Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Exchange Fees and Charges, 67414-67415 [E6-19621]

Download as PDF 67414 Federal Register / Vol. 71, No. 224 / Tuesday, November 21, 2006 / Notices facilities and regulation of the Nasdaq marketplace, which have been enhanced since the last fee increase. In addition, Nasdaq notes that the services being provided are designed to supplement those a company already uses in achieving its investor relations, disclosure and other corporate objectives. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which NASD consents, the Commission will: (A) By order approve such proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: sroberts on PROD1PC70 with NOTICES 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–NASDAQ–2006–040 on the subject line. 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 Nasdaq. 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–NASDAQ–2006–040 and should be submitted on or before December 12, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.19 Nancy M. Morris, Secretary. [FR Doc. E6–19620 Filed 11–20–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54750; File No. SR– NYSEArca-2006–88] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Exchange Fees and Charges November 14, 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 November 13, 2006, NYSE Acra, Inc. (‘‘NYSE Paper Comments Arca’’ or ‘‘Exchange’’) filed with the • Send paper comments in triplicate Securities and Exchange Commission to Nancy M. Morris, Secretary, (‘‘Commission’’) the proposed rule Securities and Exchange Commission, change as described in Items I, II, and Station Place, 100 F Street, NE., III below, which Items have been Washington, DC 20549–1090. prepared by the Exchange. NYSE Arca All submissions should refer to File has designated this proposal as one Number SR–NASDAQ–2006–040. This establishing or changing a due, fee, or file number should be included on the other charge imposed by a selfsubject line if e-mail is used. To help the regulatory organization pursuant to Commission process and review your Section 19(b)(3)(A) of the Act 3 and Rule comments more efficiently, please use 19b–4(f)(2) thereunder,4 which renders only one method. The Commission will the proposal effective upon filing with post all comments on the Commission’s the Commission. The Commission is Internet Web site (http://www.sec.gov/ publishing this notice to solicit rules/sro.shtml). Copies of the comments on the proposed rule change submission, all subsequent from interested persons. amendments, all written statements with respect to the proposed rule 19 17 CFR 200.30–3(a)(12). change that are filed with the 1 15 U.S.C. 78s(b)(1). Commission, and all written 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). communications relating to the 4 17 CFR 240.19b–4(f)(2). proposed rule change between the VerDate Aug<31>2005 14:17 Nov 20, 2006 Jkt 211001 PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its Schedule of Fees and Charges in order to modify the fee that applies to Option Strategy Executions.5 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 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 represents that the purpose of this proposed rule change is to modify the fee that applies to ‘‘Option Strategy Executions.’’ These transactions include reversals and conversions,6 dividend spreads,7 box spreads,8 and merger spreads.9 Because the referenced Options Strategy Executions are generally executed by 5 Fees on Options Strategy Executions are applicable through a Pilot Program until March 1, 2007. 6 Reversals and conversions are transactions that employ calls, puts, and the underlying stock to lock in a nearly risk free profit. Reversals are established by combining a short stock position with a short put and a long call position that shares the same strike and expiration. Conversions employ long positions in the underlying stock that accompany long puts and short calls sharing the same strike and expiration. 7 Dividend spreads are trades involving deep-inthe-money options that exploit pricing differences arising around the time a stock goes ex-dividend. 8 Box Spreads is a strategy that synthesizes long and short stock positions to create a profit. Specifically, a long call and short put at one strike is combined with a short call and long put at a different strike to create synthetic long and synthetic short stock positions, respectively. 9 A merger spread is a transaction executed pursuant to a strategy involving the simultaneous purchase and sale of options of the same class and expiration date, but with different strike prices followed by the exercise of the resulting long option position. E:\FR\FM\21NON1.SGM 21NON1 Federal Register / Vol. 71, No. 224 / Tuesday, November 21, 2006 / Notices professionals, whose profit margins are generally narrow, the Exchange caps the transaction fees associated with such executions at $1,000 per strategy execution that is executed on the same trading day in the same option class. In addition, the Exchange has a monthly fee cap of $25,000 per initiating firm for all strategy executions. At this time, the Exchange is proposing to lower the daily transaction fee cap in order to stay competitive with other national options exchanges. The Exchange proposes lowering the daily fee cap to $750 per execution. The monthly cap of $25,000 will remain unchanged. NYSE Arca believes that, by keeping fees on strategy executions low, the Exchange will be able to attract additional liquidity by accommodating these transactions. The Exchange notes that OTP Holders and OTP Firms who wish to benefit from the fee cap would be required to submit to the Exchange forms with supporting documentation (e.g., clearing firm transaction data) to qualify for the cap. 2. Statutory Basis The Exchange believes that proposal is consistent with Section 6(b) of the Act,10 in general, and Section 6(b)(4) 11 in particular, in that it provides for the equitable allocation of dues, fees, and other charges among its members. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes that the proposed rule change will not 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 were neither solicited nor received. sroberts on PROD1PC70 with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 12 and Rule 19b–4(f)(2) 13 thereunder because it establishes or changes a due, fee, or other charge imposed by the Exchange. 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 10 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 12 15 U.S.C. 78s(b)(3)(A)(ii). 13 17 CFR 240.19b–4(f)(2). 11 15 VerDate Aug<31>2005 14:17 Nov 20, 2006 Jkt 211001 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 67415 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.14 Nancy M. Morris, Secretary. [FR Doc. E6–19621 Filed 11–20–06; 8:45 am] BILLING CODE 8011–01–P 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 rulecomments@sec.gov. Please include File No. SR–NYSEArca–2006–88 on the subject line. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54748; File No. SR–OCC– 2006–01] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Amended Filing of Proposed Rule Change To Revise Option Adjustment Methodology November 14, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on January 12, 2006, The Options Clearing Corporation (‘‘OCC’’) filed with the Paper Comments Securities and Exchange Commission • Send paper comments in triplicate (‘‘Commission’’) the proposed rule to Nancy M. Morris, Secretary, change as described in Items I, II, and Securities and Exchange Commission, III below, which items have been Station Place, 100 F Street, NE., prepared by OCC. On March 9, 2006, the Washington, DC 20549–1090. Commission published notice of the proposed rule change to solicit All submissions should refer to File comments from interested parties.2 The Number SR–NYSEArca–2006–88. This Commission received ten comment file number should be included on the 3 subject line if e-mail is used. To help the letters. To address the concerns raised by the commenters, OCC amended the Commission process and review your proposed rule change on September 25, comments more efficiently, please use only one method. The Commission will 2006. The Commission is publishing this notice to solicit comments on the post all comments on the Commissions proposed rule change, as amended, from Internet Web site (http://www.sec.gov/ interested parties. rules/sro.shtml). Copies of the submission, all subsequent I. Self-Regulatory Organization’s amendments, all written statements Statement of the Terms of Substance of with respect to the proposed rule the Proposed Rule Change change that are filed with the OCC is seeking to amend Article VI Commission, and all written (Clearance of Exchange Transactions), communications relating to the Section 11A of OCC’s By-Laws to (1) proposed rule change between the eliminate the need to round strike prices Commission and any person, other than and/or units of trading in the event of those that may be withheld from the certain stock dividends, stock public in accordance with the distributions, and stock splits and (2) provisions of 5 U.S.C. 552, will be available for inspection and copying in 14 17 CFR 200.30–3(a)(12). the Commission’s Public Reference 1 15 U.S.C. 78s(b)(1). 2 Securities Exchange Act Release No. 53400 Room. Copies of the filing also will be (March 2, 2006), 71 FR 12226. available for inspection and copying at 3 Joseph Haggenmiller (March 8, 2006); Erik A. the principal office of NYSE Arca. All Hartog, Operating Manager, Allagash Trading LLC comments received will be posted (March 21, 2006); Jeffrey Woodring (March 22, without change; the Commission does 2006); Adam Besch-Turner (March 23, 2006); Christopher Nagy, Chairman, Options Committee, not edit personal identifying Securities Industry Association (March 24, 2006); information from submissions. You Mike Ianni (April 5, 2006); Mike Ianni (April 5, should submit only information that 2006); Peter van Dooijeweert, President, Alopex you wish to make available publicly. All Capital Management, LLC (April 26, 2006); Bob Linville and Deborah Mittelman, Service Bureau submissions should refer to File Committee Co-Chairs, Financial Information Forum Number SR–NYSEArca–2006–88 and (May 2, 2006); and William H. Navin, Executive should be submitted on or before Vice President, General Counsel, and Secretary, The December 12, 2006. Options Clearing Corporation (September 29, 2006). PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 E:\FR\FM\21NON1.SGM 21NON1

