Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto Relating to Its Regulatory Oversight Committee, 63059-63060 [E6-17992]

Download as PDF Federal Register / Vol. 71, No. 208 / Friday, October 27, 2006 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54638; File No. SR– NYSEArca–2006–58] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto Relating to Its Regulatory Oversight Committee October 23, 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 21, 2006, NYSE Arca, Inc. (‘‘NYSE Arca’’ 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 NYSE Arca. The Exchange filed Amendment No. 1 to the proposed rule change on October 20, 2006.3 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 amend NYSE Arca Rule 3.3 to provide that the Exchange’s Regulatory Oversight Committee (the ‘‘ROC’’) shall be comprised of at least three Public Directors. The text of the proposed rule change is available on the Exchange’s Internet Web site (http:// www.nysearca.com), at the Exchange’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 jlentini on PROD1PC65 with NOTICES 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 III below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. 1 15 U.S.C. 78s(b)(l). CFR 240. 19b–4. 3 In Amendment No. 1, NYSE Arca revised the purpose section of the proposal to clarify the changes being proposed. 2 17 VerDate Aug<31>2005 16:53 Oct 26, 2006 Jkt 211001 63059 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others 1. Purpose The Exchange proposes to change NYSE Arca Rule 3.3 to provide that the ROC shall be comprised of at least three Public Directors.4 The current rule provides that the ROC must be comprised of all of the Public Directors of the NYSE Arca, Inc. The Exchange believes that setting the number of Public Directors on the ROC to three is appropriate given the recent merger of New York Stock Exchange, Inc. and Archipelago Holdings, Inc. pursuant to which the Exchange became an indirect wholly owned subsidiary of a newly formed entity, NYSE Group, Inc. (‘‘NYSE Group’’). It is the current intent of NYSE Arca to populate the NYSE Arca ROC with three NYSE Arca directors who are also directors of both the NYSE Group and NYSE Regulation, Inc.,5 a wholly owned subsidiary of NYSE Group that provides regulatory services to both the Exchange and the other registered securities exchange that is a subsidiary of NYSE Group, New York Stock Exchange LLC. The Exchange believes that this particular overlap of directors will allow the Exchange to better manage regulatory issues across the organization. Written comments on the proposed rule change were neither solicited nor received. 2. Statutory Basis The Exchange believes that the proposed rule change, as amended, is consistent with Section 6(b) 6 of the Exchange Act, in general, and furthers the objectives of Section 6(b)(5) 7 in particular in that it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanisms of a free and open market, 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. 4 Section 3.02 of the Bylaws of NYSE Arca defines ‘‘Public Directors’’ as person from the public who will not be, or be affiliated with, a broker-dealer in securities or employed by, or involved in any material business relationship with, the Exchange or its affiliates. 5 All of these persons meet the requirements of a Public Directors under the NYSE Arca rules. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 III. 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 rulecomments@sec.gov. Please include File No. SR–NYSEArca–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–NYSEArca–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 Commissions 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 the filing also will be available for inspection and copying at the principal office of NYSE Arca. 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–NYSEArca–2006–58 and E:\FR\FM\27OCN1.SGM 27OCN1 63060 Federal Register / Vol. 71, No. 208 / Friday, October 27, 2006 / Notices should be submitted on or before November 17, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.8 Nancy M. Morris, Secretary. [FR Doc. E6–17992 Filed 10–26–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54636; File No. SR– NYSEArca–2006–70] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of a Proposed Rule Change Relating to the Exchange’s Generic Listing Standards for Index-Linked Securities October 20, 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 October 2, 2006, NYSE Arca, Inc. (‘‘Exchange’’), through its wholly-owned subsidiary NYSE Arca Equities, Inc. (‘‘NYSE Arca Equities’’ or the ‘‘Corporation’’), filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. 