Self-Regulatory Organizations; New York Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Revise Certain of the Exchange's Facility and Equipment Fees and System Processing Fees Charged to Members, 2281-2283 [E6-325]
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Federal Register / Vol. 71, No. 9 / Friday, January 13, 2006 / Notices
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 (https://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
Section. Copies of such filing also will
be available for inspection and copying
at the principal office of the ISE. 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–ISE–2005–58 and should be
submitted on or before January 30, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.5
Nancy M. Morris,
Secretary.
[FR Doc. E6–255 Filed 1–12–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53071; File No. SR–NYSE–
2005–91]
Self-Regulatory Organizations; New
York Stock Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Revise
Certain of the Exchange’s Facility and
Equipment Fees and System
Processing Fees Charged to Members
hsrobinson on PROD1PC70 with NOTICES
January 6, 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
29, 2005, the New York Stock Exchange,
Inc. (‘‘Exchange’’ or ‘‘NYSE’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240. 19b–4.
Items I, II, and III below, which Items
have been prepared by the NYSE. The
NYSE has designated this proposal as
establishing or changing a due, fee, or
other charge imposed by a selfregulatory organization pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(2) thereunder,4 which renders
the proposal effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The NYSE proposes to revise certain
of its Facility and Equipment Fees and
System Processing Fees charged to
members. The text of the proposed rule
change is available on the NYSE Web
site, (https://www.nyse.com), at the
NYSE’s principal office, 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
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. The 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 has undertaken a
thorough analysis of its various fees
charged to Exchange members for floor
and equipment and system processing
services. This analysis has taken into
account the changing business models
of the Exchange’s members. In most
cases, the Exchange’s fees have not been
meaningfully revised for a period of five
to 15 years.
In response to this analysis, the
Exchange proposes to revise its fee
schedules for certain floor and
equipment and system processing
services. These revisions to the
Exchange’s fee schedules would take
effect January 1, 2006 and form part of
the Exchange’s 2006 Price List. The
5 17
1 15
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15:41 Jan 12, 2006
3 15
4 17
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
Frm 00104
Fmt 4703
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2281
proposed changes are defined by certain
core objectives:
• Establish a fee structure that more
accurately and equitably reflects
member firms’ utilization of floor and
equipment and system processing
services;
• Simplify the Exchange’s fee
schedules and make them easier to
understand;
• Recognize the overall costs
members incur in order to trade at the
Exchange; and
• Encourage participation in the
NYSE’s marketplace.
The Exchange proposes to revise the
pricing of trading floor services in four
primary areas: Specialist Fees, Booth
Fees, Clerk Badge Fees, and UsageBased Fees.
Specialist Fees. The Exchange will
charge specialist firms a new ‘‘Trading
Privilege Fee’’ that will replace several
existing Exchange fees including the
Specialist Floor Fee, the Specialist Post
Fee, Specialist Odd Lot Charges, and
Specialist System Charges. This Trading
Privilege Fee will be assessed monthly
on the Exchange’s specialist firms for
each security, including any investment
company unit (‘‘ICU’’) traded,5 and will
be determined based on each security’s
consolidated average daily dollar
volume.
The Exchange anticipates that this
Trading Privilege Fee will:
• Further increase transparency and
simplify Exchange fees for specialists by
replacing four separate fees with one
new fee;
• Position the Exchange’s floor
revenues to grow with potential future
growth in the NYSE’s new listings
business;
• More closely align the Exchange’s
floor-related fees from specialists with
the fundamental driver of their business
activity; and
• Help offset the costs incurred to
provide technology and other
infrastructure to support specialist firms
operating on the floor of the Exchange.
Booth Fees. Currently, the Exchange
charges an annual fee per booth,6 billed
monthly on a pro-rated basis,7 that is
5 Includes securities and ICUs admitted to
dealings on an unlisted trading privileges (UTP)
basis.
6 Booths are workspaces located around the
perimeter of the trading floor where member firms
and independent brokers receive orders.
7 In its filing, the Exchange described this fee as
a monthly fee. The Exchange confirmed in a
telephone conference between John Carey, Assistant
General Counsel, NYSE, and David L. Orlic,
Attorney, Division of Market Regulation,
Commission, on January 6, 2006 that the fee is in
fact an annual fee billed monthly on a pro-rated
basis.
