[Federal Register Volume 71, Number 90 (Wednesday, May 10, 2006)]
[Notices]
[Pages 27300-27301]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-7107]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53752; File No. SR-PCX-2006-14]


Self-Regulatory Organizations; Pacific Exchange, Inc. (n/k/a NYSE 
Arca, Inc.); Order Approving Proposed Rule Change To Reduce the Fee 
Charged to a Lead Market Maker When It Transfers Options Issues to 
Another Lead Market Maker

May 2, 2006.

I. Introduction

    On February 23, 2006, the Pacific Exchange, Inc. (n/k/a NYSE Arca, 
Inc.) (``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change pursuant to Section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ to reduce the fee charged to a Lead Market Maker 
(``LMM'') when it transfers options issues to another LMM. The proposed 
rule change was published for comment in the Federal Register on March 
20, 2006.\3\ The Commission received no comments on the proposal. This 
order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 53476 (March 13, 
2006), 71 FR 14046.
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II. Description of the Proposal

    In its filing, the Exchange proposed to reduce the fee charged to 
an LMM, when the LMM transfers an allocated options issue to another 
LMM. The Exchange presently charges an LMM a $1000 fee, per issue, in 
the event that the LMM transfers the issue to another LMM, in 
accordance with the Exchange's allocation procedures. The $1000 per 
issue fee is subject to a cap when multiple issues are included as part 
of the same transfer. Under the new proposal, the fee will be $100 per 
issue transferred. The new lower fee will not be subject to a rate cap 
when multiple issues are transferred.
    The Exchange proposes to make this fee effective retroactive to 
September 26, 2005, which coincides with the date that Archipelago 
Holdings Inc. acquired the Exchange (``Merger''). The Exchange will 
review all transfers that have occurred or may occur from September 26, 
2005 through the effective date of this proposal and will make any fee 
adjustments that are deemed warranted pursuant to the proposed rate 
schedule contained in this filing.

III. Discussion

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of Section 6(b) of the 
Act \4\ and the rules and regulations thereunder applicable to a 
national securities exchange.\5\ In particular, the Commission finds 
that the proposed rule change is consistent with Section 6(b)(4) of the 
Act,\6\ which requires, among other things, that an exchange's rules 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its members and other persons using its facilities. 
The

[[Page 27301]]

Commission notes that, following the Merger, new management of the 
Exchange has reviewed fees and charges and determined to make this fee 
reduction retroactive to the date of the Merger.
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    \4\ 15 U.S.C. 78f(b).
    \5\ In approving the proposed rule change, the Commission has 
considered its impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b)(4).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-PCX-2006-14) be, and it 
hereby is, approved.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-7107 Filed 5-9-06; 8:45 am]
BILLING CODE 8010-01-P