Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Rule 17, 60206-60208 [E6-16847]
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60206
Federal Register / Vol. 71, No. 197 / Thursday, October 12, 2006 / Notices
delayed operative delay.13 The
Commission is exercising its authority
to waive the five-day pre-filing notice
requirement and believes that the
waiver of the 30-day operative delay is
consistent with the protection of
investors and the public interest. Waiver
of the five-day pre-filing and 30-day
operative periods will allow NYSE to
adopt its uniform locking and crossing
rule for NMS stocks similar to those
adopted by other self-regulatory
organizations and approved by the
Commission.14 Accordingly, the
Commission designates the proposal to
be effective and operative upon filing
with the Commission.15
At any time within sixty (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.16
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:
• 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–2006–63 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–2006–63. 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
rwilkins on PROD1PC63 with NOTICES
13 17
CFR 240.19b–4(f)(6)(iii).
14 See Securities Exchange Act Release No. 54391
(August 31, 2006), 71 FR 52836 (September 7, 2006)
(File No. SR–NSX–2006–08).
15 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. 15 U.S.C. 78c(f).
16 See Section 19(b)(3)(C) of the Act, 15 U.S.C.
78s(b)(3)(C).
16:21 Oct 11, 2006
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.17
Nancy M. Morris,
Secretary.
[FR Doc. E6–16846 Filed 10–11–06; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
VerDate Aug<31>2005
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Section, 100 F Street, NE., Washington,
DC 20549. 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–2006–63 and should
be submitted on or before November 2,
2006.
Jkt 211001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54560; File No. SR–NYSE–
2006–74]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Rule 17
October 2, 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 28, 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
proposal pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(6)
17 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).
1 15
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
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 is proposing to add
Rule 17T (‘‘Exchange Designated Default
Sponsoring Member’’) in order to
establish an Exchange designated
default sponsoring member broker/
dealer for use when routing orders to
the best bids and offers on other market
centers in accordance with Exchange
rules and SEC Regulation NMS.
The text of the proposed rule change
is available on the NYSE’s Web site
(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
NYSE has prepared summaries, set forth
in Sections A, B, and C below, of the
most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Since 1978, the Exchange has routed
orders (as commitments to trade) to
other market centers and received them
through the Intermarket Trading System
(‘‘ITS’’).5 Current anticipated changes to
ITS, in addition to the adoption of
Regulation National Market System
(‘‘Regulation NMS’’) 6 to modernize and
strengthen the regulatory structure of
the National Market System, result in
the Exchange’s need to establish a
4 17
CFR 240.19b–4(f)(6).
facilitates trades between members located
in different markets. Through ITS, a member in any
participating market may send orders, as
commitments to trade, at the bid or offer on any
other participating market. The ITS Plan is
administered by the participating markets, and is
filed with and approved by the Securities and
Exchange Commission in accordance with Section
11A of the Securities Exchange Act of 1934.
6 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496 (June 29, 2005).
5 ITS
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Federal Register / Vol. 71, No. 197 / Thursday, October 12, 2006 / Notices
rwilkins on PROD1PC63 with NOTICES
designated default sponsoring member
broker/dealer in the destination market
(hereinafter ‘‘default Sponsoring
Member’’) in order to ensure that
customer orders sent to the Exchange for
execution are able to access better prices
on other markets.
On July 17, 2006, the American Stock
Exchange LLC, the Boston Stock
Exchange, Inc., the Chicago Board
Options Exchange, Inc., the Chicago
Stock Exchange, Inc., the Nasdaq Stock
Market LLC, the National Stock
Exchange, the New York Stock
Exchange LLC, and the NYSE Arca, Inc.,
executed and filed with the Commission
a ‘‘Plan for the Purpose of Creating and
Operating an Intermarket
Communications Linkage Pursuant to
Section 11A(a)(3)(B) of the Securities
Exchange Act of 1934’’ (‘‘Linkage
Plan’’).7 Pursuant to the Linkage Plan
the Securities Industry Automation
Corporation (‘‘SIAC’’) will serve as the
facilities manager for the data
processing hardware, software and
communications network (the
‘‘System’’) that links electronically the
market participants. SIAC will further
be responsible for the operation and
maintenance of the System. The current
ITS hardware will remain in use until
June 30, 2007.