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hsrobinson on PROD1PC70 with NOTICES
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Federal Register / Vol. 71, No. 9 / Friday, January 13, 2006 / Notices
determined based on the particular size
and location of each booth within the
Exchange’s five trading rooms. Under its
revised booth pricing schedule, the
Exchange will charge a flat fee per booth
based solely on the trading room where
each booth is located. This change will
allow the Exchange to simplify its price
schedule by reducing the number of
booth fees from several hundred to four
and will enable member firms to more
easily assess their booth-related floor
costs. In order to further simplify the
current booth pricing schedule, and to
ensure that members are only charged
for services actually utilized on the
trading floor, the Exchange is also
eliminating the minimum Floor
Privilege Fee.
Clerk Badge Fees. Currently, the
Exchange maintains two different rates
for Telephone Clerk Tickets, depending
upon the ratio of telephone clerks per
booth or post space. The Exchange will
now charge one flat fee per eligible
person. This flat fee is intended to
simplify for member firms the process of
calculating the incremental cost of an
individual employee on the floor and to
provide greater transparency to member
firms with respect to the subsidized
services their employees utilize at the
Exchange, such as security and
subsidized cafeteria and medical
services. In addition, the name of this
fee is being changed from Telephone
Clerk Ticket to Clerk Badge Fee to
further enhance the transparency of the
Exchange’s price structure.
Usage-Based Fees. The Exchange is
changing its fees for several usage-based
services provided by the Exchange,
including eBroker handheld devices,
telephone lines, the Online Comparison
System, and Exceptional System
Messages.
• eBroker Handheld Devices. The
Exchange currently provides its
proprietary eBroker handheld device to
brokers on the floor of the Exchange free
of charge. The Exchange is introducing
an annual charge of $5,000 per eBroker
device in order to:
• Allow the Exchange to recoup a
portion of the costs incurred to develop
and maintain the proprietary eBroker
system;
• Encourage competition and
technological development by outside
vendors in the provision of products
such as handheld devices for use on the
trading floor; and
• Recognize that eBroker is not used
by all brokers, thus creating an incentive
for those brokers who do use it to do so
efficiently.
• Telephone Lines. The Exchange
currently charges brokers for telephone
lines that originate on the floor of the
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15:41 Jan 12, 2006
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Exchange and terminate at a customer
site, and the Exchange does not
currently charge for telephone lines that
terminate at a broker’s own back-office
or trading room. The Exchange will now
charge brokers a fee for each telephone
line, regardless of where the line
terminates. The Exchange believes this
change in the telephone line charge
will:
• Establish a more equitable usagebased pricing structure by imposing a
standard rate per telephone line,
regardless of where the line terminates;
and
• Create an incentive for member
firms to more efficiently use the
Exchange’s telephone capacity and
systems.
• Online Comparison System. The
Exchange has not revised any fees
related to its Online Comparison System
(‘‘OCS’’) since the system was first
introduced in 1989. The Exchange is
revising the prices for OCS access and
per-submission fees in order to:
• Recover incremental fees to help
offset OCS development and
maintenance costs, which have
continued to increase as a result of
ongoing system improvements; and
• Establish a more simplified and
equitable usage-based fee schedule by:
(i) Establishing a flat remote access fee
regardless of how a member firm
chooses to access the OCS system; and
(ii) establishing a flat per-submission fee
rather than differentiating pricing based
on the size of each particular
transaction, which has no bearing on the
actual cost to process a submission.
• Exceptional System Message Fee. A
new fee of $0.01 per ‘‘Exceptional
System Message’’ will be applied. An
Exceptional System Message is defined
as any system 8 message, as measured by
mnemonic 9 on a daily basis, that
exceeds the following criteria: (i) The
ratio of a mnemonic’s share of the total
system messages to the mnemonic’s
share of total executed system volume
exceeds 10:1; and (ii) the mnemonic’s
cancelled system orders as a percentage
of its total system orders exceeds 90.0%.
