Document ID: SEC-2006-1561-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2006-12-05T05:00Z

[Federal Register: December 5, 2006 (Volume 71, Number 233)]
[Notices]               
[Page 70575-70577]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05de06-88]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54837; File No. SR-NYSE-2006-102]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to the Inclusion of an Additional Security in the Pilot to Put 
Into Operation Certain Rule Changes Pending Before the Securities and 
Exchange Commission to Coincide With the Exchange's Implementation of 
Phase 3 of the NYSE HYBRID MARKETSM and the Substitution of 
the Name and Trading Symbol of a Security Operating in the Pilot A

November 29, 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 November 28, 2006, the New York Stock Exchange LLC (``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 substantially prepared by the 
Exchange. NYSE filed the proposed rule change pursuant to Section 
19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) 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)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to include an additional security to 
participate in the Exchange's current pilot (``Pilot'') program which 
puts into operation certain rule changes pending before the Commission 
to coincide with the Exchange's implementation of NYSE HYBRID 
MARKETSM (``Hybrid Market'') \5\ Phase 3. The Exchange 
further seeks to change the name of a security currently operating 
under the Pilot and substitute the name and trading symbol of its 
successor entity. The relevant securities are identified in Exhibit 3 
to the filing, which is available on the NYSE's Web site (http://www.nyse.com
), at the principal office of the NYSE, and at the 

Commission's Public Reference Room.
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    \5\ The Hybrid Market was approved on March 22, 2006. See 
Securities Exchange Act Release No. 53539 (March 22, 2006), 71 FR 
16353 (March 31, 2006).
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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. 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
    On October 5, 2006, the Commission approved an Exchange Pilot \6\ 
to, among other things, put into operation certain proposed 
modifications to Exchange Rules that are currently pending \7\ before 
the Commission to coincide with the Exchange's implementation of the 
Hybrid Market Phase 3. The Pilot commenced on October 6, 2006 \8\ and 
is scheduled to terminate on the close of business November 30, 2006 
\9\ or the earlier of Commission approval of the Omnibus Filing,\10\ 
Stabilization Filing and the Block Cross Filing while the Commission 
continues to review the aforementioned pending filings. The Pilot 
applies to a group of securities, known as Phase 3 Pilot securities 
(``Pilot securities'').\11\
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    \6\ See Securities Exchange Act Release Nos. 54578, 71 FR 60216 
(October 12, 2006) and 54610 (October 16, 2006), 71 FR 62142 
(October 23, 2006).
    \7\ See Securities Exchange Act Release Nos. 54520 (September 
27, 2006), 71 FR 57590 (September 29, 2006) (SR-NYSE-2006-65 and the 
Amendments thereto proposing to amend several Exchange Rules to 
clarify certain definitions and systemic processes (``Omnibus 
Filing'')); 54504 (September 26, 2006), 71 FR 57011 (September 28, 
2006) (SR-NYSE 2006-76 proposing to amend the specialist 
stabilization requirements set forth in Exchange Rule 104.10 
(``Stabilization Filing'')); and SR-NYSE-2006-73 (filed on September 
13, 2006) and Amendment No. 2 thereto (filed on October 13, 2006) 
(proposing to amend Exchange Rule 127 which governs the execution of 
a block cross transaction at a price outside the prevailing NYSE 
quotation (``Block Cross Filing''). The Commission notes that it 
approved the Omnibus Filing on November 27, 2006. See Securities 
Exchange Act Release No. 54820.
    \8\ The changes related to stop orders and stop limit orders 
proposed in the Omnibus Filing were implemented on October 16, 2006 
in order to give customers and member organizations sufficient time 
to make any changes necessary as a result of the elimination of stop 
limit orders.
    \9\ On October 31, 2006 the Exchange filed to extend the Pilot 
until November 30, 2006. See Securities Exchange Act Release No. 
54675 (October 31, 2006), 71 FR 65019 (November 6, 2006). The 
extension made clear that approval of any one of the pending filings 
would act to terminate the operation of the rules associated with 
the approved filing from the Pilot. Accordingly, the changes 
approved in the Omnibus Filing are no longer part of the Pilot. The 
Pilot shall not terminate in its entirety unless and until all 
pending filings are approved or November 30, 2006.
    \10\ See note 7 supra.
    \11\ Phase 3 Pilot Securities are posted on the Exchange's Web 
site. The securities posted on the Exchange's Web site include 
securities added to operate under the Pilot pursuant to Securities 
Exchange Act Release No. 54685 (November 1, 2006), 71 FR 65559 
(November 8, 2006).
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    The Exchange is currently in the process of phasing in the 
securities operating under the Pilot. As expected, the Pilot is 
operating with minimal problems and the benefits are proving 
invaluable. The Pilot is providing the Exchange with the opportunity to 
identify and address any system problems. Moreover, the Exchange has 
the ability to identify and incorporate beneficial system changes that 
become apparent as a result of usage in real time and under real market 
conditions.

