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Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving Proposed Rule Change and Amendment No. 1 Thereto Relating to Its Regulatory Oversight Committee

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Start Preamble December 21, 2006.

On September 21, 2006, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) [1] and Rule 19b-4 thereunder,[2] a proposed rule change to amend NYSE Arca Rule 3.3 to provide that the Exchange's Regulatory Oversight Committee (the “ROC”) shall be comprised of at least three Public Directors, rather than all the Public Directors. On October 20, 2006, the Exchange filed Amendment No. 1 to the proposed rule change. The proposed rule change, as amended, was published for comment in the Federal Register on October 27, 2006.[3] The Commission received no comments regarding the proposal.

The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange [4] and, in particular, the requirements of Section 6(b)(5) of the Act.[5] Section 6(b)(5) requires, among other things, that the rules of an exchange be designed to prevent fraudulent and manipulative acts, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. The Commission notes that the proposed rule change, by establishing a minimum committee size for the ROC, would allow the Exchange to reduce the ROC to three members. The Commission notes that the proposed rule change would retain the requirement that all members of the ROC be Public Directors.[6] Accordingly, the Commission finds that the proposed rule change, as amended, is consistent with the Act.

It is therefore ordered, pursuant to Section 19(b)(2) of the Act,[7] that the proposed rule change (SR-NYSEArca-2006-58), as amended, is approved.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[8]

Florence E. Harmon,

Deputy Secretary.

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3.  See Securities Exchange Act Release No. 54638 (October 23, 2006), 71 FR 63059.

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4.  In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).

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6.  NYSE Arca's By-Laws define a “Public Director” as a person from the public who will not be, or be affiliated with, a broker-dealer in securities or employed by, or involved in any material business relationship with, the Exchange or its affiliates. See Section 3.02 of the NYSE Arca By-Laws.

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[FR Doc. E6-22261 Filed 12-27-06; 8:45 am]