If a mnemonic exceeds these two
thresholds for a particular trading day,
the Exceptional System Message fee will
be applied only towards those cancelled
system messages in excess of 90.0% of
that mnemonic’s total system orders for
the day. Any fees incurred as a result of
this Exceptional System Message fee
will not be applied towards either the
8 The relevant system is SuperDOT, the
Exchange’s Designated Order Turnaround System.
9 Mnemonics, which are alphabetical identifiers
issued by the NYSE to its member firms and their
customers, are required for order entry and
identification purposes.
PO 00000
Frm 00105
Fmt 4703
Sfmt 4703
monthly dollar cap on transaction fees
(which is currently set at $600,000) or
the commission-based 2% cap on
transaction fees. It is intended that this
fee will help to compensate the
Exchange for the cost of the incremental
system capacity that must be readily
available to accommodate trading
strategies that result in significant
volumes of system messages and
cancellations.
1. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act 10 in general, and
furthers the objectives of Section 6(b)(4)
of the Act 11 in particular, in that it is
designed to provide for the equitable
allocation of reasonable dues, fees, and
other charges among its members.
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
The Exchange has neither solicited
nor received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 12 and subparagraph (f)(2) of
Rule 19b–4 thereunder,13 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 such 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.14
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.
10 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
12 15 U.S.C. 78s(b)(3)(A).
13 17 CFR 240.19b–4(f)(2).
14 See 15 U.S.C. 78s(b)(3)(C).
11 15
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Federal Register / Vol. 71, No. 9 / Friday, January 13, 2006 / Notices
Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2005–91 on the
subject line.
[Release No. 34–53053; File No. SR–OCC–
2003–13]
Self-Regulatory Organizations; The
Options Clearing Corporation; Order
Approving Proposed Rule Change To
Establish a Comprehensive Standard
of Care and Limitation of Liability With
Respect to Clearing Members
January 5, 2006.
Paper Comments
I. Introduction
On November 5, 2003, The Options
Clearing Corporation (‘‘OCC’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) and on
August 18, 2004, amended 1 proposed
rule change SR–OCC–2003–13 pursuant
All submissions should refer to File
to Section 19(b)(1) of the Securities
Number SR–NYSE–2005–91. This file
Exchange Act of 1934 (‘‘Act’’).2 Notice
number should be included on the
of the proposal was published in the
subject line if e-mail is used. To help the
Federal Register on November 23,
Commission process and review your
2005.3 No comment letters were
comments more efficiently, please use
received. For the reasons discussed
only one method. The Commission will below, the Commission is approving the
post all comments on the Commission’s proposed rule change.
Internet Web site (https://www.sec.gov/
II. Description
rules/sro.shtml). Copies of the
In its 1980 release setting forth
submission, all subsequent
standards for registration of clearing
amendments, all written statements
agencies, the Commission’s Division of
with respect to the proposed rule
Market Regulation stated that it was ‘‘of
change that are filed with the
the view that clearing agencies should
Commission, and all written
undertake to perform their obligations
communications relating to the
with a high degree of care.’’ 4 In its 1983
proposed rule change between the
order registering nine clearing agencies,
Commission and any person, other than
the Commission stated that it did ‘‘not
those that may be withheld from the
believe sufficient justification exists at
public in accordance with the
this time to require a unique federal
provisions of 5 U.S.C. 552, will be
standard of care for registered clearing
available for inspection and copying in
agencies.’’ 5 The Commission has left to
the Commission’s Public Reference
user-governed clearing agencies the
Room. Copies of the filing also will be
question of how to allocate losses
available for inspection and copying at
associated with, among other things,
the principal office of the NYSE. All
clearing agency functions. Along this
comments received will be posted
line, in its 1986 order approving a
without change; the Commission does
proposed rule change of the Midwest
not edit personal identifying
Securities Trust Company (‘‘MSTC’’) to
information from submissions. You
clarify the rights and liabilities of MSTC
should submit only information that
and its participants with respect to
you wish to make available publicly. All certain services, the Commission stated:
submissions should refer to File
The Act does not specify the standard of
Number SR–NYSE–2005–91 and should care that must be exercised by registered
clearing agencies and the Commission has
be submitted on or before February 3,
determined that imposition of a unique
2006.
hsrobinson on PROD1PC70 with NOTICES
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–9303.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.15
Nancy M. Morris,
Secretary.
