Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto Relating to a Retroactive Suspension of Transaction Charges for Specialist Orders in the Nasdaq-100 Tracking Stock® (QQQQ), 45083-45084 [E6-12842]

Download as PDF Federal Register / Vol. 71, No. 152 / Tuesday, August 8, 2006 / Notices For the Commission, by the Division of Market Regulation, pursuant to delegated authority.17 Nancy M. Morris, Secretary. [FR Doc. E6–12839 Filed 8–7–06; 8:45 am] concerning the purpose of, and basis for, the proposed rule change, as amended, and discussed any comments it received on the proposal. The text of these statements may be examined at the places specified in Item IV below, and is set forth in Sections A, B, and C below. Amex has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54262; File No. SR–Amex– 2006–64] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto Relating to a Retroactive Suspension of Transaction Charges for Specialist Orders in the Nasdaq-100 Tracking Stock (QQQQ) August 1, 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 July 7, 2006, the American Stock Exchange LLC (‘‘Amex’’ or ‘‘Exchange’’) submitted to 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 Amex. On July 27, 2006, the Exchange submitted Amendment No. 1 to the proposed rule change.3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to retroactively apply a suspension of transaction charges for specialist orders in connection with the trading of the Nasdaq-100 Index Tracking Stock (Symbol: QQQQ) from July 1, 2006 through July 12, 2006. The text of the proposed rule change is available on Amex’s Web site (http:// www.amex.com), at Amex’s principal office, and at the Commission’s Public Reference Room. jlentini on PROD1PC65 with NOTICES 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 17 17 CFR 200.30–3(a)(12). U.S.C 78s(b)(1). 2 17 CFR 240.19b–4. 3 Amendment No. 1 replaced and superseded the original filing in its entirety. 1 15 VerDate Aug<31>2005 20:06 Aug 07, 2006 Jkt 208001 A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to retroactively apply a suspension of transaction charges for specialist orders in the QQQQ from July 1, 2006 through July 12, 2006. The Exchange previously extended the suspension of the QQQQ from March 1, 2006 through June 30, 2006.4 The Exchange, in a companion filing, also proposed the adoption of a suspension of transaction charges for specialist orders in the Nasdaq-100 Tracking Stock (QQQQ) from July 13, 2006 through August 31, 2006.5 In order to waive transaction fees for specialist orders in the QQQQ from July 1, 2006 through August 31, 2006, the Exchange has proposed to retroactively suspend transaction fees for specialist transactions from July 1, 2006 through July 12, 2006. Specialist orders currently are charged $0.0034 ($0.34 per 100 shares), capped at $300 per trade (88,235 shares). Effective December 1, 2004, the Nasdaq-100 Index Tracking Stock  (formerly ‘‘QQQ’’) transferred its listing from Amex to The Nasdaq Stock Market, Inc (‘‘Nasdaq’’). It now trades on Nasdaq under the symbol QQQQ. After the transfer, Amex began trading QQQQ on an unlisted trading privileges basis. The Exchange believes that the retroactive suspension of transaction charges for specialist transactions in the QQQQ from July 1, 2006 through July 12, 2006 is consistent with the adoption of the proposal to suspend transaction charges for specialist orders generally in the QQQQ through August 31, 2006. 4 See, e.g., Securities Exchange Act Release Nos. 53871 (May 25, 2006), 71 FR 31236 (June 1, 2006) and 54094 (July 3, 2006), 71 FR 39135 (July 11, 2006) (SR–Amex–2006–42) (retroactively applying a suspension of transaction charges for specialist orders in connection with the trading of the QQQQ from March 1, 2006, through April 5, 2006). See also Securities Exchange Act Release No. 53701 (April 21, 2006), 71 FR 25253 (April 28, 2006) (SR– Amex–2006–30) (suspending specialist transaction charges in connection with the QQQQ from April 6, 2006, through June 30, 2006). 5 See Securities Exchange Act Release No. 54227 (July 27, 2006). PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 45083 The Exchange further believes that a retroactive suspension of transaction fees on specialist orders in the QQQQ is appropriate to enhance the competitiveness of executions on Amex. The Exchange proposes to amend the Amex Fee Schedule to indicate that transaction charges for specialist orders in the QQQQ have been suspended from July 1, 2006 through August 31, 2006. As provided in the companion filing, the Exchange submits that a suspension of transaction fees for specialist orders in connection with the QQQQ is consistent with Section 6(b)(4) of the Act.6 Specifically, the Exchange believes that suspending transaction charges for QQQQ specialist orders is an equitable allocation of reasonable fees among Exchange members. The Exchange believes that the fact that specialists have greater obligations than other members and are also subject to other Exchange fees, in addition to transaction fees, supports this proposal to retroactively apply the fee suspension. The Exchange notes that specialists