Self-Regulatory Organizations; New York Stock Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Rule 104, Dealings by Specialists, 13882-13884 [E6-3898]

Download as PDF 13882 Federal Register / Vol. 71, No. 52 / Friday, March 17, 2006 / Notices 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 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–2006–04 and should be submitted by April 7, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.77 Nancy M. Morris, Secretary. [FR Doc. E6–3855 Filed 3–16–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53472; File No. SR–NYSE– 2006–18] Self-Regulatory Organizations; New York Stock Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Rule 104, Dealings by Specialists March 13, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on March 8, 2006, 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 and II below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a ‘‘noncontroversial’’ rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 upon filing with the Commission.5 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 77 17 CFR 200.30–3(a)(12). 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). 5 The NYSE has asked the Commission to waive the 5-day pre-filing notice requirement and the 30day operative delay. See Section 19(b)(3)(A) of the Act, and Rule 19b–4(f)(6)(iii) thereunder. 15 U.S.C. 78s(b)(1), 17 CFR 240.19b–4(f)(6)(iii). sroberts on PROD1PC70 with NOTICES 1 15 VerDate Aug<31>2005 16:52 Mar 16, 2006 Jkt 208001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend NYSE Rules 104.12 and .13 concerning investment accounts and investment positions in specialty securities for securities issued by the Exchange. The text of the proposed rule change is available on NYSE’s Web site, https:// www.nyse.com, at 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 Exchange included statements concerning the purpose of and basis for the proposed rule change. The text of these statements may be examined at the places specified in Item IV 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 Rule 104 (Dealings by Specialists) governs specialists’ dealings in their specialty securities. Trades conducted by a specialist in specialty securities are effected in the specialist’s dealer account. Under NYSE Rule 104.12, a specialist may assign part of his or her dealer account position to an investment account, provided that such assignment does not create a short position in the specialist’s dealer account. Additionally, NYSE Rule 104.12 prohibits the assignment to the investment account of any position or part thereof that was purchased on nonstabilizing ticks, i.e., a ‘‘plus’’ tick (at a price higher than the last trade) or ‘‘zero plus tick’’ (higher than the last different trade). In order to assign a position to an investment account, a specialist’s purchases in that security must be at least 75% stabilizing for that day and the calendar week encompassing the purchase of that security. Similarly, positions in the dealer account are netted with positions in an investment account. Thus, if the specialist is short in the dealer account, but has a long position in the investment account that exceeds the short dealer position, the specialist is considered to be net long. In that PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 situation, a specialist may not liquidate the short dealer account position by purchasing on a plus tick; nor may the specialist purchase on a zero plus tick more than 50% of the stock that is being offered in the market at that time, and, in no event may the specialist purchase the final 100 shares offered. NYSE Rule 104.13 requires that transactions effected in specialty stocks for the accounts of specified persons affiliated with or related to a specialist must be for investment purposes and executed in accordance with certain restrictions relating to the price at which transactions may take place, known as ‘‘tick’’ restrictions. The accounts specified in the rule include accounts of employees or parties active in the business of the specialist, the spouse or children residing in the same household as a specialist or person active in the specialist business, and any approved person (individual or entity in a control relationship) of the specialist, other than an approved person entitled to an exemption pursuant to NYSE Rule 98 (Restrictions on an Approved Person Associated with a Specialist’s Member Organization). NYSE-Archipelago Merger. The merger of NYSE and Archipelago Holdings, Inc. has received Commission approval and was completed on March 7, 2006.6 Trading in the common stock of the newly-formed, publicly-traded holding company NYSE Group, Inc. on the Exchange will commence on March 8, 2006, under the symbol ‘‘NYX.’’ Under the terms of the merger, members of the Exchange, i.e., seatholders on the NYSE, will receive shares of NYX stock in exchange for their membership interests. In certain circumstances, where the purchase of an Exchange membership was the subject of a financing arrangement with the member organization a seat holder was associated with, the member organization will be eligible to receive the NYX shares being exchanged for a membership. These NYX shares will be held in a special account separate from the specialist’s dealer and investment accounts. The NYX shares received as a result of this exchange will be subject to transfer restrictions set forth in the amended and restated Certificate of Incorporation of NYSE Group, Inc. These transfer restrictions prohibit any direct or indirect assignment, sale, exchange, transfer, tender or any other disposition of NYX shares. Except as otherwise provided in Article IV, 6 See