[FR Doc. E6–325 Filed 1–12–06; 8:45 am]
BILLING CODE 8010–01–P
15 17
CFR 200.30–3(a)(12).
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15:41 Jan 12, 2006
Jkt 208001
federal standard of care for registered
1 Letter from William H. Navin, Executive Vice
President, General Counsel, and Secretary, OCC
(August 17, 2005).
2 15 U.S.C. 78s(b)(1).
3 Securities Exchange Act Release No. 52783
(November 16, 2005), 70 FR 70910.
4 Securities Exchange Act Release No. 16900
(June 17, 1980), 45 FR 45167 (June 23, 1980).
5 Securities Exchange Act Release No. 20221
(September 23, 1983), 48 FR 45167 (October 3,
1983).
PO 00000
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2283
clearing agencies is not appropriate at this
time. [citing Securities Exchange Act Release
No. 20221, supra note 6] For those reasons
the Commission believes that the clearing
agency standard of care and the allocation of
rights and responsibilities between a clearing
agency and its participants applicable to
clearing agency services generally may be set
by the clearing agency and its participants.
The Commission believes it should review
clearing agency proposed rule changes in this
area on a case-by-case basis and balance the
need for a high degree of clearing agency care
with the effect resulting liabilities may have
on clearing agency operations, costs, and
safeguarding of securities and funds.6
Because standards of care represent an
allocation of rights and liabilities
between a clearing agency and its users,
which are generally sophisticated
financial entities, the Commission has
continued to refrain from establishing a
unique federal standard of care and has
allowed clearing agencies and other selfregulatory organizations and their users
to establish their own standards of
care.7
With this rule change, OCC is
establishing a comprehensive gross
negligence standard of care and
limitation of liability with respect to its
clearing members. In connection with
this filing, OCC has made the following
representations. OCC states in its
original filing that since its founding in
1973, it has performed its clearing
services with an exemplary level of care.
Its record of fulfilling its commitments
to its clearing members for over 30 years
reflects OCC’s commitment to serving
the best interests of its clearing
members. It has comprehensive systems
and operating procedures in place to
ensure that its clearing functions are
executed with the highest level of
accuracy. In addition to its own concern
for accuracy, it is subject to extensive
regulatory oversight by the Commission.
Furthermore, in its amendment to the
filing, OCC states that (1) gross
negligence is the standard of care
generally used by other clearing
agencies such as the Fixed Income
Clearing Corporation, (2) the decision to
apply a gross negligence standard of
care to OCC is a conscious allocation of
risk between OCC and its members, (3)
the filing was unanimously approved by
OCC’s directors, a majority of whom are
officers of clearing members, and (4) the
6 Securities Exchange Act Release No. 22940
(February 24, 1986), 51 FR 7169 (February 28,
1986).
7 See, e.g., Securities Exchange Act Release Nos.
51669 (May 9, 2005), 70 FR 25634 (May 13, 2005)
[File No. SR–NSCC–2004–09]; 48201 (July 21,
2003), 68 FR 44128 (July 25, 2003) [File No. SR–
GSCC–2002–10]; 37563 (August 14, 1996), 61 FR
43285 (August 21, 1996) [SR–PSE–96–21]; and
37421 (July 11, 1996), 61 FR 37513 (July 18, 1996)
[SR–CBOE–96–02].
E:\FR\FM\13JAN1.SGM
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]]>Agencies
[Federal Register Volume 71, Number 9 (Friday, January 13, 2006)]
[Notices]
[Pages 2281-2283]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-325]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53071; File No. SR-NYSE-2005-91]
Self-Regulatory Organizations; New York Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Revise Certain of the Exchange's Facility and Equipment Fees and System
Processing Fees Charged to Members
January 6, 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 29, 2005, the New York Stock Exchange, Inc. (``Exchange''
or ``NYSE'') 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. The NYSE has
designated this proposal as establishing or changing a due, fee, or
other charge imposed by a self-regulatory organization pursuant to
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\
which renders the proposal effective upon filing with the Commission.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\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)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The NYSE proposes to revise certain of its Facility and Equipment
Fees and System Processing Fees charged to members. The text of the
proposed rule change is available on the NYSE Web site, (https://
www.nyse.com), at the NYSE's principal office, 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 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. The 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 has undertaken a thorough analysis of its various fees
charged to Exchange members for floor and equipment and system
processing services. This analysis has taken into account the changing
business models of the Exchange's members. In most cases, the
Exchange's fees have not been meaningfully revised for a period of five
to 15 years.