are subject to a variety of Exchange fees other than transaction charges, such as a floor clerk fee, a floor facility fee, a post fee, and a registration fee.7 In addition, specialists and other floor members of the Exchange are subject to technology and membership fees.8 Certain market participants, such as customers, non-member broker-dealers and market-makers, and member brokerdealers, are not subject to the majority of these fees. In addition, a specialist unit, in order to adequately ‘‘make a market’’ in assigned securities, must be sufficiently staffed 9 and have adequate technology resources to handle the volume of orders (especially in the QQQQ) that are sent to the Exchange. The Exchange believes that these operational costs borne by specialists further support the proposal to temporarily suspend QQQQ transaction fees on specialist orders. 6 Section 6(b)(4) states that the rules of a national securities exchange must provide for an equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities. 15 U.S.C. 78f(b)(4). 7 The floor clerk, floor facility, post, and registration fees, on an annual basis, are $900, $2,400, $1,000, and $800, respectively. 8 A technology fee of $6,000 per year is assessed on all specialists and other floor participants at the Exchange. Annual membership dues of $1,500 must be paid by all members while annual membership fees are payable depending on the type of membership and circumstances. Non-members are not subject to these fees. 9 See Securities Exchange Act Release No. 53386 (February 28, 2006), 71 FR 11250 (March 6, 2006) (requiring specialists to employ an adequate number of clerks). E:\FR\FM\08AUN1.SGM 08AUN1 45084 Federal Register / Vol. 71, No. 152 / Tuesday, August 8, 2006 / Notices (B) institute proceedings to determine whether the proposed rule change should be disapproved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 Nancy M. Morris, Secretary. [FR Doc. E6–12842 Filed 8–7–06; 8:45 am] Specialists have certain obligations under Exchange rules, as well as the Act, that do not exist for other market participants. For example, pursuant to Amex Rule 170, a specialist is required to maintain a fair and orderly market in his or her assigned securities. Other members of the Exchange, as well as non-member market participants, do not have this obligation. As a result, the Exchange believes that the proposed retroactive suspension of transaction charges for specialist orders in the QQQQ is reasonable and equitable, given the obligations that specialists must adhere to in making markets. The Exchange further submits that the fee suspension will provide greater incentive to specialists to continue to provide market liquidity, rendering the Exchange an attractive venue for market participants to execute orders. Electronic Comments [Release No. 34–54260; File No. SR– NASDAQ–2006–024] • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–Amex–2006–64 on the subject line. Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Technical and Conforming Changes to Nasdaq’s 7000 Series Rules 2. Statutory Basis Paper Comments August 1, 2006. The Exchange believes that the proposed rule change, as amended, 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, and is an equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities. • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–Amex–2006–64. 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 office of Amex. 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–Amex–2006–64 and should be submitted on or before August 29, 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 July 31, 2006, The NASDAQ Stock Market LLC (‘‘Nasdaq’’) 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 Nasdaq. Nasdaq has filed the proposed rule change 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 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes that the proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the 1934 Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. jlentini on PROD1PC65 with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents, the Commission will: (A) By order approve such proposed rule change, as amended, or 10 15 11 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). VerDate Aug<31>2005 20:06 Aug 07, 2006 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: 12 17 Jkt 208001 PO 00000 CFR 200.30–3(a)(12). Frm 00091 Fmt 4703 Sfmt 4703 BILLING CODE 8010–01–P SECURTITES AND EXCHANGE COMMISSION / I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to conform the Rule 7000 Series of Nasdaq’s rules to certain changes made to the Rule 7000 Series of the rules of the National Association of Securities Dealers, Inc. (‘‘NASD’’) since approval of Nasdaq’s rules by the Commission in January 2006 and to correct certain errors in the approved rules. Nasdaq proposes to implement the proposed rule change on August 1, 2006. The text of the proposed rule change is available on Nasdaq’s Web site at http://www.nasdaq.com, at the principal office of Nasdaq, and at the Commission’s Public Reference Room. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 2 17 E:\FR\FM\08AUN1.SGM 08AUN1