Securities Exchange Act Release No. 53382 (February 27, 2006), 71 FR 11251 (March 6, 2006) (SR–NYSE–2005–77). E:\FR\FM\17MRN1.SGM 17MRN1 sroberts on PROD1PC70 with NOTICES Federal Register / Vol. 71, No. 52 / Friday, March 17, 2006 / Notices Section 4 of the amended and restated Certificate of Incorporation, these restrictions are scheduled to expire after 12, 24, and 36 months subsequent to the issuance date of the shares, for one-third of the total shares after each such 12month interval. The specialist organization will be informed by the transfer agent as to the specific date the restrictions will be lifted for each tranche. It is only when the restrictions are removed that these shares will be transferred to the specialist’s dealer or investment account and will be fully subject to NYSE Rule 104. Among those who will receive restricted NYX shares will be seatholders who are associated with the member organization which is registered as the specialist in NYX stock, and that specialist member organization itself. Proposed Rule Change. The Exchange proposes to amend NYSE Rules 104.12 and .13 to exempt from these provisions any positions held by a specialist or his or her organization in a specialty security issued by NYSE Group, Inc. and listed on the NYSE which is restricted as to sale or transfer. This exemption will last during the pendency of such restriction as to sale or transfer. The Exchange believes that given that these shares cannot be used in the specialist’s normal market making activities, the application of NYSE Rules 104.12 and .13 to these positions does not serve any useful purpose. The provisions of NYSE Rule 104.12 are designed to permit specialists to establish investment positions in specialty securities while recognizing that all trading activity and positions in such specialty securities must be available for use in the specialist’s dealer activities. The restrictions contained in NYSE Rule 104.13 help ensure that associated persons of specialists do not trade in a destabilizing manner any NYSE security in which the related specialist organization is registered. Since the shares of NYX that are to be received by the specialists, the specialist member organization and any associated parties in exchange for their membership interests will be, for all practical purposes, unable to be used in any manner until the restrictions described above are removed, the Exchange believes that it would be inappropriate to include them within the purview of NYSE Rules 104.12 and .13. 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 written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule does not (i) significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; and (iii) by its terms, does not 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, provided that the Exchange has given the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change or such shorter time as designated by the Commission, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 8 and Rule 19b–4(f)(6) thereunder.9 Accordingly, a proposed rule change filed under Rule 19b–4(f)(6) under the Act 10 normally may not become operative prior to 30 days after the date of filing. However, Rule 19b– 4(f)(6)(iii) 11 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The NYSE has requested that the Commission waive the 5-day pre-filing U.S.C. 78f(b)(5). U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b–4(f)(6). 10 17 CFR 240.19b–4(f)(6). 11 17 CFR 240.19b–4(f)(6)(iii). 8 15 The basis under the Act for this proposed rule change is the requirement 16:52 Mar 16, 2006 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. 7 15 2. Statutory Basis VerDate Aug<31>2005 under Section 6(b)(5) 7 that an Exchange have rules that are designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. Jkt 208001 PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 13883 notice requirement and the 30-day operative delay, which would make the rule change effective and operative upon filing. The Commission believes that waiver of the 5-day pre-filing notice and the 30-day operative delay is consistent with the protection of investors and the public interest, because it allows the NYSE to implement this proposal as soon as possible upon the commencement of trading of NYX stock on March 8, 2006, and thereby accommodates the receipt and retention of restricted NYX shares by the specialist in a special account separate and apart from the specialist’s dealer or investment accounts and addresses the treatment of such shares under NYSE Rule 104. For these reasons, the Commission designates the proposal to be effective and operative upon filing with the Commission.12 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.13 IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. 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 rulecomments@sec.gov. Please include File Number SR–NYSE–2006–18 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–2006–18. 