In response to this analysis, the Exchange proposes to revise its
fee schedules for certain floor and equipment and system processing
services. These revisions to the Exchange's fee schedules would take
effect January 1, 2006 and form part of the Exchange's 2006 Price List.
The proposed changes are defined by certain core objectives:
Establish a fee structure that more accurately and
equitably reflects member firms' utilization of floor and equipment and
system processing services;
Simplify the Exchange's fee schedules and make them easier
to understand;
Recognize the overall costs members incur in order to
trade at the Exchange; and
Encourage participation in the NYSE's marketplace.
The Exchange proposes to revise the pricing of trading floor
services in four primary areas: Specialist Fees, Booth Fees, Clerk
Badge Fees, and Usage-Based Fees.
Specialist Fees. The Exchange will charge specialist firms a new
``Trading Privilege Fee'' that will replace several existing Exchange
fees including the Specialist Floor Fee, the Specialist Post Fee,
Specialist Odd Lot Charges, and Specialist System Charges. This Trading
Privilege Fee will be assessed monthly on the Exchange's specialist
firms for each security, including any investment company unit
(``ICU'') traded,\5\ and will be determined based on each security's
consolidated average daily dollar volume.
---------------------------------------------------------------------------
\5\ Includes securities and ICUs admitted to dealings on an
unlisted trading privileges (UTP) basis.
---------------------------------------------------------------------------
The Exchange anticipates that this Trading Privilege Fee will:
Further increase transparency and simplify Exchange fees
for specialists by replacing four separate fees with one new fee;
Position the Exchange's floor revenues to grow with
potential future growth in the NYSE's new listings business;
More closely align the Exchange's floor-related fees from
specialists with the fundamental driver of their business activity; and
Help offset the costs incurred to provide technology and
other infrastructure to support specialist firms operating on the floor
of the Exchange.
Booth Fees. Currently, the Exchange charges an annual fee per
booth,\6\ billed monthly on a pro-rated basis,\7\ that is
[[Page 2282]]
determined based on the particular size and location of each booth
within the Exchange's five trading rooms. Under its revised booth
pricing schedule, the Exchange will charge a flat fee per booth based
solely on the trading room where each booth is located. This change
will allow the Exchange to simplify its price schedule by reducing the
number of booth fees from several hundred to four and will enable
member firms to more easily assess their booth-related floor costs. In
order to further simplify the current booth pricing schedule, and to
ensure that members are only charged for services actually utilized on
the trading floor, the Exchange is also eliminating the minimum Floor
Privilege Fee.
---------------------------------------------------------------------------
\6\ Booths are workspaces located around the perimeter of the
trading floor where member firms and independent brokers receive
orders.
\7\ In its filing, the Exchange described this fee as a monthly
fee. The Exchange confirmed in a telephone conference between John
Carey, Assistant General Counsel, NYSE, and David L. Orlic,
Attorney, Division of Market Regulation, Commission, on January 6,
2006 that the fee is in fact an annual fee billed monthly on a pro-
rated basis.
---------------------------------------------------------------------------
Clerk Badge Fees. Currently, the Exchange maintains two different
rates for Telephone Clerk Tickets, depending upon the ratio of
telephone clerks per booth or post space. The Exchange will now charge
one flat fee per eligible person. This flat fee is intended to simplify
for member firms the process of calculating the incremental cost of an
individual employee on the floor and to provide greater transparency to
member firms with respect to the subsidized services their employees
utilize at the Exchange, such as security and subsidized cafeteria and
medical services. In addition, the name of this fee is being changed
from Telephone Clerk Ticket to Clerk Badge Fee to further enhance the
transparency of the Exchange's price structure.
