Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Firm Facilitation, Royalty, and Booth Fees, 35290-35291 [E7-12391]

Download as PDF 35290 Federal Register / Vol. 72, No. 123 / Wednesday, June 27, 2007 / Notices DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such 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–2007–54 and should be submitted on or before July 18, 2007. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change NYSE Arca proposes to amend its Schedule of Fees and Charges for Exchange Services (‘‘Schedule’’) by making a technical change to the Firm Facilitation fee, eliminating one Royalty Fee, adding another, and capping the fees it charges to OTP Firms for booths on the options trading floor. The text of the proposed rule change is available at the Exchange, its Web Site (http:// www.nyse.com/regulation), and the Commission’s Public Reference Room. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.13 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–12389 Filed 6–26–07; 8:45 am] 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. BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55906; File No. SR– NYSEArca–2007–46] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Firm Facilitation, Royalty, and Booth Fees June 13, 2007. jlentini on PROD1PC65 with NOTICES 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 May 31, 2007, NYSE Arca, 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 substantially prepared by the Exchange. NYSE Arca has designated this proposal as one establishing or changing a due, fee, or other charge imposed by the Exchange under Section 19(b)(3)(A)(ii) 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. 13 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)(ii). 4 17 CFR 240.19b–4(f)(2). 1 15 VerDate Aug<31>2005 15:50 Jun 26, 2007 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this filing is to amend the existing Schedule by: (1) Making a technical change to the Firm Facilitation Fee; (2) eliminating one Royalty Fee; (3) adding one new Royalty Fee; and (4) establishing a monthly cap on Booth Fees. A brief description of each proposed changes is provided below. Firm Facilitation Fees. The Firm Facilitation rate applies to transactions involving a proprietary trading account of an OTP Firm 5 that has a customer of that OTP Firm on the contra side of the transaction. This practice is generally referred to as ‘‘facilitating’’ an order. Facilitation Orders on NYSE Arca are manually traded via open outcry and are not presently eligible for electronic execution. Open outcry trades are not subject to the Post/Take pricing model that NYSE Arca utilizes for issues that trade as part of the Penny Pilot. Accordingly, the Schedule now reads ‘‘N/A’’ for Firm Facilitation fees under both ‘‘Post’’ and ‘‘Take’’ Liquidity. Once the Facilitation Orders are fully automated, the Exchange will file with 5 See NYSE Arca Options Rule 1.1(r) (defining ‘‘OTP Firm’’). Jkt 211001 PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 the Commission, a proposal for a new Post/Take rate for this order type. Royalty Fees. The Exchange proposes to eliminate Royalty Fees for options traded on the NASDAQ Fidelity Composite Index ETF (ONEQ). The Exchange will no longer collect the $0.12 per contract fee on any trades in ONEQ. By eliminating these fees, the Exchange hopes to attract additional order flow and encourage more trading by market participants. The Exchange plans to commence trading of options on the KBW Bank Index (BKX). The Exchange has entered into a licensing agreement with Keefe, Bruyette & Woods Inc., the firm that created and maintains the fund. As a part of this agreement, NYSE Arca will pay a fee to Keefe, Bruyette & Woods on every contract traded on the Exchange. Effective with this filing, the Exchange will assess a $0.10 Royalty Fee, on a per contract basis, for Firm, Broker/Dealer, and Market Maker transactions in options on the KBW Bank Index. For electronic executions in issues included in the Penny Pilot, Royalty Fees will be passed through to the trading participant on the ‘‘Take’’ side of the transaction.6 Booth Fees. OTP Firms apply for, and receive permission to use, booths on the options trading floor. The Exchange currently charges a $350 per month fee for each booth that an OTP Firm uses, without any monthly cap. The Exchange now proposes capping this fee at $3500 per month. Going forward, firms will pay a maximum monthly booth fee of $3500 regardless of how many booths they are authorized to use. 2. Statutory Basis The Exchange believes that the proposal is consistent with Section 6(b) of the Act,7 in general, and Section 6(b)(4),8 in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among its members. 