Document ID: SEC-2006-1424-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NYSE Arca, Inc.
Posted Date: 2006-11-06T05:00Z

[Federal Register: November 6, 2006 (Volume 71, Number 214)]
[Notices]               
[Page 65023-65024]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06no06-72]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54673; File No. SR-NYSEArca-2006-78]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending Market 
Maker Transaction Fees and Credits

October 30, 2006.
    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 October 23, 2006, NYSE Arca, Inc. (the ``Exchange''), through its 
wholly-owned subsidiary NYSE Arca Equities, Inc. (``NYSE Arca 
Equities''), 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. The 
Exchange has designated this proposal as one establishing or changing a 
due, fee, or other charge imposed by the Exchange under 19(b)(3)(A)(ii) 
of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders it 
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

    The Exchange proposes to amend the section of its Schedule of Fees 
and Charges for Exchange Services (the ``Fee Schedule'') that applies 
to Market Maker \5\ fees and charges. The text of the proposed rule 
change is available on the Exchange's Web site (http://www.nysearca.com
), at the Exchange's Office of the Secretary, and at 

the Commission's Public Reference Room.
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    \5\ See NYSE Arca Equities Rule 1.1(u).
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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 Exchange proposes to amend the section of its Fee Schedule that 
applies to Market Maker fees and charges.
    Market Maker Transaction Fees and Credits--Round Lots. The Fee 
Schedule currently provides that Market Makers are entitled to a $0.001 
per share credit for round-lot transactions in NYSE-listed securities. 
This credit is applicable to Q orders executed against other 
participants' orders. The Exchange proposes to amend the Fee Schedule 
to increase this credit to $0.002 per share and to clarify that it will 
apply to orders that provide liquidity to the NYSE Arca Book (the 
``Book'') in securities for which the Market Makers are registered as 
Market Makers. The Exchange proposes this change so that the credit 
given to Market Makers is consistent with the $0.002 per share credit 
given to all ETP Holders \6\ executing round-lot transactions in NYSE-
listed securities in the Book against inbound orders. The Exchange 
further proposes this change so that the credit given to Market Makers 
submitting such orders in NYSE-listed securities is the same as the 
credit given to Market Makers submitting such orders in other listed 
securities and Nasdaq securities.
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    \6\ See NYSE Arca Equities Rule 1.1(n).
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    The Fee Schedule currently provides that the $.002 per share credit 
that Market Makers are entitled to for round-lot transactions in listed 
securities (other than NYSE-listed securities) and Nasdaq securities 
applies to Q orders executed against other participants' orders. The 
Exchange proposes to amend this language to clarify that the credit 
applies to orders that provide

[[Page 65024]]

liquidity to the Book in securities for which the Market Makers are 
registered as Market Makers. The Exchange proposes this language so 
that the application of this credit is consistent with the application 
of the credit for Market Makers and other ETP Holders executing round-
lot transactions in NYSE-listed securities.
    The Fee Schedule currently does not specifically set forth a fee 
for Market Maker round-lot transactions in NYSE-listed securities, 
other listed securities or Nasdaq securities that take liquidity from 
the Book. The Exchange proposes to amend the Fee Schedule to set forth 
a $.003 per share fee for all such orders. The Exchange proposes this 
change so that it is clear that Market Makers are subject to the same 
$.003 per share fee that is charged to all ETP Holders executing round-
lot transactions in NYSE-listed securities, other listed securities, 
and Nasdaq securities that take liquidity from the Book.
    Market Maker Transaction Fees and Credits--Odd Lots. The Fee 
Schedule currently provides that Market Makers are entitled to a $0.02 
per share credit for transactions in Nasdaq securities that execute 
against odd-lot orders in the Odd Lot Tracking Order Process, as 
defined in NYSE Arca Equities Rule 7.31(g). The Exchange proposes to 
eliminate this credit because the Exchange no longer wishes to provide 
the additional financial incentive to Market Makers for providing 
liquidity in Nasdaq odd-lot transactions.
    Lead Market Maker Transaction Fees and Credits--Odd Lots. The Fee 
Schedule currently provides that Lead Market Makers \7\ executing odd-
lot transactions in NYSE Arca Marketplace primary listed securities are 
entitled to a $0.02 per share credit for such transactions. The 
Exchange proposes to amend the Fee Schedule to clarify that such credit 
applies to orders that provide liquidity to the Book in securities for 
which the Lead Market Maker is registered as the Lead Market Maker. The 
Exchange proposes this change in order to make the application of this 
credit consistent with the application of the transaction credits to 
Market Makers and ETP Holders generally.
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    \7\ See NYSE Arca Equities Rule 1.1(ccc).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
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 an 
equitable allocation of reasonable dues, fees and other charges among 
its members and issuers 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 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 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 rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act \10\ and subparagraph (f)(2) of Rule 19b-4 
\11\ thereunder. 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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    \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-2006-78 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2006-78. 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 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-NYSEArca-2006-78 and should be submitted on or before 
November 27, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
Nancy M. Morris,
Secretary.
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    \12\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E6-18632 Filed 11-3-06; 8:45 am]

BILLING CODE 8011-01-P