Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Definition of Crowd and To Clarify the Requirements of Exchange Rule 70.20(f), 54862-54864 [E6-15499]
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54862
Federal Register / Vol. 71, No. 181 / Tuesday, September 19, 2006 / Notices
2. Telecommunications Operations
costs of supporting the external market
data vendor network;
3. Data Products account management
and auditing function with the market
data vendors;
4. Market Operations costs to support
symbol maintenance, and other data
integrity issues;
5. Overhead costs, including
management support of the Processor,
Human Resources, Finance, Legal, and
Administrative Services.
e. Processor costs excluded from the
calculation of net distributable
operating income include trade
execution costs for transactions
executed using a Nasdaq service and
trade report collection costs reported
through a Nasdaq service, as such
services are market functions for which
Participants electing to use such
services pay market rate.
f. For the purposes of this provision,
the following definitions shall apply:
1. ‘‘Quote engine’’ shall mean the
Nasdaq’s NT or Tandem system that is
operated by Nasdaq to collect quotation
information for Eligible Securities;
2. ‘‘Trade engine’’ shall mean the
Nasdaq Tandem system that is operated
by Nasdaq for the purpose of collecting
last sale information in Eligible
Securities.
3. At the time a Participant
implements a Processor-approved
electronic interface with the Processor,
the Participant will become eligible to
receive revenue.
4. Processor shall endeavor to provide
Participants with written estimates of
each Participant’s quarterly net
distributable operating income within
45 calendar days of the end of the
quarter, and estimated quarterly
payments or billings shall be made on
the basis of such estimates. All quarterly
payments or billings shall be made to
each eligible Participant within 45 days
following the end of each calendar
quarter in which the Participant is
eligible to receive revenue, provided
that each quarterly payment or billing
shall be reconciled against a
Participant’s cumulative year-to-date
payment or billing received to date and
adjusted accordingly, and further
provided that the total of such estimated
payments or billings shall be reconciled
at the end of each calendar year and, if
necessary, adjusted by March 31st of the
following year. Interest shall be
included in quarterly payments and in
adjusted payments made on March 31st
of the following year. Such interest shall
accrue monthly during the period in
which revenue was earned and not yet
paid and will be based on the 90-day
Treasury bill rate in effect at the end of
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16:49 Sep 18, 2006
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the quarter in which the payment is
made. Monthly interest shall start
accruing 45 days following the month in
which it is earned and accrue until the
date on which the payment is made.
In conjunction with calculating
estimated quarterly and reconciled
annual payments under this Exhibit 1,
the Processor shall submit to the
Participants a quarterly itemized
statement setting forth the basis upon
which net operating income was
calculated, including a quarterly
itemized statement of the Processor
costs set forth in Paragraph 3 of this
Exhibit. Such Processor costs and Plan
revenues shall be adjusted annually
based solely on the Processor’s quarterly
itemized statement audited pursuant to
Processor’s annual audit. Processor shall
pay or bill Participants for the audit
adjustments within thirty days of
completion of the annual audit. By
majority vote of the Operating
Committee, the Processor shall engage
an independent auditor to audit the
Processor’s costs or other calculation(s),
the cost of which audit shall be shared
equally by all Participants. The
Processor agrees to cooperate fully in
providing the information necessary to
complete such audit.
[FR Doc. E6–15515 Filed 9–18–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54427; File No. SR–NYSE–
2006–58]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend the
Definition of Crowd and To Clarify the
Requirements of Exchange Rule
70.20(f)
September 12, 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
September 1, 2006, the New York Stock
Exchange LLC (‘‘NYSE’’ or ‘‘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 proposed rule change
as a ‘‘non-controversial’’ rule change
pursuant to Section 19(b)(3)(A) of the
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00068
Fmt 4703
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Act 3 and Rule 19b–4(f)(6) 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 Exchange proposes to amend
Exchange Rule 70.30, which sets forth
the definition of Crowd, and to clarify
the requirements of Exchange Rule
70.20(f). The text of the proposed rule
change is available on the NYSE’s Web
site at https://www.nyse.com, at the
NYSE’s Office of the Secretary, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item 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
The Exchange’s Hybrid MarketSM
integrates the auction market with
automated trading. Essential to the
auction market is the interaction among
members on the Floor and between
Floor brokers and orders in the Display
Book System, that creates
opportunities for price improvement,
provides information about changing
market conditions, and serves as a
catalyst to trading.5 Exchange Rule
70.30 defines a Crowd as ‘‘* * * five
contiguous panels at any one post where
securities are traded.’’ 6 Exchange Rule
70.30 further requires that Floor brokers
be in the Crowd in order to represent
orders that the Floor broker has in his
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
5 See Securities Exchange Act Release No. 53539
(March 22, 2006), 71 FR 16353 (March 31, 2006).