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 12 For the purposes only of accelerating the operative date of this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 13 See 15 U.S.C. 78s(b)(3)(C). E:\FR\FM\17MRN1.SGM 17MRN1 13884 Federal Register / Vol. 71, No. 52 / Friday, March 17, 2006 / Notices 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 will also 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–2006–18 and should be submitted by April 7, 2006. Asia. The focus of all programs must be reaching out to youth ages 8–18. Programs designed to train elite athletes will not be considered. In Africa, the following countries are eligible: Democratic Republic of Congo, Ethiopia, Guinea, Liberia, Rwanda, Tanzania and Uganda. In East Asia eligible countries are: Cambodia, China, Indonesia, Malaysia, Philippines and Thailand. In the Near East and North Africa eligible countries are: Algeria, Bahrain, Egypt, Kuwait, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, United Arab Emirates, and Yemen. Eligible countries in South Asia are: Afghanistan, Bangladesh, India, Nepal, Pakistan and Sri Lanka. Only single country projects are eligible. Applicants may not submit proposals that address more than one country or for countries that are not designated in the RFGP. For the purposes of this competition, eligible regions are Africa, East Asia, the Near East, North Africa, and South Asia. No guarantee is made or implied that grants will be awarded in all themes and for all countries listed. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.14 Nancy M. Morris, Secretary. [FR Doc. E6–3898 Filed 3–16–06; 8:45 am] I. Funding Opportunity Description Authority: Overall grant making authority for this program is contained in the Mutual Educational and Cultural Exchange Act of 1961, Public Law 87– 256, as amended, also known as the Fulbright-Hays Act. The purpose of the Act is ‘‘to enable the Government of the United States to increase mutual understanding between the people of the United States and the people of other countries; to strengthen the ties which unite us with other nations by demonstrating the educational and cultural interests, developments, and achievements of the people of the United States and other nations and thus to assist in the development of friendly, sympathetic and peaceful relations between the United States and the other countries of the world.’’ The funding authority for the program above is provided through legislation. BILLING CODE 8010–01–P DEPARTMENT OF STATE [Public Notice 5342] sroberts on PROD1PC70 with NOTICES Bureau of Educational and Cultural Affairs (ECA) Request for Grant Proposals: International Sports Programming Initiative Announcement Type: New Grant. Funding Opportunity Number: ECA/ PE/C/WHA–EAP–06–34. Catalog of Federal Domestic Assistance Number: 00.000. Key Dates: Application Deadline: May 11, 2006. Executive Summary: The Office of Citizen Exchanges of the Bureau of Educational and Cultural Affairs announces an open competition for International Sports Programming Initiative. Public and private non-profit organizations meeting the provisions described in Internal Revenue Code section 26 U.S.C. 501(c)(3) may submit proposals to discuss approaches designed to enhance and improve the infrastructure of youth sports programs in the countries of Africa, East Asia, Near East and North Africa, and South 14 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 16:52 Mar 16, 2006 Jkt 208001 Purpose Overview: The Office of Citizen Exchanges welcomes proposals that directly respond to the following thematic areas. Given budgetary limitations, projects for other themes and other countries not listed below will not be eligible for consideration under the FY–2006 International Sports Program Initiative. In Africa, the following countries are eligible: Democratic Republic of Congo, Ethiopia, Guinea, Liberia, Rwanda, Tanzania and Uganda. In East Asia eligible countries are: Cambodia, China, Indonesia, Malaysia, Philippines and Thailand. In PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 the Near East and North Africa eligible countries are: Algeria, Bahrain, Egypt, Kuwait, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, United Arab Emirates, and Yemen. Eligible countries in South Asia are: Afghanistan, Bangladesh, India, Nepal, Pakistan and Sri Lanka. Only single country projects are eligible. Themes (1) Training Sports Coaches The World Summit on Physical Education (Berlin, 1999) stated that a ‘‘quality physical education helps children to develop the patterns of interest in physical activity, which are essential for healthy development and which lay the foundation for healthy, adult lifestyles.’’ Coaches are critical to the accomplishment of this goal. A coach not only needs to be qualified to provide the technical assistance required by young athletes to improve, but must also understand how to aid a young person to discover how success in athletics can be translated into achievement in the development of life skills and in the classroom. Projects submitted in response to this theme would be aimed at aiding youth, secondary school and university coaches in the target countries in the development and implementation of appropriate training methodologies, through seminars and outreach. The goal is to ensure the optimal technical proficiency among the coaches participating in the program while also emphasizing the role sports can play in the long-term economic well being of youth. (2) Youth Sports Management Exchange Exchanges funded under this theme would help American and foreign youth sport coaches, adult sponsors, and sports associations officials share their experience in managing and organizing youth sports activities, particularly in financially challenging circumstances, and would contribute to a better understanding of the role of sports as a significant factor in educational success. Americans are in a good position to convey to foreign counterparts the importance of linking success in sports to educational achievement and how these two factors can contribute to short-term and long-term economic prospects. (3) Youth With Disability Exchanges supported by this theme are designed to promote and sponsor sports, recreation, fitness and leisure events for children and adults with physical disabilities. Project goals include improving the quality of life for E:\FR\FM\17MRN1.SGM 17MRN1