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. 6 See telephone conversation between Andrew Stevens, Assistant General Counsel, Amex, and Christopher Chow, Special Counsel, Commission, on June 13, 2007. 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(4). E:\FR\FM\27JNN1.SGM 27JNN1 Federal Register / Vol. 72, No. 123 / Wednesday, June 27, 2007 / Notices 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 The foregoing proposed rule change has been designated as a fee change pursuant to Section 19(b)(3)(A)(ii) of the Act 9 and Rule 19b–4(f)(2) 10 thereunder, because it establishes or changes a due, fee, or other charge imposed by the Exchange. Accordingly, the proposal is effective upon filing with the Commission. 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. 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: jlentini on PROD1PC65 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 Number SR–NYSEArca–2007–46 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–2007–46. 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 9 15 U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). 15:50 Jun 26, 2007 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–12391 Filed 6–26–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55939; File No. SR–OCC– 2007–06] Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to Credit Default Basket Options June 21, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on April 20, 2007, The Options Clearing Corporation (‘‘OCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) and on June 16, 2007, amended the proposed rule change described in Items I, II, and III below, which items have been prepared primarily by OCC. The Commission is publishing this notice to solicit comments from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The purposed rule change would permit OCC to clear and settle credit default basket options (‘‘CDBOs’’). 11 17 10 17 VerDate Aug<31>2005 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–NYSEArca–2007–46 and should be submitted on or before July 18, 2007. 1 15 Jkt 211001 PO 00000 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). Frm 00077 Fmt 4703 Sfmt 4703 35291 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, OCC 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. OCC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.2 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The purpose of the proposed rule change is to permit OCC to clear and settle CDBOs, which are options related to the creditworthiness of an issuer or guarantor (‘‘reference entity’’) of one or more specified debt securities (‘‘reference obligations’’). CDBOs are proposed to be traded by the Chicago Board Options Exchange (‘‘CBOE’’).3 CDBOs are binary options that pay a fixed amount to the holder of the option upon the occurrence of a ‘‘credit event’’ affecting the reference obligations.4 Characteristics of CDBOs are described below, followed by an explanation of the specific rule changes being proposed in order that OCC may clear and settle them. Description of Credit Default Basket Options CDBOs are structured as binary options with an automatic exercise feature. They are very similar to Credit Default Options (‘‘CDOs’’) that were recently approved for trading by CBOE and clearing by OCC except that CDBOs are based upon multiple reference entities instead of a single reference entity.5 A CDBO will be automatically exercised and an exercise settlement amount will be payable if a ‘‘credit event’’ occurs with respect to any one of the reference entities at any time prior to the last day of trading. As in the case 2 The Commission has modified the text of the summaries prepared by OCC. 3 Securities Exchange Act Release No. 55938 (June 21, 2007) (notice of filing of proposed rule change) [File No. SR–CBOE–2007–26]. 4 ‘‘Binary’’ options (also sometimes referred to as ‘‘digital’’ options) are ‘‘all-or-nothing’’ options that pay a fixed amount if automatically exercised and otherwise pay nothing. 5 Securities Exchange Act Release No. 55871 (June 6, 2007), 72 FR 32372 (June 12, 2007) [File No. SR–CBOE–2006–84]. See also Securities Exchange Act Release No. 55872 (June 6, 2007), 72 FR 32693 (June 13, 2007) [File No. SR–OCC–2007– 01]. E:\FR\FM\27JNN1.SGM 27JNN1

