[Federal Register Volume 71, Number 139 (Thursday, July 20, 2006)]
[Notices]
[Pages 41305-41306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-11493]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54130; File No. SR-NYSEArca-2006-20]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of a Proposed Rule Change Relating to Schedule of Fees and Charges

July 11, 2006.
    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 May 17, 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 prepared by the Exchange. On May 26, 2006, the Exchange 
filed Amendment No. 1 to the proposed rule change. On June 30, 2006, 
the Exchange filed Amendment No. 2 to the proposed rule change. On July 
7, 2006, the Exchange filed Amendment No. 3 to the proposed rule 
change.\3\ The Commission is publishing this notice to solicit comments 
on the proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Form 19b-4 dated July 7, 2006 (``Amendment No. 3''). 
Amendment No. 3 replaced the original filing and Amendment Nos. 1 
and 2 in their entirety.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Trade Related Charges section of 
the Schedule of Fees and Charges (``Schedule''). The text of the 
proposed fee schedule is available on the NYSE Arca's Web site http://www.archipelago.com, at the NYSE Arca'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, 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, as 
amended. The text of these statements may be examined at the places 
specified in Item IV below. The NYSE Arca 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 purpose of the proposed rule change, as amended, is to amend 
the Trade Related Charges section of the Schedule. NYSE Arca proposes 
to combine two existing fees associated with Linkage Orders.\4\ The 
Exchange also proposes to add additional language to footnotes 4 and 5 
of the Trade Related Charges section of the Schedule in order to 
explain that the existing Broker Dealer Surcharge also applies to 
Linkage Orders.
---------------------------------------------------------------------------

    \4\ Linkage Orders are orders that are routed through the 
Intermarket Linkage System (``Linkage'') as permitted under the Plan 
for the Purpose of Creating and Operating an Intermarket Option 
Linkage. See Securities Exchange Act Release No. 43086 (July 28, 
2000), 65 FR 48023 (August 4, 2000).
---------------------------------------------------------------------------

    Presently orders received via the Linkage, other than Satisfaction 
Orders, are assessed a $0.21 transaction fee and

[[Page 41306]]

a $0.05 comparison fee.\5\ Since all applicable Linkage Orders are 
charged both fees in all instances, to simplify the Schedule, the 
Exchange is proposing combining the fees into one transaction fee of 
$0.26. While the published rate schedule will appear different than it 
presently does, this proposed change does not affect the total fee the 
Exchange assesses for Linkage transactions. Changes made pursuant to 
the combining of the transaction fee and the comparison fee makes no 
substantive change to the Linkage Fee Pilot Program. This proposed 
change serves only to simplify of the Schedule.
---------------------------------------------------------------------------

    \5\ These fees are applicable through an Exchange Pilot Program 
due to expire on July 31, 2006. The Exchange intends to file for a 
one-year extension of the Pilot Program.
---------------------------------------------------------------------------

    NYSE Arca presently assesses a $0.25 per contract fee on Broker 
Dealer (``BD'') transactions occurring when BD orders are entered and 
executed electronically. Under the Linkage Fee Pilot Program, 
executions on NYSE Arca resulting from Linkage Orders are subject to 
the same billing treatment as other BD executions.\6\ Subsequently, 
Linkage Orders that are entered and executed electronically are 
assessed the $0.25 BD Surcharge per contract on those executions.\7\ 
NYSE Arca proposes to add a reference to the BD Surcharge in the 
existing footnote associated with Linkage Fees. The Exchange also 
proposes to add similar language to the footnote associated with the BD 
Surcharge in order to clarify that the surcharge will apply to Linkage 
Orders. The additional language in the footnotes associated with the BD 
Surcharge and Linkage Fees will serve to explain all costs that are 
associated with sending and executing Linkage Orders on NYSE Arca.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 47786 (May 2, 2003), 
68 FR 24779 (May 8, 2003) (order approving Linkage Fee Pilot 
Program).
    \7\ NYSE Arca acknowledges that it is in discussions with the 
Commission staff concerning the historical treatment of the BD 
Surcharge on Linkage Orders.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposal 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 dues, fees and other charges among its members 
and other persons using its facilities for the purpose of executing 
Linkage Orders that are routed to the Exchange from other market 
centers.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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

    Written comments on the proposed rule change were neither solicited 
nor received.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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:

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-NYSEArca-2006-20 on the subject line.

Paper Comments

     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-2006-20. 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-2006-20 and should be submitted on or before 
August 10, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-11493 Filed 7-19-06; 8:45 am]
BILLING CODE 8010-01-P