Agencies

[Federal Register Volume 71, Number 52 (Friday, March 17, 2006)]
[Notices]
[Pages 13882-13884]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-3898]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53472; File No. SR-NYSE-2006-18]


Self-Regulatory Organizations; New York Stock Exchange, LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Rule 104, Dealings by Specialists

March 13, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on March 8, 2006, 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 and 
II below, which Items have been prepared by the Exchange. The Exchange 
filed the proposal as a ``non-controversial'' rule change pursuant to 
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 
upon filing with the Commission.\5\ 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)(6).
    \5\ The NYSE has asked the Commission to waive the 5-day pre-
filing notice requirement and the 30-day operative delay. See 
Section 19(b)(3)(A) of the Act, and Rule 19b-4(f)(6)(iii) 
thereunder. 15 U.S.C. 78s(b)(1), 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend NYSE Rules 104.12 and .13 concerning 
investment accounts and investment positions in specialty securities 
for securities issued by the Exchange. The text of the proposed rule 
change is available on NYSE's Web site, https://www.nyse.com, at 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 Exchange included statements 
concerning the purpose of and basis for the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV 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 Rule 104 (Dealings by Specialists) governs specialists' 
dealings in their specialty securities. Trades conducted by a 
specialist in specialty securities are effected in the specialist's 
dealer account. Under NYSE Rule 104.12, a specialist may assign part of 
his or her dealer account position to an investment account, provided 
that such assignment does not create a short position in the 
specialist's dealer account.
    Additionally, NYSE Rule 104.12 prohibits the assignment to the 
investment account of any position or part thereof that was purchased 
on nonstabilizing ticks, i.e., a ``plus'' tick (at a price higher than 
the last trade) or ``zero plus tick'' (higher than the last different 
trade). In order to assign a position to an investment account, a 
specialist's purchases in that security must be at least 75% 
stabilizing for that day and the calendar week encompassing the 
purchase of that security.
    Similarly, positions in the dealer account are netted with 
positions in an investment account. Thus, if the specialist is short in 
the dealer account, but has a long position in the investment account 
that exceeds the short dealer position, the specialist is considered to 
be net long. In that situation, a specialist may not liquidate the 
short dealer account position by purchasing on a plus tick; nor may the 
specialist purchase on a zero plus tick more than 50% of the stock that 
is being offered in the market at that time, and, in no event may the 
specialist purchase the final 100 shares offered.
    NYSE Rule 104.13 requires that transactions effected in specialty 
stocks for the accounts of specified persons affiliated with or related 
to a specialist must be for investment purposes and executed in 
accordance with certain restrictions relating to the price at which 
transactions may take place, known as ``tick'' restrictions. The 
accounts specified in the rule include accounts of employees or parties 
active in the business of the specialist, the spouse or children 
residing in the same household as a specialist or person active in the 
specialist business, and any approved person (individual or entity in a 
control relationship) of the specialist, other than an approved person 
entitled to an exemption pursuant to NYSE Rule 98 (Restrictions on an 
Approved Person Associated with a Specialist's Member Organization).
    NYSE-Archipelago Merger. The merger of NYSE and Archipelago 
Holdings, Inc. has received Commission approval and was completed on 
March 7, 2006.\6\ Trading in the common stock of the newly-formed, 
publicly-traded holding company NYSE Group, Inc. on the Exchange will 
commence on March 8, 2006, under the symbol ``NYX.''
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 53382 (February 27, 
2006), 71 FR 11251 (March 6, 2006) (SR-NYSE-2005-77).
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    Under the terms of the merger, members of the Exchange, i.e., 
seatholders on the NYSE, will receive shares of NYX stock in exchange 
for their membership interests. In certain circumstances, where the 
purchase of an Exchange membership was the subject of a financing 
arrangement with the member organization a seat holder was associated 
with, the member organization will be eligible to receive the NYX 
shares being exchanged for a membership. These NYX shares will be held 
in a special account separate from the specialist's dealer and 
investment accounts.
    The NYX shares received as a result of this exchange will be 
subject to transfer restrictions set forth in the amended and restated 
Certificate of Incorporation of NYSE Group, Inc. These transfer 
restrictions prohibit any direct or indirect assignment, sale, 
exchange, transfer, tender or any other disposition of NYX shares. 
Except as otherwise provided in Article IV,