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 amend NYSE Arca Equities Rule 5.2(j)(6) to extend the maximum duration of indexlinked securities (‘‘Index-Linked Securities’’) from ten (10) years to thirty (30) years. The text of the proposed rule change appears below. Proposed new language is in italics; proposed deletions are in [brackets]. * * * * * NYSE Arca Equities jlentini on PROD1PC65 with NOTICES Rule 5.2(j)(6). Index-Linked Securities Index-linked securities are securities that provide for the payment at maturity of a cash amount based on the performance of an underlying index or indexes. Such securities may or may not provide for the repayment of the original principal investment amount. 8 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Aug<31>2005 16:53 Oct 26, 2006 Jkt 211001 The Corporation may submit a rule filing pursuant to Section 19(b)(2) of the Securities Exchange Act of 1934 (‘‘Act’’) to permit the listing and trading of index-linked securities that do not otherwise meet the standards set forth below in paragraphs (a) through (k). The Corporation will consider for listing and trading pursuant to Rule 19b–4(e) under the Act, index-linked securities provided: * * * * * (b) The issue has a minimum term of one (1) year but no greater than [ten (10)] thirty (30) years. * * * * * 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 states that the purpose of the proposed rule change is to amend the Exchange’s rules to extend the maximum duration of Index-Linked Securities from ten (10) years to thirty (30) years. Pursuant to NYSE Arca Equities Rule 5.2(j)(6), the Exchange may approve for listing and trading securities that cannot be readily categorized under the listing criteria for common and preferred securities, bonds, debentures, or warrants. In August 2005, the Commission approved the Exchange’s proposal to add NYSE Arca Equities Rule 5.2(j) (which was a PCX rule at the time) to the NYSE Arca Equities rule for the purpose of adopting generic listing standards pursuant to Rule 19b–4(e) 3 in connection with Index-Linked Securities.4 3 17 CFR 240.19b–4(e). Securities Exchange Act Release No. 52204 (August 3, 2005), 70 FR 46559 (August 10, 2005) (SR–PCX–2005–63). Telephone Conference on October 20, 2006 between John Carey, Assistant General Counsel, Exchange, and Hong-anh Tran, Special Counsel, Division of Market Regulation (‘‘Division’’), Commission (Telephone Conference). 4 See PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 NYSE Arca Equities Rule 5.2(j)(6) sets forth criteria that the issue and the issuer must meet in order to list and trade Index-Linked Securities at the Exchange.5 Currently, one of the criteria the Exchange considers for the listing and trading of Index-Linked Securities, pursuant to NYSE Arca Equities Rule 5.2(j)(6), is that the term of the issue must be a minimum term of one (1) year but not greater than ten (10) years. The Exchange proposes to amend NYSE Arca Equities Rule 5.2(j)(6)(b) to extend the duration of the term of the issue from ten (10) years to thirty (30) years. The Exchange believes this amendment to NYSE Arca Equities Rule 5.2(j)(6)(b) is appropriate due to the increase demand from issuers to list and trade Index-Linked Securities that are greater than ten (10) years in duration. In addition, the Exchange notes that corporate bonds and other fixed-income products have historically been issued with terms of up to, or greater than, thirty (30) years. The Exchange believes expanding the duration for Index-Linked Securities, subject to generic listing standards in NYSE Arca Equities Rule 5.2(j)(6), will help to foster competition and promote enhanced efficiency in the marketplace. Incorporating these guidelines into the Exchange’s generic listing standards for Index-Linked Securities will allow Index-Linked Securities that satisfy the listing standards to begin trading pursuant to Rule 19b–4(e), without constituting a proposed rule change within the meaning of Section 19(b) of the Act and Rule 19b–4, for which notice and comment and Commission approval is necessary.6 The Exchange’s ability to rely on Rule 19b–4(e) to list such Index-Linked Securities potentially reduces the time frame for bringing these securities to the market, thereby promoting competition and making such products available to investors more quickly. The Exchange also notes that the Commission has approved amendments to the generic listing standards for equity-linked notes that removed the maximum term limits for those securities.7 5 NYSE Arca Equities Rule 5.2(j)(6) permits the Exchange to submit a rule filing pursuant to Section 19(b)(2) of the Act to allow the listing and trading of Index-Linked Securities that do not otherwise meet the generic listing criteria. 6 Telephone Conference on October 19, 2006 between John Carey, Assistant General Counsel, Exchange, and Hong-anh Tran, Special Counsel, Division, Commission. 7 Telephone Conference. See Securities Exchange Act Release Nos. 42110 (November 5, 1999), 64 FR 61677 (November 12, 1999) (SR–Amex–99–33); 41992 (October 7, 1999), 64 FR 56007 (October 15, 1999) (SR–NYSE–99–22); and 42313 (January 4, 2000), 65 FR 2205 (January 13, 2000) (SR–Chx–99– 19). E:\FR\FM\27OCN1.SGM 27OCN1

