[Federal Register Volume 65, Number 242 (Friday, December 15, 2000)]
[Notices]
[Pages 78522-78523]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31996]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43694; File No. SR-NYSE-00-56]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the New York Stock Exchange, 
Inc., Relating to the Adoption of Transaction Fees

December 8, 2000.
    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 December 7, 2000, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the 
Exchange. 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.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange proposes to adopt a specific transaction fee schedule 
to apply to investment company units listed under Section 703.16 of the 
Exchange's Listed Company Manual. The text of the proposed rule change 
is available upon request from the Office of the Secretary, the NYSE or 
the Commission.

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
    The Exchange anticipants that it will shortly list investment 
company units (more generally known as an exchange traded fund or ETF) 
based on the S&P Global 100 Index. The Exchange expects to list 
additional ETFs thereafter. Given that it is the practice in the 
industry to charge relatively nominal listing fees for ETFs, it is 
important for the Exchange to realize revenue from transaction fees on 
ETFs to support its entry into this market. Accordingly, the Exchange 
will impose a specific transaction fee schedule on ETFs, as follows:
    On-Floor proprietary transactions (specialist and other)--$0.63 per 
100 shares, capped at $300 per trade.
    Off-Floor transactions (customer and broker/dealer)--$0.60 per 100 
shares, capped at $100 per trade.
    In addition, it should be noted that the Exchange's transaction 
charge exemption for system orders, currently covering orders up to 
2,099 shares, will be extended to orders up to 5,099 shares in ETFs.
    The NYSE Constitution provides that transaction fees on stocks and 
bonds will not exceed 2% of a member firm's commissions.\3\ ETFs are a 
unique form of derivative security and therefore not subject to this 
Constitutional limitation. This is consistent with treatment afforded 
to standardized options when they were listed on the Exchange, and to 
other unique products such as the Exchange Stock Portfolios, a basket 
trading mechanism offered approximately a decade ago.
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    \3\ The NYSE reconfirmed its Board's discretion under Article X, 
Section 4 of the NYSE Constitution to impose transaction fees on its 
members. Telephone conversation between James Duffy, Senior Vice 
President and Deputy General Counsel, NYSE, and Deborah Flynn, 
Senior Special Counsel, Division of Market Regulation, Commission, 
December 7, 2000.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act \4\ in general, and furthers the objectives of 
Section 6(b)(4) of the Act\5\ in particular, in that it provides for 
the equitable allocation of reasonable dues, fees, and other charges 
among its members and issuers and other persons using its facilities.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed fee change will not impose 
any burden on competition that is not necessary or appropriate in the 
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 not solicited, and does not intend to solicit, 
comments regarding the proposed rule change. The Exchange has not 
received any unsolicited written comments from members of other 
interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    The foregoing rule change establishes or changes a due, fee, or 
other charge imposed by the Exchange and, therefore, has become 
effective pursuant to Section 19(b)(3)(A)(ii) of the Act \6\ and Rule 
19b-4(e) thereunder.\7\ 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 purpose of the Act.
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    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 17 CFR 240.19b-4(e).
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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. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. 
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 will also be 
available for inspection and copying at the principal office of the 
NYSE. All submissions should refer to File No. SR-NYSE-00-56 and should 
be submitted by January 5, 2001.


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    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-2(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-31996 Filed 12-14-00; 8:45 am]
BILLING CODE 8010-01-M