[[Page 70576]]

    The Exchange further has the ability to have real time user 
interface which is proving very useful to the Exchange. In addition to 
its usefulness to the Exchange, the Pilot is providing the current 
users with essential practical experience with the new systems and 
processes in a well-modulated way, in real time and under real market 
conditions that cannot be completely replicated in the mock-trading 
environment.
    As of Tuesday November 28, 2006, the Exchange will complete the 
phasing in of all Banc of America Specialists allocated securities 
approved to operate under the Pilot. In order to continue increasing 
the users that may benefit from the enhanced educational and 
supervisory training experience that the Pilot provides, the Exchange 
seeks through this filing to include an additional security handled by 
Banc of America Specialists for participation in the Pilot. 
Specifically, the Exchange seeks to include the security traded under 
the symbol GE (General Electric Company).
    The Exchange believes that the addition of this security will 
continue to provide an increased number of individual specialists with 
the educational opportunity of real time experience under real market 
conditions that cannot be completely replicated in the mock-trading 
environment. It will further provide an increased number of the firm's 
supervisory personnel with additional opportunities for supervisory 
training in real time and under real market conditions.
    In addition to including GE in the Pilot, the Exchange seeks to 
substitute the trading symbol for Lucent Technologies which is 
currently operating in the Pilot under the trading symbol LU with the 
symbol ALU to reflect the December 1, 2006 business combination of 
Lucent Technologies with Alcatel. The Exchange therefore seeks to 
change the trading symbol LU to ALU in order to accurately reflect the 
successor entity which is now Alcatel-Lucent.
    Accordingly, the Exchange believes that the inclusion of this 
additional security will only further the Exchange's ability to 
identify and address any system problems and to identify and 
incorporate beneficial system changes while providing the new users 
with real time education.
    The securities proposed for inclusion in the Pilot are identified 
in Exhibit 3 to the filing.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirement under Section 6(b)(5) \12\ of the Act \13\ that an 
Exchange have rules that are designed to promote just and equitable 
principles of trade, to remove impediments to and perfect the mechanism 
of a free and open market and a national market system, and, in 
general, to protect investors and the public interest. The proposed 
rule change also is designed to support the principles of Section 
11A(a)(1) \14\ in that it seeks to assure economically efficient 
execution of securities transactions.
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    \12\ 15 U.S.C. 78f(b)(5).
    \13\ 15 U.S.C. 78a.
    \14\ 15 U.S.C. 78k-1(a)(1).
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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 proposed rule change is filed pursuant to Section 19(b)(3)(A) 
\15\ of the Act and Rule 19b-4(f)(6) \16\ thereunder.
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
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    This proposed rule change does not significantly affect the 
protection of investors or the public interest and does not impose any 
significant burden on competition. Accordingly, the Exchange believes 
that this amendment is non-controversial.
    In connection with the filing being made under Section 19(b)(3)(A) 
of the Act, the Exchange requests that the Commission waive the 30-day 
delayed operative date and five-day pre-filing period of Rule 19b-
4(f)(6)(iii).
    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \17\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay and designate the proposed 
rule change immediately operative upon filing. The Commission is 
exercising authority to waive the five-day pre-filing requirement and 
believes that waiver of the 30-day operative delay is consistent with 
the protection of investors and the public interest. Specifically, the 
Commission believes that the proposal could allow Banc of America 
Specialists to provide more of its personnel with the educational 
opportunity of real-time experience with real market conditions under 
the Pilot. In addition, the Commission believes that replacing LU with 
ALU is appropriate so that the successor security to LU would continue 
to trade in a similar manner on the Exchange. Accordingly, the 
Commission designates the proposal to be effective and operative upon 
filing with the Commission.\18\
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    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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    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.

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-NYSE-2006-102 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-NYSE-2006-102. 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

[[Page 70577]]

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-
NYSE-2006-102 and should be submitted on or before December 26, 2006. 

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-20517 Filed 12-4-06; 8:45 am]

BILLING CODE 8011-01-P