Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)  and Rule 19b-4 thereunder, notice is hereby given that on September 29, 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 NYSE Arca. The Exchange submitted the proposed rule change under Section 19(b)(3)(A) of the Act  and Rule 19b-4(f)(2) thereunder, 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.
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 ETP Holders  executing certain round-lot transactions in NYSE-listed (Tape A) equity securities (other than Exchange Traded Fund (“ETF”) securities) on the Exchange. While changes to the Fee Schedule pursuant to this proposal are effective upon filing, the new rates became operative on October 1, 2006. The text of the proposed rule change is available on the Exchange's Web site at http://www.nysearca.com, at the Exchange's Office of the Secretary and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NYSE Arca 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
The Exchange proposes to amend the section of its Fee Schedule that applies to ETP Holders executing certain round-lot transactions in NYSE-listed (Tape A) equity securities (other than ETF securities) on the Exchange.
The Fee Schedule currently provides that no transaction fee will be charged to ETP Holders for round-lot orders in NYSE-listed equity securities (other than ETF securities) that are executed in the NYSE Arca Book against inbound orders. The Exchange proposes to amend the Fee Schedule to provide that ETP Holders will be entitled to a $0.002 per share credit for such orders. The Exchange proposes to offer this credit in order to compete more effectively with other exchanges that are offering liquidity rebates in NYSE-listed equity securities.
The Exchange's Fee Schedule currently provides that a transaction fee of $0.001 per share will be charged to ETP Holders for round-lot orders in NYSE-listed equity securities (other than ETFs) that take liquidity from the NYSE Arca Book. The Exchange proposes to amend the Fee Schedule to provide that ETP Holders will be charged $0.003 per share for such orders, including orders received through the Intermarket Trading System (“ITS”). In addition, the Exchange proposes to amend footnote 1 to the Fee Schedule to note that such fees will apply to orders received through ITS. The Exchange proposes to increase this fee in order to offset the proposed credit for round-lot orders in NYSE-listed equity securities (other than ETF securities) that are executed in the NYSE Arca Book against inbound orders, as described above.Start Printed Page 65562
The Exchange will continue to charge $0.001 per share for round-lot orders in NYSE-listed equity securities (other than ETF securities) routed outside the NYSE Arca Book.
2. Statutory Basis
The Exchange believes that its proposed rule change is consistent with Section 6(b) of the Act, in general, and furthers the objectives of Section 6(b)(4) of the Act, in particular, regarding the equitable allocation of reasonable dues, fees, and other charges among exchange members and other persons using exchange facilities.
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 comments on the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
The proposed rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act  and subparagraph (f)(2) of Rule 19b-4 thereunder, because it establishes or changes a due, fee, or other charge imposed by NYSE Arca. 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:
- Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
- Send an e-mail to firstname.lastname@example.org. Please include File Number SR-NYSEArca-2006-68 on the subject line.
- 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-2006-68. 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 offices 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-2006-68 and should be submitted on or before November 29, 2006.Start Signature
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Nancy M. Morris,
5. See NYSE Arca Equities Rule 1.1(n).Back to Citation
6. Since October 1, 2006, the effective date of the “Plan for the Purpose of Creating and Operating an Intermarket Communications Linkage Pursuant to Section 11A(a)(3)(B) of the Securities Exchange Act of 1934” (“Linkage Plan”), connectivity between markets is provided pursuant to the Linkage Plan. The current ITS technology is used to effectuate both the ITS Plan and Linkage Plan. Therefore, the term “ITS” applies to the technology used to effectuate both the ITS Plan and the Linkage Plan.Back to Citation
[FR Doc. E6-18829 Filed 11-7-06; 8:45 am]
BILLING CODE 8011-01-P