Agencies

[Federal Register Volume 71, Number 208 (Friday, October 27, 2006)]
[Notices]
[Pages 63059-63060]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-17992]



[[Page 63059]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54638; File No. SR-NYSEArca-2006-58]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of a Proposed Rule Change and Amendment No. 1 Thereto Relating to Its 
Regulatory Oversight Committee

October 23, 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 21, 2006, NYSE Arca, Inc. (``NYSE Arca'' 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 NYSE Arca. The Exchange filed Amendment No. 1 to 
the proposed rule change on October 20, 2006.\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)(l).
    \2\ 17 CFR 240. 19b-4.
    \3\ In Amendment No. 1, NYSE Arca revised the purpose section of 
the proposal to clarify the changes being proposed.
---------------------------------------------------------------------------

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

    The Exchange proposes to amend NYSE Arca Rule 3.3 to provide that 
the Exchange's Regulatory Oversight Committee (the ``ROC'') shall be 
comprised of at least three Public Directors. The text of the proposed 
rule change is available on the Exchange's Internet Web site (http://www.nysearca.com), at the Exchange'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 III 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to change NYSE Arca Rule 3.3 to provide that 
the ROC shall be comprised of at least three Public Directors.\4\ The 
current rule provides that the ROC must be comprised of all of the 
Public Directors of the NYSE Arca, Inc.
---------------------------------------------------------------------------

    \4\ Section 3.02 of the Bylaws of NYSE Arca defines ``Public 
Directors'' as person from the public who will not be, or be 
affiliated with, a broker-dealer in securities or employed by, or 
involved in any material business relationship with, the Exchange or 
its affiliates.
---------------------------------------------------------------------------

    The Exchange believes that setting the number of Public Directors 
on the ROC to three is appropriate given the recent merger of New York 
Stock Exchange, Inc. and Archipelago Holdings, Inc. pursuant to which 
the Exchange became an indirect wholly owned subsidiary of a newly 
formed entity, NYSE Group, Inc. (``NYSE Group''). It is the current 
intent of NYSE Arca to populate the NYSE Arca ROC with three NYSE Arca 
directors who are also directors of both the NYSE Group and NYSE 
Regulation, Inc.,\5\ a wholly owned subsidiary of NYSE Group that 
provides regulatory services to both the Exchange and the other 
registered securities exchange that is a subsidiary of NYSE Group, New 
York Stock Exchange LLC. The Exchange believes that this particular 
overlap of directors will allow the Exchange to better manage 
regulatory issues across the organization.
---------------------------------------------------------------------------

    \5\ All of these persons meet the requirements of a Public 
Directors under the NYSE Arca rules.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is 
consistent with Section 6(b) \6\ of the Exchange Act, in general, and 
furthers the objectives of Section 6(b)(5) \7\ in particular in that it 
is designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanisms of a free and open market, and, in general, to 
protect investors and the public interest.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

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

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

    Written comments on the proposed rule change were neither solicited 
nor received.

III. 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 No. SR-NYSEArca-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-NYSEArca-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 Commissions 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 the 
filing also will be available for inspection and copying at the 
principal office of NYSE Arca. 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-NYSEArca-2006-58 and

[[Page 63060]]

should be submitted on or before November 17, 2006. 

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
 [FR Doc. E6-17992 Filed 10-26-06; 8:45 am]
BILLING CODE 8011-01-P