[Federal Register Volume 70, Number 98 (Monday, May 23, 2005)]
[Notices]
[Pages 29546-29547]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-2563]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51695; File No. SR-NYSE-2005-30]


Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto Relating to the Reduction of Transaction 
Fees for Exchange-Listed Exchange Traded Funds

May 13, 2005.
    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 April 27, 2005, the New York Stock Exchange, Inc. (``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 prepared by the NYSE. On May 9, 
2005, the NYSE submitted Amendment No. 1 to the proposed rule 
change.\3\ The proposed rule change has been filed by the NYSE as 
establishing or changing a due, fee, or other charge, pursuant to 
Section 19(b)(3)(A)(ii) of the Act,\4\ and Rule 19b-4(f)(2) 
thereunder,\5\ which renders the proposal 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\ See Partial Amendment, dated May 9, 2005 (``Amendment No. 
1''). In Amendment No. 1, the NYSE made technical corrections to the 
rule text of the proposed rule change.
    For purposes of calculating the 60-day abrogation period, the 
Commission considers the period to commence on May 9, 2005, the date 
on which the Exchange submitted Amendment No. 1.
    \4\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \5\ 7 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 reduce the Exchange Traded Fund (``ETF'') 
transaction fees for transactions in Exchange-listed ETFs \6\ to $0.30 
per round-lot for on-Floor proprietary transactions (specialist and 
other), capped at $300 per trade, and $0.30 per round-lot for off-Floor 
transactions (customer and broker/dealer), capped at $100 per trade. 
The Exchange stated that it intends the reduction in these ETF 
transaction fees to take effect on April 27, 2005. Proposed new 
language is italicized; proposed deletions are in [brackets].
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    \6\ Telephone conversation on May 13, 2005, among Michael 
Cavalier, Assistant General Counsel, NYSE; David Hsu, Special 
Counsel, Division of Market Regulation (``Division''), Commission; 
and David Michehl, Attorney, Division, Commission.
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* * * * *
2005 Price List
* * * * *
Transaction Fees
* * * * *
Regular Session Trading
Equity Transactions
* * * * *
Exchange Traded Funds--Public Agency and Principal
Transactions
    Broker/Dealer--price per round-lot--$[0.60] 0.30.
    Maximum price per trade --100.00.
    System Orders under 5,100 shares (4)--No Charge.
    Specialists and other on-floor proprietary trading--price per 
round-lot--[0.63] 0.30.
    Maximum price per trade--300.00.
    Exchange Traded Funds admitted to dealings on an unlisted trading 
privileges (UTP) basis (5)--No Charge.
    Notes:
* * * * *
    (4) Not inclusive of orders of a member or member organization 
trading for its own account as a competing market maker, or trading as 
an agent for the account of a non-member competing market maker. 
Competing Market Maker: a specialist or market-maker registered as such 
on a registered stock exchange (other than the NYSE), or a market-maker 
bidding and offering over-the-counter, in a New York Stock Exchange 
traded security.
    (5) There is a transaction fee moratorium on ETF Products traded on 
a UTP basis. This moratorium will be in effect until further notice.
* * * * *

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 currently imposes transaction fees for trades in ETFs 
of $0.63 per 100 shares for specialists (capped at $300 per trade) and 
$0.60 per 100 shares for customer and broker-dealer orders (capped at 
$100 per trade). There is no charge for System orders (i.e., orders 
entered through SuperDot) up to 5,099 shares, subject to certain 
exceptions for competing market maker orders. The Exchange does not 
currently charge transaction fees for transactions in ETFs traded on 
the Exchange pursuant to unlisted trading privileges. For purposes of 
the Exchange's ETF transaction fee schedule, ETFs include Investment 
Company Units, Trust Issued Receipts and streetTRACKS[reg] Gold Shares.
    The Exchange proposes to reduce the ETF transaction fees for 
transactions in Exchange-listed ETFs \7\ to $0.30 per round-lot for on-
Floor proprietary transactions (specialist and other), capped at $300 
per trade, and $0.30 per round-lot for off-Floor transactions (customer 
and broker/dealer), capped at $100 per trade. The Exchange believes 
reduced transaction fees are necessary for the Exchange to maintain or 
improve its competitive position compared to other markets trading 
ETFs, and that reduced costs would benefit Exchange members and the 
investing public. The Exchange stated that it intends the reduction in 
these ETF transaction fees to take effect on April 27, 2005.
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    \7\ Id.
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2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is 
consistent with Section 6(b) of the Act,\8\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act,\9\ 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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    \8\ 5 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).

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[[Page 29547]]

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change, as 
amended, will impose any burden on competition that is not necessary or 
appropriate in furtherance of the purpose 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 foregoing proposed rule change, as amended, has become 
effective pursuant to Section 19(b)(3)(A)(ii) of the Act,\10\ and 
paragraph (f)(2) of Rule 19b-4 thereunder,\11\ 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, as 
amended, 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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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 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, as amended, 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 [email protected]. Please include 
File Number SR-NYSE-2005-30 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-NYSE-2005-30. 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, as 
amended, 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 NYSE. 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-2005-30 and should be 
submitted on or before June 13, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-2563 Filed 5-20-05; 8:45 am]
BILLING CODE 8010-01-P