Under the Linkage Plan, member
access is provided to each market
participant through the clearing member
on the order or through the mechanism
of a default Sponsoring Member. Upon
the effective date of the Linkage Plan
(October 1, 2006), through the end of
June 2007, the Exchange intends to
provide member access to the other
market center participants in the
Linkage Plan by utilizing the identifier
of the default Sponsoring Member.
Specifically, the System will
automatically substitute the identifier of
all member organizations’ orders that
are routed to other market centers with
the identifier of the default Sponsoring
Member prior to the routing of the
orders to the appropriate destination
market.
The Linkage Plan allows participants
to charge for orders executed in their
market through the Linkage Plan. The
destination market may bill the default
Sponsoring Member for executions in
that market, pursuant to such market’s
transaction fee schedule, based on the
monthly reports provided by SIAC. As
a result, the Exchange anticipates
charging a fee for the services of the
7 The Commission approved the NMS Linkage
Plan on September 29, 2006. See Securities
Exchange Act Release No. 54551 (Sept. 29, 2006).
It should be noted that the Philadelphia Stock
Exchange, Inc. (‘‘Phlx’’) executed the Linkage Plan
on August 1, 2006.
VerDate Aug<31>2005
16:21 Oct 11, 2006
Jkt 211001
default Sponsoring Member. Charges
related to the services of the default
Sponsoring Member will be the subject
of a separate fee filing.
In addition, pursuant to the proposed
rule change, neither the Exchange nor
the default Sponsoring Member shall be
liable for any damages sustained by an
allied member or member organization
as a result of the services provided by
the default Sponsoring Member, except
as stated in Exchange Rules.
The interim establishment of the
default Sponsoring Member serves only
to provide member access to other
destination market(s) for execution of
orders at more favorable prices.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act 8 in general and
furthers the objectives of Section
6(b)(5) 9 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, 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.
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
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
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, if consistent with the
protection of investors and the public
interest, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act 10 and Rule 19b–4(f)(6)
U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
10 15 U.S.C. 78s(b)(3)(A).
Frm 00101
Fmt 4703
thereunder.11 As required under Rule
19b–4(f)(6)(iii) under the Act,12 the
Exchange provided the Commission
with written notice of its intent to file
the proposed rule change, along with a
brief description and text of the
proposed rule change, at least five
business days prior to the date of the
filing of the proposed rule change.
A proposed rule change filed under
19b–4(f)(6) normally may not become
operative prior to 30 days after the date
of filing.13 However, Rule 19b–
4(f)(6)(iii) 14 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day operative
delay and render the proposed rule
change to become operative
immediately. The Commission believes
that waiving the 30-day operative delay
is consistent with the protection of
investors and the public interest. The
Linkage Plan is expected to become
operative on October 2, 2006, and
waiving the 30-day operative period
would enable the Exchange to
implement the default Sponsoring
Member mechanism at the start of the
Linkage Plan’s operation. For the
reasons stated above, the Commission
therefore designates the proposal to
become operative upon filing with the
Commission.15
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.
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 rulecomments@sec.gov. Please include File
11 17
12 17
CFR 240.19b–4(f)(6).
CFR 240.19b–4(f)(6)(iii).
