[Federal Register Volume 71, Number 250 (Friday, December 29, 2006)]
[Notices]
[Pages 78501-78503]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-22396]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54997; File No. SR-NYSEArca-2006-77]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Reflect the 
Trading Sessions and Trading Halt Procedures for Certain Securities 
Trading on NYSE Arca, LLC

December 21, 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 December 20, 2006, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') 
through its wholly owned subsidiary NYSE Arca Equities, Inc. (``NYSE 
Arca Equities''), filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been substantially prepared by the Exchange. 
The Exchange filed the proposal pursuant to Section 19(b)(3)(A) of the 
Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange, through NYSE Arca Equities, is proposing to amend 
NYSE Arca Equities Rule 7.34 to reflect the trading sessions during 
which certain securities are eligible to trade on NYSE Arca, LLC 
(``NYSE Arca Marketplace''), the equities facility of NYSE Arca 
Equities, and to provide that the Exchange shall maintain a list on its 
Internet Web site that identifies all securities traded on the NYSE 
Arca Marketplace that do not trade for the duration of each of the 
three trading sessions specified in this rule. The text of the proposed 
rule change is available on the Exchange's Web site (http://www.nysearca.com/regulations/rules),

[[Page 78502]]

at the principal office of the Exchange, 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. The 
text of these statements may be examined at the places specified in 
Item III 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
    NYSE Arca Equities Rule 7.34 currently provides, in part, that the 
NYSE Arca Marketplace shall have three trading sessions each day: an 
Opening Session (1 a.m. Pacific Time to 6:30 a.m. Pacific Time), a Core 
Trading Session (6:30 a.m. Pacific Time to 1 p.m. Pacific Time), and a 
Late Trading Session (1 p.m. Pacific Time to 5 p.m. Pacific Time), and 
that the Core Trading Session for Exchange Traded Funds defined in NYSE 
Arca Equities Rules 5.1(b)(13), 5.2(j)(3), and 8.100 shall conclude at 
1:15 p.m. Pacific Time.\5\
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    \5\ NYSE Arca Equities Rules 5.1(b)(13), 5.2(j)(3), and 8.100 
relate to Unit Investment Trusts, Investment Company Units, and 
Portfolio Depositary Receipts, respectively.
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    This filing proposes that the Core Trading Session, for the 
securities described in NYSE Arca Equities Rules, 8.200, 8.201, 8.202, 
8.203, and 8.300 shall conclude at 1:15 p.m. Pacific Time to reflect 
the recent adoption of these rules.\6\ This is in addition to 
securities described in NYSE Arca Equities Rules 5.1(b)(13), 5.2(j)(3), 
and 8.100. In addition, this filing proposes to add securities 
described in NYSE Arca Equities Rule 5.1(b)(18) (defining ``Exchange-
Traded Funds'') to securities traded in the Core Trading Session.
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    \6\ NYSE Arca Equities Rules 8.200, 8.201, 8.202, 8.203, and 
8.300 relate to Trust Issued Receipts, Commodity-Based Trust Shares, 
Currency Trust Shares, Commodity Index Trust Shares, and Partnership 
Units, respectively.
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    The Exchange also proposes to include in Rule 7.34 a list of those 
securities which are eligible to trade in one or more, but not all 
three, of these trading sessions, and to maintain on its Internet Web 
site (http://www.nysearca.com) a list that identifies all securities 
traded on the NYSE Arca Marketplace that do not trade for the duration 
of each of the three sessions specified in Rule 7.34.\7\ The purpose of 
this proposed rule change is to provide transparency with respect to 
the trading hours eligibility of certain derivative securities 
products.
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    \7\ The Exchange currently disseminates on http://www.nysearca.com a list of derivative securities products that trade 
only in the Core Trading Session and those that also trade in the 
Opening Session and/or the Late Trading Session.
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    Finally, the Exchange proposes to add trading halt procedures 
applicable to trading the securities described in NYSE Arca Equities 
Rules 5.1(b)(13), 5.1(b)(18), 5.2(j)(3), 8.100, 8.200, 8.201, 8.202, 
8.203, and 8.300 (each referred to in proposed Rule 7.34 as 
``Derivative Securities Product'') on an unlisted trading privileges 
(``UTP'') basis in the Opening, Core, and Late Trading Sessions.
    The proposed amendment to Rule 7.34 provides that, in the Opening 
Session, if a Derivative Securities Product begins UTP trading on the 
NYSE Arca Marketplace in the Opening Session and subsequently a 
temporary interruption occurs in the calculation or wide dissemination 
of the Intraday Indicative Value (``IIV'') or the value of the 
underlying index, as applicable, to such product, by a major market 
data vendor, NYSE Arca may continue to trade such product for the 
remainder of the Opening Session.
    During the Core Trading Session, if a temporary interruption occurs 
in the calculation or wide dissemination of the applicable IIV or value 
of the underlying index by a major market data vendor and the listing 
market halts trading in the product, NYSE Arca, upon notification by 
the listing market of such halt due to such temporary interruption, 
also shall immediately halt trading in the Derivative Securities 
Product on the NYSE Arca Marketplace.
    If the IIV or the value of the underlying index continues not to be 
calculated or widely available after the close of the Core Trading 
Session, NYSE Arca may trade the Derivative Securities Product in the 
Late Trading Session only if the listing market traded such securities 
until the close of its regular trading session without a halt. Finally, 
if the IIV or the value of the underlying index continues not to be 
calculated or widely available as of the commencement of the Opening 
Session on the next business day, NYSE Arca shall not commence trading 
of the Derivative Securities Product in the Opening Session that day. 
If an interruption in the calculation or wide dissemination of the IIV 
or the value of the underlying index continues, NYSE Arca may resume 
trading in the product only if calculation and wide dissemination of 
the IIV or the value of the underlying index resumes or trading in the 
product resumes in the listing market.
2. Statutory Basis
    The proposal is consistent with Section 6(b) of the Act \8\ in 
general and Section 6(b)(5) of the Act \9\ in particular in that it is 
designed to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanisms of a free and open market, and to protect investors and the 
public interest.
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    \8\ 15 U.S.C. 78s(b).
    \9\ 15 U.S.C. 78s(b)(5).
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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