Agencies

[Federal Register Volume 71, Number 152 (Tuesday, August 8, 2006)]
[Notices]
[Pages 45083-45084]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-12842]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54262; File No. SR-Amex-2006-64]


Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto 
Relating to a Retroactive Suspension of Transaction Charges for 
Specialist Orders in the Nasdaq-100 Tracking Stock[supreg] (QQQQ)

 August 1, 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 July 7, 2006, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') submitted to 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 Amex. On July 27, 
2006, the Exchange submitted Amendment No. 1 to the proposed rule 
change.\3\ The Commission is publishing this notice to solicit comments 
on the proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 replaced and superseded the original filing 
in its entirety.
---------------------------------------------------------------------------

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

    The Exchange proposes to retroactively apply a suspension of 
transaction charges for specialist orders in connection with the 
trading of the Nasdaq-100 Index Tracking Stock[supreg] (Symbol: QQQQ) 
from July 1, 2006 through July 12, 2006.
    The text of the proposed rule change is available on Amex's Web 
site (http://www.amex.com), at Amex'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, as 
amended, and discussed any comments it received on the proposal. The 
text of these statements may be examined at the places specified in 
Item IV below, and is set forth in Sections A, B, and C below. Amex 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to retroactively apply a suspension of 
transaction charges for specialist orders in the QQQQ from July 1, 2006 
through July 12, 2006. The Exchange previously extended the suspension 
of the QQQQ from March 1, 2006 through June 30, 2006.\4\ The Exchange, 
in a companion filing, also proposed the adoption of a suspension of 
transaction charges for specialist orders in the Nasdaq-100 Tracking 
Stock (QQQQ) from July 13, 2006 through August 31, 2006.\5\ In order to 
waive transaction fees for specialist orders in the QQQQ from July 1, 
2006 through August 31, 2006, the Exchange has proposed to 
retroactively suspend transaction fees for specialist transactions from 
July 1, 2006 through July 12, 2006.
---------------------------------------------------------------------------

    \4\ See, e.g., Securities Exchange Act Release Nos. 53871 (May 
25, 2006), 71 FR 31236 (June 1, 2006) and 54094 (July 3, 2006), 71 
FR 39135 (July 11, 2006) (SR-Amex-2006-42) (retroactively applying a 
suspension of transaction charges for specialist orders in 
connection with the trading of the QQQQ from March 1, 2006, through 
April 5, 2006). See also Securities Exchange Act Release No. 53701 
(April 21, 2006), 71 FR 25253 (April 28, 2006) (SR-Amex-2006-30) 
(suspending specialist transaction charges in connection with the 
QQQQ from April 6, 2006, through June 30, 2006).
    \5\ See Securities Exchange Act Release No. 54227 (July 27, 
2006).
---------------------------------------------------------------------------

