Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Relating to the Retroactive Application of an Increase to Its Linkage Order Fee, 75601-75602 [E6-21372]

Download as PDF Federal Register / Vol. 71, No. 241 / Friday, December 15, 2006 / Notices be sent to both the introducing firm and the clearing firm. The legend also would need to advise the customer that he or she should re-confirm any oral communications with either the clearing or introducing firm in writing to further protect the customer’s rights, including rights under the SIPA. The Exchange also is proposing to adopt a new rule, NYSE Rule 409A, which would require member organizations to advise each customer in writing, upon the opening of an account and at least annually thereafter, that he or she may obtain information from SIPC.10 Proposed Rule 409A would require the written advisories to include SIPC’s Web site address and telephone number, and, if the account is subject to a clearing agreement pursuant to NYSE Rule 382, the rule would permit its requirements to be delegated to either the introducing firm or the clearing firm. NYSE initially proposed an effective date of 180 days after SEC approval of the proposed amendments to Rule 409(e) and proposed new Rule 409A. However, to coordinate the effective date of these rule changes with the effective dates proposed for related rule changes proposed by NASD,11 NYSE has changed the proposed effective date to May 31, 2007.12 mstockstill on PROD1PC61 with NOTICES III. Discussion and Findings The Commission finds that the proposed rule change is consistent with the requirements of the Exchange Act and the rules and regulations thereunder applicable to a national securities exchange, and in particular, with the requirements of Sections 6(b)(5) of the Exchange Act.13 Section 6(b)(5) requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and national market system, and in general, to protect investors and the 10 NASD also is proposing to adopt new NASD Rule 2342, which would require NASD members to advise new customers in writing at the opening of an account, and advise all customers in writing at least once each year, that they may obtain information about SIPC, including the SIPC Brochure, by contacting SIPC, and to provide customers with SIPC’s telephone number and Web site address at those times. See File No. SR–NASD– 2006–124. 11 See File Nos. SR–NASD 2006–128 (proposing May 31, 2007, as new effective date for rule change approved in SR–NASD–2004–171) and SR–NASD– 2006–124 (with proposed effective date of May 31, 2007). 12 Telephone conversation between William Jannace, Director, Rule and Interpretive Standards, NYSE, and Brice Prince, Special Counsel, Division of Market Regulation, Commission, on November 8, 2006. 13 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 15:47 Dec 14, 2006 Jkt 211001 public interest. The Commission believes the proposed rule change is consistent with the provision of the Exchange Act noted above because it should help investors understand the scope of coverage of the SIPA, and it should help investors understand procedures for preserving their rights in the event of erroneous or unauthorized transactions in their accounts. While the Commission believes that the proposal would improve NYSE’s current customer account disclosure requirements, we believe that the disclosure would be more beneficial to investors if it required NYSE member organizations to include on account statements both introducing and clearing firm contact information sufficient to allow investors to timely report unauthorized transactions or other account discrepancies to both firms (if the firms are different). We believe such disclosure would be consistent with current Commission guidance on this issue.14 We also believe that such disclosure would help ensure that a customer’s concern is delivered to the most appropriate person at the firm. The Commission therefore encourages NYSE to issue guidance to its member organizations regarding the proposed change to Rule 409 that reminds member firms of their current obligations with respect to customer account statements. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act 15 that the proposed rule change (SR–NASD–2005– 09), as amended, be, and hereby is, approved,16 effective May 31, 2007. 14 See Exchange Act Release No. 31511 (Nov. 24, 1992), 57 FR 56973 (Dec. 2, 1992) (amending the SEC’s net capital rule and explaining the staff’s interpretation that to avoid more stringent capital requirements under the rule, an introducing firm must ‘‘have in place a clearing agreement with a registered broker-dealer that states, for the purposes of SIPA and the Commission’s financial responsibility rules, customers are customers of the clearing, and not the introducing, firm. Furthermore, the clearing firm must issue account statements directly to customers. Each statement must contain the name and telephone number of a responsible individual at the clearing firm whom a customer can contact with inquiries regarding the customer’s account.’’). See also NYSE Interpretation Handbook at 4105 (carrying organization phone number may appear on the back of the customer account statement, but, if so, it must be in ‘‘bold’’ or ‘‘highlighted’’ text). 15 15 U.S.C. 78s(b)(2). 