Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Rule 122 (Orders With More Than One Broker) Until the Availability of Full d-Quote Functionality in a Particular Security or February 5, 2007, Whichever Comes First, 64594-64596 [E6-18450]

Download as PDF 64594 Federal Register / Vol. 71, No. 212 / Thursday, November 2, 2006 / Notices C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change establishes or changes a member due, fee, or other charge imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the Act 35 and Rule 19b–4(f)(2) 36 thereunder. At any time within 60 days of the filing of such 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.37 IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–CHX–2006–29 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–CHX–2006–29. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the mstockstill on PROD1PC61 with NOTICES 35 15 U.S.C. 78s(b)(3)(A). CFR 19b–4(f)(2). 37 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, the Commission considers the period to commence on October 20, 2006, the date on which the CHX filed Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C). 36 17 VerDate Aug<31>2005 14:49 Nov 01, 2006 Jkt 211001 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 CHX. 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–CHX–2006–29 and should be submitted on or before November 24, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.38 Jill M. Peterson, Assistant Secretary. [FR Doc. E6–18481 Filed 11–1–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54653; File No. SR–NYSE– 2006–94] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Rule 122 (Orders With More Than One Broker) Until the Availability of Full d-Quote Functionality in a Particular Security or February 5, 2007, Whichever Comes First October 26, 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 25, 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. NYSE filed the proposed rule change pursuant to Section 19(b)(3) of the Act 3 and Rule 38 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 00086 Fmt 4703 Sfmt 4703 19b–4(f)(6) thereunder,4 which renders the proposed rule change 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 NYSE seeks to amend Exchange Rule 122 (Orders with More than One Broker) for a period of time commencing from the operative date of this proposed rule change until the availability of full d-Quoting 5 functionality in a particular security or February 5, 2007, whichever comes first. The proposed rule change would permit Floor brokers to maintain discretionary e-Quotes (‘‘d-Quotes’’) and CAP–DI orders 6 in a security on the same side of the market for the same order that are capable of trading at the same price. The text of the proposed rule change is available on the Exchange’s Web site (http:// www.nyse.com), at the Exchange’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 proposes to permit Floor brokers to enter discretionary e-Quotes and CAP–DI orders in a security on the same side of the market for the same order that are capable of trading at the same price for a limited 4 17 CFR 240.19b–4(f)(6). Securities Exchange Act Release No. 54577 (October 5, 2006), 71 FR 60208 (October 12, 2006). 6 See Exchange Rules 13 and 123A.30(a). Exchange Rule 123A.30(a) describes a CAP–DI order as: ‘‘The elected or converted portion of a ‘percentage order that is convertible on a destabilizing tick and designated immediate execution or cancel election’ (‘‘CAP–DI order’’) may be automatically executed and may participate in a sweep.’’ 5 See E:\FR\FM\02NON1.SGM 02NON1 mstockstill on PROD1PC61 with NOTICES Federal Register / Vol. 71, No. 212 / Thursday, November 2, 2006 / Notices period of time—that is, from the operative date of this proposed rule change until the availability of full dQuoting functionality in a particular security or February 5, 2007, whichever comes first. The Exchange believes that discretionary e-Quote capabilities will be fully implemented in Phase IV of the Hybrid Market,7 which is scheduled to commence rolling out in late December 2006. This amendment will allow Floor brokers to participate electronically in certain trades they would otherwise miss while full d-Quoting functionality is being implemented. As such, the amendment enhances the competitive position between Floor brokers (on behalf of customer orders) and specialist proprietary trading that d-Quoting was designed to assist. Currently, d-Quote functionality permits Floor brokers to assign discretionary price instructions to their e-Quotes. Pursuant to these instructions, a d-Quote may trade with marketable and non-marketable incoming orders, by trading with such orders at a price better than the Exchange best bid or offer. Currently, the functionality to interact with a non-marketable incoming order (i.e., an order that would become the new Exchange best bid or offer) has not been implemented. However, specialists are able to interact with non-marketable incoming orders via their algorithmic systems subject to certain requirements. Specifically, a specialist can send electronically a ‘‘hit bid’’ or ‘‘take offer’’ message based on an incoming order that would create a new best bid or best offer. This allows the specialist to trade electronically with the newly published bid or offer. Until d-Quoting is fully implemented, a Floor broker only has the ability to interact manually with such new bid or offer. Accordingly, the speed disparity between a manual action and an electronic one places the Floor broker at a competitive disadvantage. A Floor broker can seek to trade at the bid or offer price by manually ‘‘hitting the bid’’ or ‘‘taking the offer.’’ They can also send a CAP–DI order to the specialist for conversion or election at that price. Marketable CAP–DI orders are automatically converted and trade along with specialist proprietary executions. Accordingly, by allowing Floor brokers to have CAP–DI orders and d-Quotes, the Floor brokers retain the ability to compete with specialist algorithmic trading for executions involving marketable incoming orders 7 The Commission approved the Hybrid Market on March 22, 2006. See Securities Exchange Act Release No. 53539 (March 22, 2006), 71 FR 16353 (March 31, 2006). VerDate Aug<31>2005 14:49 Nov 01, 2006 Jkt 211001 via discretionary pricing instructions, but do not miss participating in executions when specialists algorithmically hit a bid or take an offer. Exchange Rule 122 currently prevents Floor brokers who have transmitted part of an order to a specialist for execution (such as a CAP–DI order) from bidding or offering on behalf of the retained portion of such order at a price at which the transmitted part may be quoted or executed. Because a CAP–DI may execute at the same price as a d-Quote, the Exchange seeks to amend Rule 122 to permit Floor brokers to maintain both d-Quotes and CAP–DI orders in the same security for the account of the same principal that are capable of being executed at the same price. This filing applies to those securities subject to the Pilot 8 currently operating in conjunction with the implementation of Hybrid Market Phase III. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act 9 in general, and furthers the objectives of Section 6(b)(5) of the Act 10 in particular, in that it is designed 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. The Exchange believes that the proposed rule change is also designed to support the principles of Section 11A(a)(1) of the Act 11 in that it seeks to assure economically efficient execution of securities transactions, the practicability of brokers executing investors’ orders in the best market, and an opportunity for investors’ orders to be executed without the participation of a dealer. 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. 8 See Securities Exchange Act Release Nos. 54578 (October 5, 2006), 71 FR 60216 (October 12, 2006) and 54610 (October 16, 2006), 71 FR 62142 (October 23, 2006). 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). 11 15 U.S.C. 78k–1(a)(1). PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 64595 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) by its terms, 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 12 and Rule 19b–4(f)(6) thereunder.13 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. 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 designate the proposed rule change immediately operative upon filing. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Specifically, the Commission believes that the proposal should enable floor brokers to compete with specialists in certain trades on behalf of their customers, while the Exchange is in the process of implementing the d-Quote function. Accordingly, the Commission designates the proposal to be effective and operative upon filing with the Commission until the availability of full d-Quote functionality in a particular security or February 5, 2007, whichever comes first.15 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, 12 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 14 17 CFR 240.19b–4(f)(6)(iii). 15 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 13 17 E:\FR\FM\02NON1.SGM 02NON1 64596 Federal Register / Vol. 71, No. 212 / Thursday, November 2, 2006 / Notices 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 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.16 Nancy M. Morris, Secretary. [FR Doc. E6–18450 Filed 11–1–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54655; File No. SR– NYSEArca–2006–48] • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NYSE–2006–94 on the subject line. Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving Proposed Rule Change To Amend NYSE Arca Equities, Inc.’s Clearly Erroneous Executions Rule To Include an Appeal Fee for the NYSE Arca Marketplace (f/ k/a the Archipelago Exchange) Paper Comments October 26, 2006. mstockstill on PROD1PC61 with NOTICES • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. On August 11, 2006, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change pursuant to Section 19(b)(1) of the Securities All submissions should refer to File Exchange Act of 1934 (‘‘Act’’) 1 and Rule Number SR–NYSE–2006–94. This file 19b–4 thereunder,2 to assess a fee number should be included on the associated with the appeals process of subject line if e-mail is used. To help the NYSE Arca Equities, Inc. (‘‘NYSE Arca Commission process and review your Equities’’) Rule 7.10. The proposed rule comments more efficiently, please use change was published for comment in only one method. The Commission will the Federal Register on September 22, post all comments on the Commission’s 2006.3 The Commission received no comments on the proposal. This order Internet Web site (http://www.sec.gov/ approves the proposed rule change. rules/sro.shtml). Copies of the NYSE Arca proposes to amend NYSE submission, all subsequent Arca Equities Rule 7.10 governing amendments, all written statements clearly erroneous executions (‘‘CEEs’’) with respect to the proposed rule on the NYSE Arca Marketplace (f/k/a change that are filed with the the Archipelago Exchange), the equities Commission, and all written trading facility of NYSE Arca Equities. communications relating to the Specifically, under the proposed rule proposed rule change between the change, if an Equity Trading Permit Commission and any person, other than (‘‘ETP’’) Holder appeals a CEE decision those that may be withheld from the made by an NYSE Arca Equities officer public in accordance with the to the CEE Panel and the CEE Panel provisions of 5 U.S.C. 552, will be subsequently upholds the decision, the available for inspection and copying in ETP Holder would be assessed a the Commission’s Public Reference $500.00 fee. The Exchange believes that Room. Copies of such filing also will be assessing a $500.00 fee against any ETP available for inspection and copying at Holder who appeals a CEE decision that the principal office of the Exchange. All is subsequently upheld by the CEE comments received will be posted Panel would discourage frivolous and without change; the Commission does abusive uses of the CEE appeal process. not edit personal identifying The Exchange noted that some ETP information from submissions. You Holders have taken advantage of the should submit only information that appeals process by appealing all you wish to make available publicly. All decisions in which they are involved, submissions should refer to File 16 17 CFR 200.30–3(a)(12). Number SR–NYSE–2006–94 and should 1 15 U.S.C. 78s(b)(1). be submitted on or before November 24, 2 17 CFR 240.19b–4. 2006. 3 See Securities Exchange Act Release No. 54466 (September 18, 2006), 71 FR 55537. VerDate Aug<31>2005 14:49 Nov 01, 2006 Jkt 211001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 including decisions that involve a de minimis value. After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.4 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(4) of the Act,5 which requires that the rules of an exchange provide for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities, and with Section 6(b)(5) of the Act,6 which requires that the rules of an exchange be designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national securities system, and, in general, protect investors and the public interest. The Commission believes that the proposed fee is reasonable as a method to discourage frivolous uses by ETP Holders of the Exchange’s CEE appeal process. In addition, the Commission believes that the proposal would not unduly affect the rights of an ETP Holder to appeal to the CEE Panel the decisions of NYSE Arca Equities officers with respect to transactions that are alleged to involve a clearly erroneous execution. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,7 that the proposed rule change (SR–NYSEArca– 2006–48) is approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.8 Nancy M. Morris, Secretary. [FR Doc. E6–18449 Filed 11–1–06; 8:45 am] BILLING CODE 8011–01–P 4 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 5 15 U.S.C. 78f(b)(4). 6 15 U.S.C. 78f(b)(5). 7 15 U.S.C. 78s(b)(2). 8 17 CFR 200.30–3(a)(12). E:\FR\FM\02NON1.SGM 02NON1