[[Page 13883]]

Section 4 of the amended and restated Certificate of Incorporation, 
these restrictions are scheduled to expire after 12, 24, and 36 months 
subsequent to the issuance date of the shares, for one-third of the 
total shares after each such 12-month interval. The specialist 
organization will be informed by the transfer agent as to the specific 
date the restrictions will be lifted for each tranche. It is only when 
the restrictions are removed that these shares will be transferred to 
the specialist's dealer or investment account and will be fully subject 
to NYSE Rule 104.
    Among those who will receive restricted NYX shares will be 
seatholders who are associated with the member organization which is 
registered as the specialist in NYX stock, and that specialist member 
organization itself.
    Proposed Rule Change. The Exchange proposes to amend NYSE Rules 
104.12 and .13 to exempt from these provisions any positions held by a 
specialist or his or her organization in a specialty security issued by 
NYSE Group, Inc. and listed on the NYSE which is restricted as to sale 
or transfer. This exemption will last during the pendency of such 
restriction as to sale or transfer. The Exchange believes that given 
that these shares cannot be used in the specialist's normal market 
making activities, the application of NYSE Rules 104.12 and .13 to 
these positions does not serve any useful purpose.
    The provisions of NYSE Rule 104.12 are designed to permit 
specialists to establish investment positions in specialty securities 
while recognizing that all trading activity and positions in such 
specialty securities must be available for use in the specialist's 
dealer activities. The restrictions contained in NYSE Rule 104.13 help 
ensure that associated persons of specialists do not trade in a 
destabilizing manner any NYSE security in which the related specialist 
organization is registered. Since the shares of NYX that are to be 
received by the specialists, the specialist member organization and any 
associated parties in exchange for their membership interests will be, 
for all practical purposes, unable to be used in any manner until the 
restrictions described above are removed, the Exchange believes that it 
would be inappropriate to include them within the purview of NYSE Rules 
104.12 and .13.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \7\ that an Exchange have rules that 
are designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 written comments on 
the proposed rule change.

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

    Because the foregoing rule does not (i) significantly affect the 
protection of investors or the public interest; (ii) does not impose 
any significant burden on competition; and (iii) by its terms, does not 
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, provided that the 
Exchange has given the Commission written notice of its intent to file 
the proposed rule change at least five business days prior to the date 
of filing of the proposed rule change or such shorter time as 
designated by the Commission, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\ Accordingly, a proposed rule change filed under 
Rule 19b-4(f)(6) under the Act \10\ normally may not become operative 
prior to 30 days after the date of filing. However, Rule 19b-
4(f)(6)(iii) \11\ permits the Commission to designate a shorter time if 
such action is consistent with the protection of investors and the 
public interest.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The NYSE has requested that the Commission waive the 5-day pre-
filing notice requirement and the 30-day operative delay, which would 
make the rule change effective and operative upon filing. The 
Commission believes that waiver of the 5-day pre-filing notice and the 
30-day operative delay is consistent with the protection of investors 
and the public interest, because it allows the NYSE to implement this 
proposal as soon as possible upon the commencement of trading of NYX 
stock on March 8, 2006, and thereby accommodates the receipt and 
retention of restricted NYX shares by the specialist in a special 
account separate and apart from the specialist's dealer or investment 
accounts and addresses the treatment of such shares under NYSE Rule 
104. For these reasons, the Commission designates the proposal to be 
effective and operative upon filing with the Commission.\12\
---------------------------------------------------------------------------

    \12\ For the purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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.\13\
---------------------------------------------------------------------------

    \13\ See 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, is consistent with the Act. 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-2006-18 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-2006-18. 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

[[Page 13884]]

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 will also 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-2006-18 and should be 
submitted by April 7, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
Nancy M. Morris,
Secretary.
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    \14\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E6-3898 Filed 3-16-06; 8:45 am]
BILLING CODE 8010-01-P
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