16 In approving this proposed rule change, the Commission has considered the proposed rule change’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 17 17 CFR 200.30–3(a)(12). PO 00000 Frm 00127 Fmt 4703 Sfmt 4703 75601 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.17 Florence E. Harmon, Deputy Secretary. [FR Doc. E6–21362 Filed 12–14–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54912; File No. SR–NYSE– 2006–110] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Relating to the Retroactive Application of an Increase to Its Linkage Order Fee December 11, 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 December 6, 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, 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 proposes to retroactively apply, as of December 1, 2006, an increase from $0.00025 to $0.000275 per share in the fee (‘‘Linkage Order Fee’’) it charges its member organizations in connection with orders in equities executed in another market pursuant to the Plan for the Purpose of Creating and Operating an Intermarket Communications Linkage (‘‘Linkage Plan’’). The text of the proposed rule change is available on the Exchange’s Web site (https://www.nyse.com), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room.3 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 The text of the proposed rule change was filed as Exhibit No. 5 to the Exchange’s December 4, 2006, filing (see SR–NYSE–2006–108), which established the revised Linkage Order Fee as immediately effective on that date. 2 17 E:\FR\FM\15DEN1.SGM 15DEN1 75602 Federal Register / Vol. 71, No. 241 / Friday, December 15, 2006 / Notices II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NYSE 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 retroactively apply, as of December 1, 2006, an increase from $0.00025 to $0.000275 per share in the Linkage Order Fee it charges its member organizations in connection with orders in equities executed in another market pursuant to the Linkage Plan. This increase in the Linkage Order Fee became effective on Monday, December 4, 2006 pursuant to a previous rule change submitted by the Exchange.4 The Linkage Order Fee was increased to $0.000275 to set it at the same level as the regular equity transaction fee, which was increased to that level as of December 1, 2006.5 The current filing simply applies the revised Linkage Order Fee to transactions that occurred on December 1, 2006, which is the only business day with respect to which the Linkage Order Fee and the regular equity transaction fee have not been harmonized by the previous filing. The Exchange wishes to harmonize the Linkage Order Fee payable on transactions executed through the Linkage on December 1, 2006, with the regular equity transaction fee payable on that day because the difference in the amount payable by customers would be immaterial, but the Exchange would incur significant costs in identifying those transactions which should be charged the lower fee rate.6 2. Statutory Basis Electronic Comments The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 7 of the Act in general, and furthers the objectives of Section 6(b)(4)8 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. The Exchange believes that it is equitable to retroactively increase the Linkage Order Fee payable on transactions executed through the Linkage on December 1, 2006, to harmonize it with the regular equity transaction fee payable on that day, because the difference in the amount payable by customers would be immaterial, but the Exchange would incur significant costs in identifying those transactions which should be charged the lower fee rate. • 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–2006–110 on the subject line. 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 were neither solicited nor received. 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 the Exchange consents, the Commission will: (A) by order approve the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments mstockstill on PROD1PC61 with NOTICES 4 See id. 5 See Exchange Act Release No. 54856 (December 1, 2006); 71 FR 71215 (December 8, 2006) (SR– NYSE–2006–106). 6 The Exchange estimates that the difference in the amount of Linkage Order Fees payable under the old rate as compared to the proposed revised rate by customers for trades executed on December 1, 2006, would be less than $2,000.00. Telephone conversation between John Carey, Assistant General Counsel, NYSE, and Nathan Saunders, Special Counsel, Division of Market Regulation, Commission, December 7, 2006. VerDate Aug<31>2005 15:47 Dec 14, 2006 Jkt 211001 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: 7 15 8 15 PO 00000 U.S.C. 78f. U.S.C. 78f(b)(4). Frm 00128 Fmt 4703 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–2006–110. 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 the 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–2006–110 and should be submitted on or before January 5, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.9 Florence E. Harmon, Deputy Secretary. [FR Doc. E6–21372 Filed 12–14–06; 8:45 am] BILLING CODE 8011–01–P 9 17 Sfmt 4703 E:\FR\FM\15DEN1.SGM CFR 200.30–3(a)(12). 15DEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 71, Number 241 (Friday, December 15, 2006)]
[Notices]
[Pages 75601-75602]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-21372]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54912; File No. SR-NYSE-2006-110]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change Relating to the Retroactive 
Application of an Increase to Its Linkage Order Fee

