Maker transactions) and for Standard and Poor's Depository Receipts 
(SPY) $1.00 per contract side on all Market Maker transactions 
(excluding Market Maker to Market Maker transactions).
    For all other NYSE Arca Equity Options: [$0.45] $0.65 per contract 
side on transactions of Lead Market Makers and Market Makers against 
all public customer orders.
Royalty Fees \9\
    [For] Nasdaq Fidelity Composite Index ETF (ONEQ): $0.12[per 
contract side]

Financial Select Sector SPRD (XLF)...........................  $0.10 \5\
Technology Select Sector SPDR (XLK)..........................       0.10
Healthcare Select Sector SPDR (XLV)..........................       0.10
Russell 2000 Index (RUT).....................................       0.15

\5\ The Exchange inadvertently failed to designate the phrase ``.10'' in
  this line as proposed new text. For clarity, the new text has been
  underlined herein.

    Royalty Fees will be assessed on a per-contract basis for firm, 
broker/dealer, and Market Maker transactions. [For IWB, IWD, IWM, IWN, 
IWO, IWR: $0.10 per contract for firm, broker/dealer, and Market Maker 
transactions.]
* * * * *
    \9\[This] These fees will not be assessed on the customer side 
of transactions. Please refer to ``Limit of Fees on Options Strategy 
Executions'' section of this schedule for information regarding 
[r]Royalty [f]Fees associated with Options Strategy Executions

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. NYSE Arca has substantially 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
    NYSE Arca is proposing to amend its Schedule in order to make the 
following changes to certain fees and charges that are assessed to OTP 
Holders and OTP Firms. The Exchange also proposes making minor 
technical changes to the Schedule at this time.

Royalty Fees

    The Exchange proposes to eliminate the $0.10 per contract Royalty 
Fee on options traded on the following ETFs: the Russell 1000 Index 
Fund (IWB); the Russell 1000 Value Index Fund (IWD); the Russell 2000 
Index Fund (IWM); the Russell 2000 Value Index Fund (IWN); the Russell 
2000 Growth Fund (IWO); and the Russell Midcap Index fund (IWR). As of 
January 1, 2007, the Exchange will no longer assess the $0.10 per 
contract on any transactions involving the aforementioned ETFs.
    The Exchange proposes to begin assessing a $0.10 per contract 
Royalty Fee on options traded on the following ETFs: the Financial 
Select Sector SPDR (XLF); the Technology Select Sector SPDR (XLK); and 
the Healthcare Select Sector SPRD (XLV). The Exchange also proposes a 
$0.15 per contract Royalty Fee on options traded on the Russell 2000 
Index (RUT). The Exchange will begin assessing these fees on 
transactions in the aforementioned ETFs as of January 1, 2007.

Marketing Fees

    The Exchange presently assesses Market Makers \6\ a per contract 
Marketing Fee on all transactions involving public customer orders. For 
orders in the NASDAQ-100 Tracking Stock (QQQQ), the Exchange charges 
Market Makers $0.95 per contract; in the Standard and Poor's Depository 
Receipts (SPY), the Exchange charges $1.00 per contract. In all other 
issues, the Exchange charges Market Makers $0.45 per contract. The 
Exchange now proposes to amend the fee it charges on non-QQQQ and non-
SPY transactions to $0.65 cents per contract. The fee on QQQQ and SPY 
orders will remain the same. The increased Marketing Fee will be used 
to attract additional order flow to the Exchange, thereby allowing NYSE 
Arca to remain competitive with other

[[Page 2721]]

options exchanges that charge similar fees.
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    \6\ Market Maker, as defined in NYSE Arca Rule 6.1(b)(29) and 
NYSE Arca Rule 6.1A(a)(4).
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    While this proposed rule change will become effective upon filing 
with the Commission, NYSE Arca plans to implement the fee change on 
January 1, 2007.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\7\ in general, and Section 6(b)(4) of the 
Act,\8\ in particular, in that it provides for the equitable allocation 
of reasonable dues, fees, and other charges among its members.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 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

    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

    The foregoing proposed rule change has been designated as a fee 
change pursuant to Section 19(b)(3)(A)(ii) of the Act \9\ and Rule 19b-
4(f)(2) \10\ thereunder, because it establishes or changes a due, fee, 
or other charge imposed by the Exchange. Accordingly, the proposal will 
take effect upon filing with the Commission. 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 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-2006-91 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-NYSEArca-2006-91. 
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 office of NYSE Arca. 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-2006-91 and should be submitted on or before 
February 12, 2007.

    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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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-799 Filed 1-19-07; 8:45 am]

BILLING CODE 8011-01-P