6 Telephone conversation between Deanna Logan,
Director, Office of the General Counsel, NYSE, and
Cyndi Rodriguez, Special Counsel, Division of
Market Regulation, Commission, on September 7,
2006.
4 17
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Federal Register / Vol. 71, No. 181 / Tuesday, September 19, 2006 / Notices
or her agency interest files (i.e., in order
to ‘‘e-Quote’’). Pursuant to Exchange
Rule 70.30, a Floor broker may only
have agency interest files or e-Quote in
one Crowd at a time.
As the Exchange continues its
implementation of the Hybrid MarketSM
it has gained experience operating in the
Hybrid MarketSM environment. Based
on this experience, the Exchange seeks
to amend the definition of Crowd in
order to better facilitate the critical
interaction among members on the
Floor.
In practice, the five contiguous panel
definition has proven too rigid a
concept. The Exchange Floor is made up
of five trading rooms. Trading rooms
have large, in some instances rounded,
posts that each contain distinct panels
at which designated securities are
traded. The post configuration on the
Floor is such that, in certain instances,
individuals standing at two separate
posts are closer to each other than
individuals standing at the first and fifth
contiguous panels of the same post. For
example, a Floor broker standing in the
Crowd at Post 1 Panel B is easily able
to see and hear the members located at
Post 2 Panel L because they are located
directly across from each other. In
contrast, a Floor broker at Post 1 Panel
B cannot easily see or hear the members
located at Post 1 Panel G, which is
exactly five contiguous panels away.
Specifically, Panel B is on the opposite
side of Post 1 from Panel G and thus the
Floor broker must walk partly around
Post 1 in order to effectively interact
with the members at Post 1 Panel G.
Nevertheless, under the current rule, the
Floor broker standing at Post 1 Panel B
is considered part of the Crowd that
includes Post 1 Panel G. Further,
pursuant to the current rule, in order for
the Floor broker at Post 1 Panel B to
represent an order in a security traded
at Post 2 Panel L, the Floor broker
would first have to withdraw his or her
agency interest or e-Quote from the Post
1 Panels B–G Crowd.
In this filing, the Exchange proposes
to amend the definition of the Crowd in
order to reflect more accurately the
areas which most efficiently facilitate
the beneficial interaction among the
members on the Floor. The Exchange
believes that the best way to facilitate
this interaction is to re-define the
concept of Crowd from strictly
contiguous panels to encompass an area
that enables members to more efficiently
conduct business. Essentially, this is the
area in which members can see and hear
the business conducted at a group of
panels. These panels may be at one or
more posts. To accomplish this, the
Exchange proposes to divide each
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16:49 Sep 18, 2006
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trading room of the Floor into specific
areas, which will be identified on the
Floor in a recognizable way. Each area
will serve to delineate the boundaries of
the Crowd. The Crowds will be created
in such a way that when a Floor broker
is standing in a Crowd, the Floor broker
generally will be able to see and hear
the business conducted at each post/
panel within that Crowd. Similarly, the
specialists in panels included in a
Crowd will be able to see and hear the
Floor brokers who are representing
agency interests or e-Quotes in that
Crowd. In addition to physically
identifying each Crowd on the Floor in
a unique manner, the Exchange will
disseminate to its members a notice
identifying the specific post(s) and
panels comprising each Crowd.
As is the case today, once in a Crowd,
a Floor broker is able to e-Quote in all
securities located in that Crowd. If the
Floor broker leaves one Crowd in order
to work in another, the Floor broker is
required to withdraw his or her agency
interest from the Crowd he or she is
leaving. However, a Floor broker may
obtain ‘‘market looks’’ in a securities
located in other Crowds without
canceling his or her e-Quotes. In this
filing, the Exchange further seeks to
amend Rule 70.20(f) to reflect this
concept.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act in general,7 and
furthers the objectives of Section 6(b)(5)
of the Act in particular,8 in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities,
and to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system.