December 11, 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 December 6, 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, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to retroactively apply, as of December 1, 
2006, an increase from $0.00025 to $0.000275 per share in the fee 
(``Linkage Order Fee'') it charges its member organizations in 
connection with orders in equities executed in another market pursuant 
to the Plan for the Purpose of Creating and Operating an Intermarket 
Communications Linkage (``Linkage Plan'').
    The text of the proposed rule change is available on the Exchange's 
Web site (https://www.nyse.com), at the Exchange's Office of the 
Secretary, and at the Commission's Public Reference Room.\3\
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    \3\ The text of the proposed rule change was filed as Exhibit 
No. 5 to the Exchange's December 4, 2006, filing (see SR-NYSE-2006-
108), which established the revised Linkage Order Fee as immediately 
effective on that date.

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[[Page 75602]]

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NYSE 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 retroactively apply, as of December 1, 
2006, an increase from $0.00025 to $0.000275 per share in the Linkage 
Order Fee it charges its member organizations in connection with orders 
in equities executed in another market pursuant to the Linkage Plan. 
This increase in the Linkage Order Fee became effective on Monday, 
December 4, 2006 pursuant to a previous rule change submitted by the 
Exchange.\4\ The Linkage Order Fee was increased to $0.000275 to set it 
at the same level as the regular equity transaction fee, which was 
increased to that level as of December 1, 2006.\5\ The current filing 
simply applies the revised Linkage Order Fee to transactions that 
occurred on December 1, 2006, which is the only business day with 
respect to which the Linkage Order Fee and the regular equity 
transaction fee have not been harmonized by the previous filing. The 
Exchange wishes to harmonize the Linkage Order Fee payable on 
transactions executed through the Linkage on December 1, 2006, with the 
regular equity transaction fee payable on that day because the 
difference in the amount payable by customers would be immaterial, but 
the Exchange would incur significant costs in identifying those 
transactions which should be charged the lower fee rate.\6\
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    \4\ See id.
    \5\ See Exchange Act Release No. 54856 (December 1, 2006); 71 FR 
71215 (December 8, 2006) (SR-NYSE-2006-106).
    \6\ The Exchange estimates that the difference in the amount of 
Linkage Order Fees payable under the old rate as compared to the 
proposed revised rate by customers for trades executed on December 
1, 2006, would be less than $2,000.00. Telephone conversation 
between John Carey, Assistant General Counsel, NYSE, and Nathan 
Saunders, Special Counsel, Division of Market Regulation, 
Commission, December 7, 2006.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 \7\ of the Act in general, and 
furthers the objectives of Section 6(b)(4)\8\ in particular, in that it 
is designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its members and other persons using its 
facilities. The Exchange believes that it is equitable to retroactively 
increase the Linkage Order Fee payable on transactions executed through 
the Linkage on December 1, 2006, to harmonize it with the regular 
equity transaction fee payable on that day, because the difference in 
the amount payable by customers would be immaterial, but the Exchange 
would incur significant costs in identifying those transactions which 
should be charged the lower fee rate.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

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

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

    Written comments were neither solicited nor received.

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 the Exchange consents, the Commission will:
    (A) by order approve the 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:

Electronic Comments

     Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2006-110 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-2006-110. 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 the 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-2006-110 and should be submitted on or before January 5, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
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    \9\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E6-21372 Filed 12-14-06; 8:45 am]
BILLING CODE 8011-01-P

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