Agencies

[Federal Register Volume 71, Number 212 (Thursday, November 2, 2006)]
[Notices]
[Pages 64594-64596]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-18450]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54653; File No. SR-NYSE-2006-94]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Rule 122 (Orders With More Than One Broker) Until the 
Availability of Full d-Quote Functionality in a Particular Security or 
February 5, 2007, Whichever Comes First

 October 26, 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 25, 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. NYSE filed 
the proposed rule change pursuant to Section 19(b)(3) of the Act \3\ 
and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposed rule 
change 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

    NYSE seeks to amend Exchange Rule 122 (Orders with More than One 
Broker) for a period of time commencing from the operative date of this 
proposed rule change until the availability of full d-Quoting \5\ 
functionality in a particular security or February 5, 2007, whichever 
comes first. The proposed rule change would permit Floor brokers to 
maintain discretionary e-Quotes (``d-Quotes'') and CAP-DI orders \6\ in 
a security on the same side of the market for the same order that are 
capable of trading at the same price. The text of the proposed rule 
change is available on the Exchange's Web site (http://www.nyse.com), 
at the Exchange's Office of the Secretary, and at the Commission's 
Public Reference Room.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 54577 (October 5, 
2006), 71 FR 60208 (October 12, 2006).
    \6\ See Exchange Rules 13 and 123A.30(a). Exchange Rule 
123A.30(a) describes a CAP-DI order as: ``The elected or converted 
portion of a `percentage order that is convertible on a 
destabilizing tick and designated immediate execution or cancel 
election' (``CAP-DI order'') may be automatically executed and may 
participate in a sweep.''
---------------------------------------------------------------------------

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 proposes to permit Floor brokers to enter 
discretionary e-Quotes and CAP-DI orders in a security on the same side 
of the market for the same order that are capable of trading at the 
same price for a limited