13 Id.
14 Id.
15 For purposes of waiving the operative date of
this proposal only, the Commission has considered
the impact of the proposed rule on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
8 15
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60208
Federal Register / Vol. 71, No. 197 / Thursday, October 12, 2006 / Notices
Number SR–NYSE–2006–74 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
[Release No. 34–54577; File No. SR–NYSE–
2006–36]
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
Self-Regulatory Organizations; New
York Stock Exchange LLC; Order
Approving Proposed Rule Change and
Amendment Nos. 1 and 2 Thereto To
Provide Floor Brokers With the Ability
All submissions should refer to File
To Enter Discretionary Instructions
Number SR–NYSE–2006–74. This file
and/or Pegging Instructions With
number should be included on the
Respect to Floor Broker Agency
subject line if e-mail is used. To help the Interest Files (e-Quotes)
Commission process and review your
October 5, 2006.
comments more efficiently, please use
only one method. The Commission will I. Introduction
post all comments on the Commission’s
On May 16, 2006, the New York Stock
Internet Web site (https://www.sec.gov/
Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’)
rules/sro.shtml). Copies of the
filed with the Securities and Exchange
submission, all subsequent
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
amendments, all written statements
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
with respect to the proposed rule
19b–4 thereunder,2 a proposed rule
change that are filed with the
change to provide floor brokers with the
Commission, and all written
ability to enter discretionary and
communications relating to the
pegging instructions with respect to
proposed rule change between the
Commission and any person, other than their floor broker agency interest files.
On June 14, 2006 and July 11, 2006,
those that may be withheld from the
NYSE filed Amendment Nos. 1 3 and 2 4
public in accordance with the
to the proposed rule change,
provisions of 5 U.S.C. 552, will be
respectively. The proposed rule change,
available for inspection and copying in
as amended, was published for
the Commission’s Public Reference
comment in the Federal Register on July
Room. Copies of such filing also will be 21, 2006.5 The Commission received six
available for inspection and copying at
comment letters from three
the principal office of the NYSE. All
commenters.6 On September 13, 2006,
comments received will be posted
the Exchange filed a response to the
without change; the Commission does
comment letters.7 This order approves
not edit personal identifying
the proposed rule change, as amended.
information from submissions. You
II. Background
should submit only information that
On March 22, 2006, the Commission
you wish to make available publicly. All
approved NYSE’s proposal to establish
submissions should refer to File
Number SR–NYSE–2006–74 and should a Hybrid Market, which will alter the
Exchange’s market structure from a
be submitted on or before November 2,
floor-based auction market with limited
2006.
automated order interaction to a more
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.16
Nancy M. Morris,
Secretary.
[FR Doc. E6–16847 Filed 10–11–06; 8:45 am]
rwilkins on PROD1PC63 with NOTICES
BILLING CODE 8011–01–P
16 17
CFR 200.30–3(a)(12).
VerDate Aug<31>2005
16:21 Oct 11, 2006
Jkt 211001
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 In Amendment No. 1, NYSE proposed
additional changes and clarifications to the
proposal.
4 Amendment No. 2 supersedes and replaces the
original rule change and Amendment No. 1 in their
entirety.
5 See Securities and Exchange Act Release No.
54150 (July 14, 2006), 71 FR 41496.
6 See Letters from George Rutherfurd, Consultant,
dated June 22, 2006 (‘‘Rutherfurd I’’), August 3,
2006 (‘‘Rutherfurd II’’) and September 21, 2006
(‘‘Rutherfurd Letter III’’); Warren Meyers, President,
Independent Brokers Action Committee, dated
August 11, 2006 (‘‘IBAC Letter’’); and Junius W.
Peake, Monfort Distinguished Emeritus Professor of
Finance, Kenneth W. Monfort College of Business,
dated August 18, 2006 (‘‘Peake Letter I’’) and
October 3, 2006 (‘‘Peake Letter II’’).
7 See Letter from Mary Yeager, Secretary, NYSE,
to Nancy Morris, Secretary, Commission, dated
September 13, 2006 (‘‘Response to Comments’’).
automated market with limited floorbased auction market availability.8 To
create its Hybrid Market, NYSE changed
its rules to permit its floor members to
participate in the market electronically.