Agencies

[Federal Register Volume 72, Number 123 (Wednesday, June 27, 2007)]
[Notices]
[Pages 35290-35291]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-12391]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55906; File No. SR-NYSEArca-2007-46]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change Relating to Firm 
Facilitation, Royalty, and Booth Fees

 June 13, 2007.
    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 May 31, 2007, NYSE Arca, 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 substantially prepared by the Exchange. NYSE Arca has 
designated this proposal as one establishing or changing a due, fee, or 
other charge imposed by the Exchange under Section 19(b)(3)(A)(ii) 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \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

    NYSE Arca proposes to amend its Schedule of Fees and Charges for 
Exchange Services (``Schedule'') by making a technical change to the 
Firm Facilitation fee, eliminating one Royalty Fee, adding another, and 
capping the fees it charges to OTP Firms for booths on the options 
trading floor. The text of the proposed rule change is available at the 
Exchange, its Web Site (http://www.nyse.com/regulation), and 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 purpose of this filing is to amend the existing Schedule by: 
(1) Making a technical change to the Firm Facilitation Fee; (2) 
eliminating one Royalty Fee; (3) adding one new Royalty Fee; and (4) 
establishing a monthly cap on Booth Fees. A brief description of each 
proposed changes is provided below.
    Firm Facilitation Fees. The Firm Facilitation rate applies to 
transactions involving a proprietary trading account of an OTP Firm \5\ 
that has a customer of that OTP Firm on the contra side of the 
transaction. This practice is generally referred to as ``facilitating'' 
an order. Facilitation Orders on NYSE Arca are manually traded via open 
outcry and are not presently eligible for electronic execution. Open 
outcry trades are not subject to the Post/Take pricing model that NYSE 
Arca utilizes for issues that trade as part of the Penny Pilot. 
Accordingly, the Schedule now reads ``N/A'' for Firm Facilitation fees 
under both ``Post'' and ``Take'' Liquidity. Once the Facilitation 
Orders are fully automated, the Exchange will file with the Commission, 
a proposal for a new Post/Take rate for this order type.
---------------------------------------------------------------------------

    \5\ See NYSE Arca Options Rule 1.1(r) (defining ``OTP Firm'').
---------------------------------------------------------------------------

    Royalty Fees. The Exchange proposes to eliminate Royalty Fees for 
options traded on the NASDAQ Fidelity Composite Index ETF (ONEQ). The 
Exchange will no longer collect the $0.12 per contract fee on any 
trades in ONEQ. By eliminating these fees, the Exchange hopes to 
attract additional order flow and encourage more trading by market 
participants.
    The Exchange plans to commence trading of options on the KBW Bank 
Index (BKX). The Exchange has entered into a licensing agreement with 
Keefe, Bruyette & Woods Inc., the firm that created and maintains the 
fund. As a part of this agreement, NYSE Arca will pay a fee to Keefe, 
Bruyette & Woods on every contract traded on the Exchange. Effective 
with this filing, the Exchange will assess a $0.10 Royalty Fee, on a 
per contract basis, for Firm, Broker/Dealer, and Market Maker 
transactions in options on the KBW Bank Index. For electronic 
executions in issues included in the Penny Pilot, Royalty Fees will be 
passed through to the trading participant on the ``Take'' side of the 
transaction.\6\
---------------------------------------------------------------------------

    \6\ See telephone conversation between Andrew Stevens, Assistant 
General Counsel, Amex, and Christopher Chow, Special Counsel, 
Commission, on June 13, 2007.
---------------------------------------------------------------------------

    Booth Fees. OTP Firms apply for, and receive permission to use, 
booths on the options trading floor. The Exchange currently charges a 
$350 per month fee for each booth that an OTP Firm uses, without any 
monthly cap. The Exchange now proposes capping this fee at $3500 per 
month. Going forward, firms will pay a maximum monthly booth fee of 
$3500 regardless of how many booths they are authorized to use.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act,\7\ in general, and Section 6(b)(4),\8\ in particular, 
in that it provides for the equitable allocation of reasonable dues, 
fees, and other charges among its members.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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.

[[Page 35291]]

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

    The foregoing proposed rule change has been designated as a fee 
change pursuant to Section 19(b)(3)(A)(ii) of the Act \9\ and Rule 19b-
4(f)(2) \10\ thereunder, because it establishes or changes a due, fee, 
or other charge imposed by the Exchange. Accordingly, the proposal is 
effective upon filing with the Commission. 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 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 Number SR-NYSEArca-2007-46 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-2007-46. 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-NYSEArca-2007-46 and should be submitted on or before 
July 18, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-12391 Filed 6-26-07; 8:45 am]
BILLING CODE 8010-01-P