[Federal Register Volume 72, Number 237 (Tuesday, December 11, 2007)]
[Notices]
[Pages 70362-70363]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-23921]



[[Page 70362]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56894; File No. SR-NYSE-2007-107]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to 
the Exchange's NYSE BondsSM System and Trade Execution Fees

December 4, 2007.
    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 November 27, 2007, the New York Stock Exchange LLC (``NYSE'' or the 
``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 substantially prepared by the 
NYSE. 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 implement a four-month pilot program, 
effective December 1, 2007, that will issue liquidity providers a $20 
credit for certain bond trades executed on the NYSE BondsSM 
system (``NYSE Bonds'') with an execution size of less than 20 bonds. 
This pilot program will terminate on the close of business March 31, 
2008, and will apply to all orders. The text of the proposed rule 
change is available at the Exchange's principal office, in the 
Commission's Public Reference Room, and at http://www.nyse.com.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NYSE 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. NYSE 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 proposes to implement a four-month pilot program 
pursuant to which it will issue liquidity providers a $20 credit for 
every execution on NYSE Bonds that is less than 20 bonds. This pilot 
program will commence on December 1, 2007 and will terminate at the 
close of business March 31, 2008.
    A liquidity provider is one who posts liquidity to the system. 
During the course of clearing their bond trades, liquidity providers 
absorb clearing costs. To offset these clearing costs, liquidity 
providers may increase the offer price or decrease the bid price of the 
bond. In doing so, the best execution of a bond order may be 
compromised as clearing costs increase with smaller orders.
    Accordingly, the Exchange proposes that liquidity providers be 
issued a $20 credit for executions of bond orders with an execution 
size of less than 20 bonds. For a liquidity provider to be eligible to 
receive this $20 credit, the original order posted by the liquidity 
provider must be for 20 bonds or more. For example, if a liquidity 
provider posts an order for 100 bonds and a contra side order comes in 
for 50 bonds, the liquidity provider will not receive a $20 credit. 
However, if a contra side order comes in for 10 bonds against the 
liquidity provider's original posted order of 100 bonds, the liquidity 
provider will receive a credit of $20 for that execution from the 
Exchange.
    NYSE Bonds, which was implemented in March 2007, will continue to 
update its functionality to provide competitive bond trading for 
customers. The Exchange believes that this $20 credit will incentivize 
the liquidity provider to display the best price available on NYSE 
Bonds.
2. Statutory Basis
    NYSE believes that the proposed rule change is consistent with the 
provisions of Section 6 of the Act,\3\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act \4\ in particular, in that it 
is designed to provide for the equitable allocation of reasonable dues, 
fees, and other charges among its members and other persons using its 
facilities.
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    \3\ 15 U.S.C. 78f.
    \4\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NYSE does not believe that the proposed rule change will impose any 
burden on competition that is not necessary or appropriate in 
furtherance of 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 were neither solicited nor received.

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

    Because the foregoing rule change establishes or changes a due, 
fee, or other charge imposed by the Exchange, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act \5\ and subparagraph (f)(2) 
of Rule 19b-4 thereunder.\6\ 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 purposes of the Act.
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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 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 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-2007-107 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-NYSE-2007-107. 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

[[Page 70363]]

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, 100 F Street, NE., Washington, DC 20549, on 
official business days between the hours of 10 a.m. and 3 p.m. Copies 
of such filing also will be available for inspection and copying at the 
principal office of 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-2007-107 and should be submitted on or before January 2, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.7
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-23921 Filed 12-10-07; 8:45 am]
BILLING CODE 8011-01-P