Document ID: SEC-2008-0561-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2008-04-11T04:00Z

[Federal Register: April 11, 2008 (Volume 73, Number 71)]
[Notices]               
[Page 19921-19923]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11ap08-121]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57624; File No. SR-NYSEArca-2008-38]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 
Thereto To Amend the Schedule of Fees and Charges for Exchange Services 
That Apply To Orders Submitted by ETP Holders

April 4, 2008.
    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 March 31, 2008, NYSE Arca, Inc. (``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 substantially by the 
Exchange. On April 2, 2008, the Exchange filed Amendment No. 1. The 
Exchange has designated this proposal as one establishing or changing a 
member due, fee, or other charge imposed by the Exchange under section 
19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ 
which renders the proposed rule change effective upon filing with the 
Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change, as amended, 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 (``Fee Schedule'') that applies to 
orders submitted by ETP Holders.\5\ While changes to the Fee Schedule 
pursuant to this proposal will be effective upon filing, the changes 
will become operative on April 1, 2008. The text of the proposed rule 
change is available on the Exchange's Web site at http://www.nyse.com, 
the Exchange's Office of the Corporate Secretary, and the Commission's 
Public Reference Room.
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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
    As part of its continuing efforts to enhance participation on the 
Exchange, NYSE Arca Equities proposes to amend the relevant sections of 
its Fee Schedule that apply to rebates provided to ETP Holders that 
submit orders which provide liquidity on NYSE Arca Equities for equity 
securities listed on the NASDAQ Stock Market LLC (``Nasdaq''), commonly 
referred to as Tape C securities, or equity securities listed on the 
New York Stock Exchange LLC (``NYSE''), commonly referred to as Tape A 
securities. Primarily, these changes will increase the rebate (or 
credit) earned by ETP Holders for providing significant liquidity in 
either Tape A or Tape C securities. Specifically, the Exchange proposes 
amending its existing volume tier structure and creating new volume-
based tiers in order to offer increased rebates for orders that provide 
liquidity and decreased fees for orders that take liquidity, if certain 
volume thresholds are met.
Tape C
Credits
    Currently, the credit for round lot orders of Tape C securities 
that provide liquidity is $0.002 per share, unless certain volume 
thresholds are met, in

[[Page 19922]]

which case the rebate increases to $.0024 per share. With this filing, 
the Exchange proposes to increase the present, tier 1, volume threshold 
rebate from $.0024 per share to $.0025 where an ETP Holder (i) 
transacts an average daily share volume per month greater than 30 
million shares (including transactions that take liquidity, provide 
liquidity, or route to away market centers) and also (ii) provides 
liquidity an average daily share volume per month greater than 15 
million shares. The Exchange also proposes to offer, for Tape C 
securities, a $0.0026 per share credit if certain additional, tier 2, 
volume thresholds are met. Specifically, if an ETP Holder (i) transacts 
an average daily share volume per month greater than 60 million shares 
(including transactions that take liquidity, provide liquidity, or 
route to away market centers) and also (ii) provides liquidity an 
average daily share volume per month greater than 30 million, then the 
ETP Holder will earn a credit of $.0026 per share. The $.0026 per share 
credit will apply for an ETP Holder's orders that provide liquidity up 
to 75 million average daily shares. All volume in excess of 75 million 
average daily shares per month will earn a per share credit of $.0025.
Fees
    Currently, the per share charge for inbound orders executed against 
orders residing in the Book is $.0025. The Exchange hereby proposes 
increasing this fee to $.0026.
    Also, where ETP Holders satisfy the new, tier 2, volume thresholds, 
the Exchange proposes to offer a reduced per share charge of $.00245 
for inbound orders in Tape C securities executed against orders 
residing in the Book.
    Finally, where ETP Holders meet both the revised tier 1 volume 
thresholds and the new tier 2 volume thresholds, the Exchange will 
offer a reduced per share charge of $.0026 for orders in Tape C 
securities routed away and executed by another market center or 
participant compared to the standard $.0035 per share.
Tape A
Credits
    Currently, ETP Holders receive a $.0025 credit for round lot orders 
of Tape A securities that provide liquidity to the Book for which they 
are registered as the ETP Holder. The Exchange hereby proposes to 
implement a new Tape A rebate tier by offering an increased per share 
credit of $.0028 when certain volume thresholds are met. Specifically, 
if an ETP Holder provides liquidity an average daily share volume per 
month greater than 30 million shares, then the ETP Holder will earn a 
credit of $.0028 per share for its orders that provide liquidity. This 
$.0028 per share credit will apply for an ETP Holder's orders that 
provide liquidity up to 100 million average daily shares. All volume in 
excess of 100 million average daily shares per month will earn the 
standard per share credit of $.0025.
    In addition, the Exchange proposes to charge a routing fee in 
connection with Primary Sweep Orders (``PSOs'') that are routed to 
NYSE. Currently, PSOs for NYSE-listed securities are exempt from the 
$.001 per share routing fee charged for orders in NYSE-listed 
securities routed to the NYSE. The Exchange now proposes to charge ETP 
Holders $.0006 per share for PSOs in NYSE-listed securities for such 
orders that are routed outside the Book to the NYSE. The Exchange 
proposes this nominal fee as a reasonable means to balance its attempt 
to offer an attractive fee structure to its Users \6\ while ensuring 
that this order type is not open to abuse by Users attempting to gain 
free access to certain away market centers, such as the NYSE.
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    \6\ See NYSE Arca Equities Rule 1.1(yy).
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    The Exchange will also renumber certain footnotes contained within 
the Fee Schedule.
    While changes to the Fee Schedule pursuant to this proposal will be 
effective upon filing, the changes will become operative on April 1, 
2008.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
section 6(b) of the Act,\7\ in general, and furthers the objectives of 
section 6(b)(4),\8\ in particular, in that it is intended to provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and other persons using its facilities. The 
Exchange believes that the proposed fees and credits are reasonable. 
The proposed rates are part of the Exchange's effort to attract and 
enhance participation on the Exchange, by offering increased credits 
and decreased fees where certain volume thresholds are satisfied. The 
Exchange also believes that the proposed changes to the Fee Schedule 
are equitable in that they apply uniformly to our Users. Finally, the 
Exchange believes that the proposed routing fee for PSOs is also both 
reasonable and equitable, in that it is a reasonable means to balance 
the Exchange's attempt to offer an attractive fee structure to its 
Users while ensuring that this order type is not open to abuse by Users 
attempting to gain free access to certain away market centers, such as 
the NYSE.
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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 become effective upon filing 
pursuant to section 19(b)(3)(A) 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. 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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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \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-2008-38 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-2008-38. This

[[Page 19923]]

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, 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 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 publicly available. All 
submissions should refer to File Number SR-NYSEArca-2008-38 and should 
be submitted on or before May 2, 2008.

    For the Commission, by the Division of Trading and Markets, 
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. E8-7697 Filed 4-10-08; 8:45 am]

BILLING CODE 8011-01-P