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) Impose any significant burden on competition; and
    (iii) Become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public interest, it 
has become effective pursuant to Section 19(b)(3)(A) of the Act \10\ 
and Rule 19b-4(f)(6) thereunder.\11\ 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,

[[Page 78503]]

or otherwise in furtherance of the purposes of the Act.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6)\12\ normally 
does not become operative prior to 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6)(iii), the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay.\13\ The Commission 
believes that such waiver is consistent with the protection of 
investors and the public interest because the proposed rule change 
should provide transparency and more clarity with respect to the 
trading hours eligibility of certain derivative securities products and 
should promote consistency in the trading halts of derivative 
securities. For these reasons, the Commission designates the proposed 
rule change as operative immediately.\14 \
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    \12\ Id.
    \13\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-4(f)(6) 
requires an exchange to give the Commission written notice of its 
intent to file the proposed rule change, along with a brief 
description and text of the proposed rule change at least five days 
prior to the date of filing of the proposed rule change, or such 
shorter time as designated by the Commission. The Commission has 
determined to waive the five-day pre-filing notice requirement in 
this case.
    \14\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the rule's impact on 
efficiency, competition and capital formation. See 15 U.S.C. 78c(f).
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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. 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 e-mail to [email protected]. Please include File 
Number SR-NYSEArca-2006-77 on the subject line.
    Paper Comments
     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NYSEArca-2006-77. 
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-2006-77 and should be submitted on or before 
January 19, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E6-22396 Filed 12-28-06; 8:45 am]
BILLING CODE 8011-01-P