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 proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 9 and Rule 19b–
4(f)(6) thereunder.10
A proposed rule change filed under
Rule 19b–4(f)(6) normally may not
become operative prior to 30 days after
the date of filing.11 However, Rule 19b–
4(f)(6)(iii) 12 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange provided the Commission
with written notice of its intent to file
this proposed rule change at least five
business days prior to the date of filing
of the proposed rule change. In
addition, the Exchange has requested
that the Commission waive the 30-day
operative delay to allow the Exchange to
implement the proposed rule change
and avoid any undue confusion. The
Exchange believes that the proposed
rule change merely seeks to reflect more
accurately the areas which most
efficiently facilitate the beneficial
interaction among the trading
professionals on the Floor of the
Exchange. The Commission believes
that waiving the 30-day operative delay
is consistent with the protection of
investors and the public interest
because it would allow the Exchange to
immediately implement the revised
definition of Crowd without undue
delay and clarify in Exchange Rule
70.20(f) a Floor broker’s ability to obtain
‘‘market look’’ information while in a
Crowd. For this reason, the Commission
designates the proposal to be effective
and operative upon filing with the
Commission.13
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
11 Id.
12 17 CFR 240.19b–4(f)(6)(iii).
13 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
10 17
7 15
8 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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Federal Register / Vol. 71, No. 181 / Tuesday, September 19, 2006 / Notices
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such proposed 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.
be submitted on or before October 10,
2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
Nancy M. Morris,
Secretary.
[FR Doc. E6–15499 Filed 9–18–06; 8:45 am]
BILLING CODE 8010–01–P
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
pwalker on PRODPC60 with NOTICES
• 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–2006–58 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54429; File No. SR–Phlx–
2006–52]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing of Proposed Rule
Change, and Amendment No. 1
Thereto, Relating to Quoting
Obligations
September 12, 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 August
Paper Comments
15, 2006, the Philadelphia Stock
• Send paper comments in triplicate
Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’)
to Nancy M. Morris, Secretary,
filed with the Securities and Exchange
Securities and Exchange Commission,
Commission (‘‘Commission’’) the
100 F Street, NE., Washington, DC
proposed rule change as described in
20549–1090.
Items I, II, and III, below, which items
have been prepared by the Phlx. On
All submissions should refer to File
September 8, 2006, the Exchange filed
Number SR–NYSE–2006–58. This file
Amendment No. 1 to the proposed rule
number should be included on the
subject line if e-mail is used. To help the change.3 The Commission is publishing
this notice to solicit comments on the
Commission process and review your
proposed rule change, as amended, from
comments more efficiently, please use
only one method. The Commission will interested persons.
post all comments on the Commission’s I. Self-Regulatory Organization’s
Internet Web site (https://www.sec.gov/
Statement of the Terms of Substance of
rules/sro.shtml). Copies of the
the Proposed Rule Change
submission, all subsequent
The Phlx proposes to amend Phlx
amendments, all written statements
Rule 1014, ‘‘Obligations and
with respect to the proposed rule
Restrictions Applicable to Specialists
change that are filed with the
and Registered Options Traders,’’ by
Commission, and all written
adopting Phlx Rule 1014(b)(ii)(D)(4),
communications relating to the
which would state that Streaming Quote
proposed rule change between the
Commission and any person, other than Traders (‘‘SQTs’’),4 Remote Streaming
Quote Traders (‘‘RSQTs’’),5 and SQTs
those that may be withheld from the
public in accordance with the
14 17 CFR 200.30–3(a)(12).
provisions of 5 U.S.C. 552, will be
1 15 U.S.C. 78s(b)(1).
available for inspection and copying in
2 17 CFR 240.19b–4.
the Commission’s Public Reference
3 Amendment No. 1 made a clarifying change to
Room. Copies of such filing also will be the proposed rule text, as well as two minor
technical changes to the purpose section.
available for inspection and copying at
4 An SQT is an Exchange Registered Options
the principal office of the NYSE. All
Trader (‘‘ROT’’) who has received permission from
comments received will be posted
the Exchange to generate and submit option
without change; the Commission does
quotations electronically through AUTOM in
not edit personal identifying
eligible options to which such SQT is assigned. An
SQT may only submit such quotations while such
information from submissions. You
SQT is physically present on the floor of the
should submit only information that
Exchange. See Phlx Rule 1014(b)(ii)(A).