    Specialist orders currently are charged $0.0034 ($0.34 per 100 
shares), capped at $300 per trade (88,235 shares). Effective December 
1, 2004, the Nasdaq-100 Index Tracking Stock [supreg] (formerly 
``QQQ'') transferred its listing from Amex to The Nasdaq Stock Market, 
Inc (``Nasdaq''). It now trades on Nasdaq under the symbol QQQQ. After 
the transfer, Amex began trading QQQQ on an unlisted trading privileges 
basis.
    The Exchange believes that the retroactive suspension of 
transaction charges for specialist transactions in the QQQQ from July 
1, 2006 through July 12, 2006 is consistent with the adoption of the 
proposal to suspend transaction charges for specialist orders generally 
in the QQQQ through August 31, 2006. The Exchange further believes that 
a retroactive suspension of transaction fees on specialist orders in 
the QQQQ is appropriate to enhance the competitiveness of executions on 
Amex. The Exchange proposes to amend the Amex Fee Schedule to indicate 
that transaction charges for specialist orders in the QQQQ have been 
suspended from July 1, 2006 through August 31, 2006.
    As provided in the companion filing, the Exchange submits that a 
suspension of transaction fees for specialist orders in connection with 
the QQQQ is consistent with Section 6(b)(4) of the Act.\6\ 
Specifically, the Exchange believes that suspending transaction charges 
for QQQQ specialist orders is an equitable allocation of reasonable 
fees among Exchange members. The Exchange believes that the fact that 
specialists have greater obligations than other members and are also 
subject to other Exchange fees, in addition to transaction fees, 
supports this proposal to retroactively apply the fee suspension.
---------------------------------------------------------------------------

    \6\ Section 6(b)(4) states that the rules of a national 
securities exchange must provide for an equitable allocation of 
reasonable dues, fees, and other charges among its members and 
issuers and other persons using its facilities. 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange notes that specialists are subject to a variety of 
Exchange fees other than transaction charges, such as a floor clerk 
fee, a floor facility fee, a post fee, and a registration fee.\7\ In 
addition, specialists and other floor members of the Exchange are 
subject to technology and membership fees.\8\ Certain market 
participants, such as customers, non-member broker-dealers and market-
makers, and member broker-dealers, are not subject to the majority of 
these fees. In addition, a specialist unit, in order to adequately 
``make a market'' in assigned securities, must be sufficiently staffed 
\9\ and have adequate technology resources to handle the volume of 
orders (especially in the QQQQ) that are sent to the Exchange. The 
Exchange believes that these operational costs borne by specialists 
further support the proposal to temporarily suspend QQQQ transaction 
fees on specialist orders.
---------------------------------------------------------------------------

    \7\ The floor clerk, floor facility, post, and registration 
fees, on an annual basis, are $900, $2,400, $1,000, and $800, 
respectively.
    \8\ A technology fee of $6,000 per year is assessed on all 
specialists and other floor participants at the Exchange. Annual 
membership dues of $1,500 must be paid by all members while annual 
membership fees are payable depending on the type of membership and 
circumstances. Non-members are not subject to these fees.
    \9\ See Securities Exchange Act Release No. 53386 (February 28, 
2006), 71 FR 11250 (March 6, 2006) (requiring specialists to employ 
an adequate number of clerks).

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[[Page 45084]]

    Specialists have certain obligations under Exchange rules, as well 
as the Act, that do not exist for other market participants. For 
example, pursuant to Amex Rule 170, a specialist is required to 
maintain a fair and orderly market in his or her assigned securities. 
Other members of the Exchange, as well as non-member market 
participants, do not have this obligation. As a result, the Exchange 
believes that the proposed retroactive suspension of transaction 
charges for specialist orders in the QQQQ is reasonable and equitable, 
given the obligations that specialists must adhere to in making 
markets. The Exchange further submits that the fee suspension will 
provide greater incentive to specialists to continue to provide market 
liquidity, rendering the Exchange an attractive venue for market 
participants to execute orders.
2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, 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, and is 
an equitable allocation of reasonable dues, fees, and other charges 
among its members and issuers and other persons using its facilities.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change does not impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the 1934 Act.

 C. Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

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

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

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change, 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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-Amex-2006-64 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.
    All submissions should refer to File Number SR-Amex-2006-64. 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 office of Amex. 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-Amex-2006-64 and should be submitted on or before August 29, 2006.
---------------------------------------------------------------------------

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

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
Nancy M. Morris,
Secretary.
 [FR Doc. E6-12842 Filed 8-7-06; 8:45 am]
BILLING CODE 8010-01-P