Usage-Based Fees. The Exchange is changing its fees for several
usage-based services provided by the Exchange, including eBroker
handheld devices, telephone lines, the Online Comparison System, and
Exceptional System Messages.
eBroker Handheld Devices. The Exchange currently provides
its proprietary eBroker handheld device to brokers on the floor of the
Exchange free of charge. The Exchange is introducing an annual charge
of $5,000 per eBroker device in order to:
Allow the Exchange to recoup a portion of the costs
incurred to develop and maintain the proprietary eBroker system;
Encourage competition and technological development by
outside vendors in the provision of products such as handheld devices
for use on the trading floor; and
Recognize that eBroker is not used by all brokers, thus
creating an incentive for those brokers who do use it to do so
efficiently.
Telephone Lines. The Exchange currently charges brokers
for telephone lines that originate on the floor of the Exchange and
terminate at a customer site, and the Exchange does not currently
charge for telephone lines that terminate at a broker's own back-office
or trading room. The Exchange will now charge brokers a fee for each
telephone line, regardless of where the line terminates. The Exchange
believes this change in the telephone line charge will:
Establish a more equitable usage-based pricing structure
by imposing a standard rate per telephone line, regardless of where the
line terminates; and
Create an incentive for member firms to more efficiently
use the Exchange's telephone capacity and systems.
Online Comparison System. The Exchange has not revised any
fees related to its Online Comparison System (``OCS'') since the system
was first introduced in 1989. The Exchange is revising the prices for
OCS access and per-submission fees in order to:
Recover incremental fees to help offset OCS development
and maintenance costs, which have continued to increase as a result of
ongoing system improvements; and
Establish a more simplified and equitable usage-based fee
schedule by: (i) Establishing a flat remote access fee regardless of
how a member firm chooses to access the OCS system; and (ii)
establishing a flat per-submission fee rather than differentiating
pricing based on the size of each particular transaction, which has no
bearing on the actual cost to process a submission.
Exceptional System Message Fee. A new fee of $0.01 per
``Exceptional System Message'' will be applied. An Exceptional System
Message is defined as any system \8\ message, as measured by mnemonic
\9\ on a daily basis, that exceeds the following criteria: (i) The
ratio of a mnemonic's share of the total system messages to the
mnemonic's share of total executed system volume exceeds 10:1; and (ii)
the mnemonic's cancelled system orders as a percentage of its total
system orders exceeds 90.0%. If a mnemonic exceeds these two thresholds
for a particular trading day, the Exceptional System Message fee will
be applied only towards those cancelled system messages in excess of
90.0% of that mnemonic's total system orders for the day. Any fees
incurred as a result of this Exceptional System Message fee will not be
applied towards either the monthly dollar cap on transaction fees
(which is currently set at $600,000) or the commission-based 2% cap on
transaction fees. It is intended that this fee will help to compensate
the Exchange for the cost of the incremental system capacity that must
be readily available to accommodate trading strategies that result in
significant volumes of system messages and cancellations.
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\8\ The relevant system is SuperDOT[supreg], the Exchange's
Designated Order Turnaround System.
\9\ Mnemonics, which are alphabetical identifiers issued by the
NYSE to its member firms and their customers, are required for order
entry and identification purposes.
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1. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \10\ in general, and furthers the
objectives of Section 6(b)(4) of the Act \11\ in particular, in that it
is designed to provide for the equitable allocation of reasonable dues,
fees, and other charges among its members.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4).
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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
The Exchange has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \12\ and subparagraph (f)(2) of Rule 19b-4
thereunder,\13\ 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 such 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.\14\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(2).
\14\ See 15 U.S.C. 78s(b)(3)(C).
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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.
[[Page 2283]]
Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSE-2005-91 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 20549-9303.
All submissions should refer to File Number SR-NYSE-2005-91. 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 (https://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 the 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-2005-91 and should be submitted on or before February 3, 2006.
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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Nancy M. Morris,
Secretary.
[FR Doc. E6-325 Filed 1-12-06; 8:45 am]
BILLING CODE 8010-01-P