you wish to make available publicly. All
5 An RSQT is an ROT that is a member or member
submissions should refer to File
organization with no physical trading floor
Number SR–NYSE–2006–58 and should presence who has received permission from the
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16:49 Sep 18, 2006
Jkt 208001
PO 00000
Frm 00070
Fmt 4703
Sfmt 4703
and RSQTs that receive Directed
Orders 6 (‘‘DSQTs’’ and ‘‘DRSQTs,’’
respectively) would be deemed not to be
assigned in any option series until the
time to expiration for such series is less
than nine months. Therefore, according
to the Exchange, the market making
obligations described in Phlx Rule
1014(b)(ii)(D) would not apply to SQTs,
RSQTs, DSQTs and DRSQTs respecting
series with an expiration of nine months
or greater. The Exchange proposes to
adopt the rule on a six-month pilot
basis, beginning on the date of approval
of the proposed rule change. The text of
the proposed rule change, as amended,
is available on the Phlx’s Web site at
https://www.phlx.com, the Phlx’s Office
of the Secretary, 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
Phlx included statements concerning
the purpose of and basis for the
proposed rule change, as amended, 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 Phlx 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 purpose of the proposed rule
change, as amended, is to mitigate the
Exchange’s quote traffic and capacity by
relaxing the quoting obligations
applicable to SQTs, RSQTs, DSQTs, and
DRSQTs, thereby reducing the number
of quotations required to be submitted
on the Exchange.
Current Quoting Obligations.
Currently, SQTs and RSQTs that do not
receive Directed Orders in a Streaming
Quote Option 7 are responsible to quote
Exchange to generate and submit option quotations
electronically through AUTOM in eligible options
to which such RSQT has been assigned. An RSQT
may only submit such quotations electronically
from off the floor of the Exchange. See Phlx Rule
1014(b)(ii)(B).
6 The term ‘‘Directed Order’’ means any customer
order (other than a stop or stop-limit order as
defined in Phlx Rule 1066) to buy or sell which has
been directed to a particular specialist, RSQT, or
SQT by an Order Flow Provider. See Phlx Rule
1080(l)(i)(A).
7 A Streaming Quote Option is an option in which
SQTs may generate and submit option quotations if
such SQT is physically present on the Exchange
E:\FR\FM\19SEN1.SGM
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]]>Agencies
[Federal Register Volume 71, Number 181 (Tuesday, September 19, 2006)]
[Notices]
[Pages 54862-54864]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-15499]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54427; File No. SR-NYSE-2006-58]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the Definition of Crowd and To Clarify the Requirements of
Exchange Rule 70.20(f)
September 12, 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 September 1, 2006, the New York Stock Exchange LLC (``NYSE'' or
``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 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 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)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Exchange Rule 70.30, which sets
forth the definition of Crowd, and to clarify the requirements of
Exchange Rule 70.20(f). The text of the proposed rule change is
available on the NYSE's Web site at https://www.nyse.com, at the NYSE's
Office of the Secretary, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item 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
The Exchange's Hybrid Market\SM\ integrates the auction market with
automated trading. Essential to the auction market is the interaction
among members on the Floor and between Floor brokers and orders in the
Display Book[supreg] System, that creates opportunities for price
improvement, provides information about changing market conditions, and
serves as a catalyst to trading.\5\ Exchange Rule 70.30 defines a Crowd
as ``* * * five contiguous panels at any one post where securities are
traded.'' \6\ Exchange Rule 70.30 further requires that Floor brokers
be in the Crowd in order to represent orders that the Floor broker has
in his
[[Page 54863]]
or her agency interest files (i.e., in order to ``e-Quote''). Pursuant
to Exchange Rule 70.30, a Floor broker may only have agency interest
files or e-Quote in one Crowd at a time.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 53539 (March 22,
2006), 71 FR 16353 (March 31, 2006).
\6\ Telephone conversation between Deanna Logan, Director,
Office of the General Counsel, NYSE, and Cyndi Rodriguez, Special
Counsel, Division of Market Regulation, Commission, on September 7,
2006.
---------------------------------------------------------------------------
As the Exchange continues its implementation of the Hybrid
Market\SM\ it has gained experience operating in the Hybrid Market\SM\
environment. Based on this experience, the Exchange seeks to amend the
definition of Crowd in order to better facilitate the critical
interaction among members on the Floor.