[[Page 64595]]

period of time--that is, from the operative date of this proposed rule 
change until the availability of full d-Quoting functionality in a 
particular security or February 5, 2007, whichever comes first. The 
Exchange believes that discretionary e-Quote capabilities will be fully 
implemented in Phase IV of the Hybrid Market,\7\ which is scheduled to 
commence rolling out in late December 2006. This amendment will allow 
Floor brokers to participate electronically in certain trades they 
would otherwise miss while full d-Quoting functionality is being 
implemented. As such, the amendment enhances the competitive position 
between Floor brokers (on behalf of customer orders) and specialist 
proprietary trading that d-Quoting was designed to assist.
---------------------------------------------------------------------------

    \7\ The Commission approved the Hybrid Market on March 22, 2006. 
See Securities Exchange Act Release No. 53539 (March 22, 2006), 71 
FR 16353 (March 31, 2006).
---------------------------------------------------------------------------

    Currently, d-Quote functionality permits Floor brokers to assign 
discretionary price instructions to their e-Quotes. Pursuant to these 
instructions, a d-Quote may trade with marketable and non-marketable 
incoming orders, by trading with such orders at a price better than the 
Exchange best bid or offer. Currently, the functionality to interact 
with a non-marketable incoming order (i.e., an order that would become 
the new Exchange best bid or offer) has not been implemented. However, 
specialists are able to interact with non-marketable incoming orders 
via their algorithmic systems subject to certain requirements. 
Specifically, a specialist can send electronically a ``hit bid'' or 
``take offer'' message based on an incoming order that would create a 
new best bid or best offer. This allows the specialist to trade 
electronically with the newly published bid or offer. Until d-Quoting 
is fully implemented, a Floor broker only has the ability to interact 
manually with such new bid or offer. Accordingly, the speed disparity 
between a manual action and an electronic one places the Floor broker 
at a competitive disadvantage.
    A Floor broker can seek to trade at the bid or offer price by 
manually ``hitting the bid'' or ``taking the offer.'' They can also 
send a CAP-DI order to the specialist for conversion or election at 
that price. Marketable CAP-DI orders are automatically converted and 
trade along with specialist proprietary executions. Accordingly, by 
allowing Floor brokers to have CAP-DI orders and d-Quotes, the Floor 
brokers retain the ability to compete with specialist algorithmic 
trading for executions involving marketable incoming orders via 
discretionary pricing instructions, but do not miss participating in 
executions when specialists algorithmically hit a bid or take an offer.
    Exchange Rule 122 currently prevents Floor brokers who have 
transmitted part of an order to a specialist for execution (such as a 
CAP-DI order) from bidding or offering on behalf of the retained 
portion of such order at a price at which the transmitted part may be 
quoted or executed. Because a CAP-DI may execute at the same price as a 
d-Quote, the Exchange seeks to amend Rule 122 to permit Floor brokers 
to maintain both d-Quotes and CAP-DI orders in the same security for 
the account of the same principal that are capable of being executed at 
the same price.
    This filing applies to those securities subject to the Pilot \8\ 
currently operating in conjunction with the implementation of Hybrid 
Market Phase III.
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release Nos. 54578 (October 5, 
2006), 71 FR 60216 (October 12, 2006) and 54610 (October 16, 2006), 
71 FR 62142 (October 23, 2006).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \9\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act \10\ in particular, in that it 
is designed 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. The Exchange believes that the 
proposed rule change is also designed to support the principles of 
Section 11A(a)(1) of the Act \11\ in that it seeks to assure 
economically efficient execution of securities transactions, the 
practicability of brokers executing investors' orders in the best 
market, and an opportunity for investors' orders to be executed without 
the participation of a dealer.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ 15 U.S.C. 78k-1(a)(1).
---------------------------------------------------------------------------

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) 
by its terms, 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 \12\ 
and Rule 19b-4(f)(6) thereunder.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    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. 
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 designate the proposed 
rule change immediately operative upon filing. The Commission believes 
that waiver of the 30-day operative delay is consistent with the 
protection of investors and the public interest. Specifically, the 
Commission believes that the proposal should enable floor brokers to 
compete with specialists in certain trades on behalf of their 
customers, while the Exchange is in the process of implementing the d-
Quote function. Accordingly, the Commission designates the proposal to 
be effective and operative upon filing with the Commission until the 
availability of full d-Quote functionality in a particular security or 
February 5, 2007, whichever comes first.\15\
---------------------------------------------------------------------------

    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such 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,

[[Page 64596]]

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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2006-94 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-2006-94. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room. Copies of such 
filing also will be available for inspection and copying at the 
principal office of the Exchange. 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-2006-94 and should be submitted on or before 
November 24, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
Nancy M. Morris,
Secretary.
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

[FR Doc. E6-18450 Filed 11-1-06; 8:45 am]
BILLING CODE 8011-01-P