Document ID: SEC-2007-0972-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NYSE Arca, Inc.
Posted Date: 2007-07-18T04:00Z

[Federal Register: July 18, 2007 (Volume 72, Number 137)]
[Notices]               
[Page 39477-39479]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18jy07-124]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56057; File No. SR-NYSEArca-2006-82]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change Relating to Amendments to NYSE Arca Equities 
Rules 2.16 and 4.5 Relating to Certain ETP Holder Administrative 
Procedures

July 12, 2007.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on November 7, 2006, NYSE Arca, Inc. (``NYSE Arca'' or the 
``Exchange''), through its wholly owned subsidiary NYSE Arca Equities, 
Inc. (``NYSE Arca Equities'' or the ``Corporation''), filed with the 
Securities and Exchange Commission (``Commission'' or ``SEC'') the 
proposed rule change as described in Items I, II and III below, which 
Items have been substantially prepared by the Exchange. The Commission 
is publishing this notice to solicit comment 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.
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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 NYSE Arca Equities Rules 2.16 and 4.5(b) 
and (c). The text of the proposed rule change is set forth below. 
Italicized text indicate additions; brackets indicate deletions.

Rule 2.16 Amendments to ETP Holder Documents

    (a) All formation documents for ETP Holders for which NYSE Arca, 
Inc. is the Designated Examining Authority, such as articles of 
incorporation, by-laws, partnership agreements, limited liability 
company agreements, and all amendments thereto, now in effect or 
adopted in the future, shall be filed with the Corporation and shall be 
subject to approval by the Corporation.

Rule 4.5(b) Part II Quarterly Reports

    [Two manually signed copies of] Part II of SEC Form X-17A-5 shall 
be filed electronically with, and in a manner prescribed by, the 
Corporation for each calendar quarter by any ETP Holder which carries 
or clears accounts for customers. Such report shall be due by the 
seventeenth business day following the end of the calendar quarter 
being reported upon. Original copies of such reports with manual 
signatures shall be maintained by the ETP Holder in accordance with 
NYSE Arca Equities Rule 2.24.

Rule 4.5(c) Part IIA Quarterly Reports

    [Two manually signed copies of] Part IIA of SEC Form X-17A-5 shall 
be filed electronically with, and in a manner prescribed by, the 
Corporation for each calendar quarter by any ETP Holder which does not 
carry or clear accounts for customers. Such report shall be due by the 
seventeenth business day following the end of the calendar quarter 
being reported upon. Original copies of such reports with manual 
signatures shall be maintained by the

[[Page 39478]]

ETP Holder in accordance with NYSE Arca Equities Rule 2.24.

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 self-regulatory organization 
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 self-regulatory organization 
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 NYSE Arca Equities Rules 2.16 and 
4.5(b) and (c) in order to simplify the administrative procedures that 
Equity Trading Permit (``ETP'') Holders \3\ must follow. The Exchange 
believes that such amendments will not compromise the Exchange's 
ability to regulate its ETP Holders.
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    \3\ See NYSE Arca Equities Rule 1.1(n).
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    NYSE Arca Equities Rule 2.16 currently provides that all ETP 
Holders must file their formation documents with the Corporation. The 
Exchange proposes to amend NYSE Arca Equities Rule 2.16 in order to 
provide that only those ETP Holders for which the Exchange is the 
Designated Examining Authority must submit such formation documents to 
the Corporation. The Exchange believes that it is duplicative and 
unnecessary for an ETP Holder to submit documentation relating to its 
organizational structure to more than one SRO for review. Further, to 
the extent an ETP Holder is required to send organizational documents 
only to one SRO for review, NYSE Arca believes that the most 
appropriate SRO to perform that review is the ETP Holder's Designated 
Examining Authority.
    NYSE Arca Equities Rule 4.5(b) currently requires ETP Holders that 
carry or clear accounts for customers to file two manually signed 
copies of Part II of SEC Form X-17A-5 with the Corporation on a 
quarterly basis. The Exchange proposes to amend NYSE Arca Equities Rule 
4.5(b) to provide that such reports shall be filed electronically with 
the Corporation, rather than manually, and that the ETP Holder shall 
maintain original copies of such reports with manual signatures in 
accordance with NYSE Arca Equities Rule 2.24.\4\
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    \4\ NYSE Arca Equities Rule 2.24 provides that each ETP Holder 
must make, keep current and preserve such books and records as the 
Exchange may prescribe and as may be prescribed by the Securities 
Exchange Act of 1934 (the ``Exchange Act'') and the rules and 
regulations thereunder (including any interpretation relating 
thereto) as though such ETP Holders were brokers or dealers 
registered with the SEC pursuant to Section 15 of the Exchange Act.
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    NYSE Arca Equities Rule 4.5(c) currently requires ETP Holders that 
do not carry or clear accounts for customers to file two manually 
signed copies of Part IIA of SEC Form X-17A-5 with the Corporation on a 
quarterly basis. The Exchange proposes to amend NYSE Arca Equities Rule 
4.5(c) to provide that such reports shall be filed electronically with 
the Corporation, rather than manually, and that the ETP Holder shall 
maintain original copies of such reports with manual signatures in 
accordance with NYSE Arca Equities Rule 2.24.\5\
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    \5\ Id.
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    The Exchange proposes amending NYSE Arca Equities Rule 4.5(b) and 
(c) to codify procedural changes that have been implemented by the 
Exchange and to be consistent with guidance that has been provided 
previously to ETP Holders.
(2) Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
section 6(b) of the Exchange Act,\6\ in general, and furthers the 
objectives of section 6(b)(5) \7\ in particular in that it is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, and to remove impediments to and perfect the mechanism of a 
free and open market and a national market system.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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 Exchange 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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve the proposed modifications, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-2006-82 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-2006-82. 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

[[Page 39479]]

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, 100 F Street, NE., Washington, DC 20549, on official 
business days between the hours of 10 a.m. and 3 p.m. 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-2006-82 and should be submitted on or before 
August 8, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E7-13882 Filed 7-17-07; 8:45 am]

BILLING CODE 8010-01-P