Agencies

[Federal Register Volume 71, Number 224 (Tuesday, November 21, 2006)]
[Notices]
[Pages 67414-67415]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-19621]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54750; File No. SR-NYSEArca-2006-88]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to 
Exchange Fees and Charges

November 14, 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 November 13, 2006, NYSE Acra, Inc. (``NYSE Arca'' or ``Exchange'') 
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. NYSE Arca has designated this 
proposal as one establishing or changing a due, fee, or other charge 
imposed by a self-regulatory organization pursuant to Section 
19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(2) 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.
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    \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)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its Schedule of Fees and Charges in 
order to modify the fee that applies to Option Strategy Executions.\5\
---------------------------------------------------------------------------

    \5\ Fees on Options Strategy Executions are applicable through a 
Pilot Program until March 1, 2007.
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    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 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 represents that the purpose of this proposed rule 
change is to modify the fee that applies to ``Option Strategy 
Executions.'' These transactions include reversals and conversions,\6\ 
dividend spreads,\7\ box spreads,\8\ and merger spreads.\9\ Because the 
referenced Options Strategy Executions are generally executed by

[[Page 67415]]

professionals, whose profit margins are generally narrow, the Exchange 
caps the transaction fees associated with such executions at $1,000 per 
strategy execution that is executed on the same trading day in the same 
option class. In addition, the Exchange has a monthly fee cap of 
$25,000 per initiating firm for all strategy executions. At this time, 
the Exchange is proposing to lower the daily transaction fee cap in 
order to stay competitive with other national options exchanges. The 
Exchange proposes lowering the daily fee cap to $750 per execution. The 
monthly cap of $25,000 will remain unchanged. NYSE Arca believes that, 
by keeping fees on strategy executions low, the Exchange will be able 
to attract additional liquidity by accommodating these transactions.
---------------------------------------------------------------------------

    \6\ Reversals and conversions are transactions that employ 
calls, puts, and the underlying stock to lock in a nearly risk free 
profit. Reversals are established by combining a short stock 
position with a short put and a long call position that shares the 
same strike and expiration. Conversions employ long positions in the 
underlying stock that accompany long puts and short calls sharing 
the same strike and expiration.
    \7\ Dividend spreads are trades involving deep-in-the-money 
options that exploit pricing differences arising around the time a 
stock goes ex-dividend.
    \8\ Box Spreads is a strategy that synthesizes long and short 
stock positions to create a profit. Specifically, a long call and 
short put at one strike is combined with a short call and long put 
at a different strike to create synthetic long and synthetic short 
stock positions, respectively.
    \9\ A merger spread is a transaction executed pursuant to a 
strategy involving the simultaneous purchase and sale of options of 
the same class and expiration date, but with different strike prices 
followed by the exercise of the resulting long option position.
---------------------------------------------------------------------------

    The Exchange notes that OTP Holders and OTP Firms who wish to 
benefit from the fee cap would be required to submit to the Exchange 
forms with supporting documentation (e.g., clearing firm transaction 
data) to qualify for the cap.
2. Statutory Basis
    The Exchange believes that proposal is consistent with Section 6(b) 
of the Act,\10\ in general, and Section 6(b)(4) \11\ in particular, in 
that it provides for the equitable allocation of dues, fees, and other 
charges among its members.

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

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

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

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

    Written comments were neither solicited nor received.

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

    The foregoing proposed rule change has become effective pursuant to 
Section 19(b)(3)(A)(ii) of the Act \12\ and Rule 19b-4(f)(2) \13\ 
thereunder because it establishes or changes a due, fee, or other 
charge imposed by the Exchange. 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.
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    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \13\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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 No. SR-NYSEArca-2006-88 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-NYSEArca-2006-88. 
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-2006-88 and should be submitted on or before 
December 12, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
[FR Doc. E6-19621 Filed 11-20-06; 8:45 am]
BILLING CODE 8011-01-P