In practice, the five contiguous panel definition has proven too
rigid a concept. The Exchange Floor is made up of five trading rooms.
Trading rooms have large, in some instances rounded, posts that each
contain distinct panels at which designated securities are traded. The
post configuration on the Floor is such that, in certain instances,
individuals standing at two separate posts are closer to each other
than individuals standing at the first and fifth contiguous panels of
the same post. For example, a Floor broker standing in the Crowd at
Post 1 Panel B is easily able to see and hear the members located at
Post 2 Panel L because they are located directly across from each
other. In contrast, a Floor broker at Post 1 Panel B cannot easily see
or hear the members located at Post 1 Panel G, which is exactly five
contiguous panels away. Specifically, Panel B is on the opposite side
of Post 1 from Panel G and thus the Floor broker must walk partly
around Post 1 in order to effectively interact with the members at Post
1 Panel G. Nevertheless, under the current rule, the Floor broker
standing at Post 1 Panel B is considered part of the Crowd that
includes Post 1 Panel G. Further, pursuant to the current rule, in
order for the Floor broker at Post 1 Panel B to represent an order in a
security traded at Post 2 Panel L, the Floor broker would first have to
withdraw his or her agency interest or e-Quote from the Post 1 Panels
B-G Crowd.
In this filing, the Exchange proposes to amend the definition of
the Crowd in order to reflect more accurately the areas which most
efficiently facilitate the beneficial interaction among the members on
the Floor. The Exchange believes that the best way to facilitate this
interaction is to re-define the concept of Crowd from strictly
contiguous panels to encompass an area that enables members to more
efficiently conduct business. Essentially, this is the area in which
members can see and hear the business conducted at a group of panels.
These panels may be at one or more posts. To accomplish this, the
Exchange proposes to divide each trading room of the Floor into
specific areas, which will be identified on the Floor in a recognizable
way. Each area will serve to delineate the boundaries of the Crowd. The
Crowds will be created in such a way that when a Floor broker is
standing in a Crowd, the Floor broker generally will be able to see and
hear the business conducted at each post/panel within that Crowd.
Similarly, the specialists in panels included in a Crowd will be able
to see and hear the Floor brokers who are representing agency interests
or e-Quotes in that Crowd. In addition to physically identifying each
Crowd on the Floor in a unique manner, the Exchange will disseminate to
its members a notice identifying the specific post(s) and panels
comprising each Crowd.
As is the case today, once in a Crowd, a Floor broker is able to e-
Quote in all securities located in that Crowd. If the Floor broker
leaves one Crowd in order to work in another, the Floor broker is
required to withdraw his or her agency interest from the Crowd he or
she is leaving. However, a Floor broker may obtain ``market looks'' in
a securities located in other Crowds without canceling his or her e-
Quotes. In this filing, the Exchange further seeks to amend Rule
70.20(f) to reflect this concept.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act in general,\7\ and furthers the objectives
of Section 6(b)(5) of the Act in particular,\8\ in that it is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, and to remove impediments to and perfect the mechanism of a
free and open market and a national market system.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
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 proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.\11\
However, Rule 19b-4(f)(6)(iii) \12\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange provided the Commission
with written notice of its intent to file this proposed rule change at
least five business days prior to the date of filing of the proposed
rule change. In addition, the Exchange has requested that the
Commission waive the 30-day operative delay to allow the Exchange to
implement the proposed rule change and avoid any undue confusion. The
Exchange believes that the proposed rule change merely seeks to reflect
more accurately the areas which most efficiently facilitate the
beneficial interaction among the trading professionals on the Floor of
the Exchange. The Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest because it would allow the Exchange to immediately implement
the revised definition of Crowd without undue delay and clarify in
Exchange Rule 70.20(f) a Floor broker's ability to obtain ``market
look'' information while in a Crowd. For this reason, the Commission
designates the proposal to be effective and operative upon filing with
the Commission.\13\
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\11\ Id.
\12\ 17 CFR 240.19b-4(f)(6)(iii).
\13\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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[[Page 54864]]
At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such proposed 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.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSE-2006-58 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-2006-58. 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 such
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-2006-58 and should be submitted on or before
October 10, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-15499 Filed 9-18-06; 8:45 am]
BILLING CODE 8010-01-P