For example, specialists will have the
ability to manually and systematically
place in a separate file (‘‘specialist
interest file’’) within the Display Book
system 9 their proprietary interest at
prices at or outside the Exchange best
bid or offer (‘‘BBO’’). In addition,
specialists will establish algorithms
(‘‘Specialist Algorithm’’) 10 to send
messages via an Exchange-owned
application program interface to quote
and trade for their proprietary
accounts.11
As approved in the Hybrid Market
Order, floor brokers will represent their
customers’ orders electronically in a
separate file in the Display Book system
(‘‘floor broker agency interest file’’) at
multiple prices at or outside the
Exchange BBO (‘‘e-Quotes’’). As
approved, e-Quotes can participate in
automatic executions at the Exchange
BBO or outside the Exchange BBO
during a sweep. E-Quotes may not,
however, initiate trades with incoming
orders at prices better than the Exchange
BBO. Accordingly, the Exchange now
proposes additional changes that it
believes will further replicate
electronically the manner in which floor
brokers represent their customers’
orders on the floor. Specifically, NYSE
proposes to provide floor brokers with
the ability to enter discretionary
instructions as to the size and/or price
at which their e-Quotes may trade (‘‘dQuotes’’).12 In addition, the Exchange
proposes to provide floor brokers with
the ability to set their e-Quotes and dQuotes to peg to the Exchange BBO so
that their e-Quotes or d-Quotes would
be available for execution at the BBO as
the Exchange BBO changes (‘‘pegging’’).
1 15
2 17
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Fmt 4703
Sfmt 4703
8 See Securities and Exchange Act Release No.
53539, 71 FR 16353 (March 31, 2006) (‘‘Hybrid
Market Order’’).
9 The Display Book system (‘‘Display Book
system’’) is an order management and execution
facility. The Display Book system receives and
displays orders to the specialists, contains the
customer limit order display book (‘‘Book’’), and
provides a mechanism to execute and report
transactions and publish the results to the
Consolidated Tape. In addition, the Display Book
system is connected to a variety of Exchange
systems for the purposes of comparison,
surveillance, and reporting information to
customers and other market data and national
market systems, i.e., the Intermarket Trading
System, the Consolidated Tape Association,
Consolidated Quotation System, etc.
10 See NYSE Rule 104(b).
11 See NYSE Rule 104(e).
12 NYSE also refers to d-Quotes as ‘‘discretionary
e-Quotes’’ in its proposed rule text.
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]]>Agencies
[Federal Register Volume 71, Number 197 (Thursday, October 12, 2006)]
[Notices]
[Pages 60206-60208]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-16847]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54560; File No. SR-NYSE-2006-74]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Rule 17
October 2, 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 28, 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 proposal 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 is proposing to add Rule 17T (``Exchange Designated
Default Sponsoring Member'') in order to establish an Exchange
designated default sponsoring member broker/dealer for use when routing
orders to the best bids and offers on other market centers in
accordance with Exchange rules and SEC Regulation NMS.
The text of the proposed rule change is available on the NYSE's Web
site (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 NYSE has prepared summaries, set forth in Sections
A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
Since 1978, the Exchange has routed orders (as commitments to
trade) to other market centers and received them through the
Intermarket Trading System (``ITS'').\5\ Current anticipated changes to
ITS, in addition to the adoption of Regulation National Market System
(``Regulation NMS'') \6\ to modernize and strengthen the regulatory
structure of the National Market System, result in the Exchange's need
to establish a
[[Page 60207]]
designated default sponsoring member broker/dealer in the destination
market (hereinafter ``default Sponsoring Member'') in order to ensure
that customer orders sent to the Exchange for execution are able to
access better prices on other markets.
---------------------------------------------------------------------------
\5\ ITS facilitates trades between members located in different
markets. Through ITS, a member in any participating market may send
orders, as commitments to trade, at the bid or offer on any other
participating market. The ITS Plan is administered by the
participating markets, and is filed with and approved by the
Securities and Exchange Commission in accordance with Section 11A of
the Securities Exchange Act of 1934.
\6\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496 (June 29, 2005).
---------------------------------------------------------------------------
On July 17, 2006, the American Stock Exchange LLC, the Boston Stock
Exchange, Inc., the Chicago Board Options Exchange, Inc., the Chicago
Stock Exchange, Inc., the Nasdaq Stock Market LLC, the National Stock
Exchange, the New York Stock Exchange LLC, and the NYSE Arca, Inc.,
executed and filed with the Commission a ``Plan for the Purpose of
Creating and Operating an Intermarket Communications Linkage Pursuant
to Section 11A(a)(3)(B) of the Securities Exchange Act of 1934''
(``Linkage Plan'').\7\ Pursuant to the Linkage Plan the Securities
Industry Automation Corporation (``SIAC'') will serve as the facilities
manager for the data processing hardware, software and communications
network (the ``System'') that links electronically the market
participants. SIAC will further be responsible for the operation and
maintenance of the System. The current ITS hardware will remain in use
until June 30, 2007.
---------------------------------------------------------------------------
\7\ The Commission approved the NMS Linkage Plan on September
29, 2006. See Securities Exchange Act Release No. 54551 (Sept. 29,
2006). It should be noted that the Philadelphia Stock Exchange, Inc.
(``Phlx'') executed the Linkage Plan on August 1, 2006.
---------------------------------------------------------------------------
Under the Linkage Plan, member access is provided to each market
participant through the clearing member on the order or through the
mechanism of a default Sponsoring Member. Upon the effective date of
the Linkage Plan (October 1, 2006), through the end of June 2007, the
Exchange intends to provide member access to the other market center
participants in the Linkage Plan by utilizing the identifier of the
default Sponsoring Member.
Specifically, the System will automatically substitute the
identifier of all member organizations' orders that are routed to other
market centers with the identifier of the default Sponsoring Member
prior to the routing of the orders to the appropriate destination
market.
The Linkage Plan allows participants to charge for orders executed
in their market through the Linkage Plan. The destination market may
bill the default Sponsoring Member for executions in that market,
pursuant to such market's transaction fee schedule, based on the
monthly reports provided by SIAC. As a result, the Exchange anticipates
charging a fee for the services of the default Sponsoring Member.
Charges related to the services of the default Sponsoring Member will
be the subject of a separate fee filing.
In addition, pursuant to the proposed rule change, neither the
Exchange nor the default Sponsoring Member shall be liable for any
damages sustained by an allied member or member organization as a
result of the services provided by the default Sponsoring Member,
except as stated in Exchange Rules.
The interim establishment of the default Sponsoring Member serves
only to provide member access to other destination market(s) for
execution of orders at more favorable prices.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \8\ in general and furthers the objectives
of Section 6(b)(5) \9\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, 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.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b).
\9\ 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
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
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, if
consistent with the protection of investors and the public interest, it
has become effective pursuant to Section 19(b)(3)(A) of the Act \10\
and Rule 19b-4(f)(6) thereunder.\11\ As required under Rule 19b-
4(f)(6)(iii) under the Act,\12\ the Exchange provided the Commission
with written notice of its intent to file the proposed rule change,
along with a brief description and text of the proposed rule change, at
least five business days prior to the date of the filing of the
proposed rule change.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
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A proposed rule change filed under 19b-4(f)(6) normally may not
become operative prior to 30 days after the date of filing.\13\
However, Rule 19b-4(f)(6)(iii) \14\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay and render the proposed
rule change to become operative immediately. The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. The Linkage Plan is
expected to become operative on October 2, 2006, and waiving the 30-day
operative period would enable the Exchange to implement the default
Sponsoring Member mechanism at the start of the Linkage Plan's
operation. For the reasons stated above, the Commission therefore
designates the proposal to become operative upon filing with the
Commission.\15\
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\13\ Id.
\14\ Id.
\15\ For purposes of waiving the operative date of this proposal
only, the Commission has considered the impact of the proposed rule
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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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.
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
[[Page 60208]]
Number SR-NYSE-2006-74 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-2006-74. 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-2006-74 and should be submitted on or before
November 2, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-16847 Filed 10-11-06; 8:45 am]
BILLING CODE 8011-01-P
