Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Adding a New Order Type Known As the Mid-Point Passive Liquidity Order, 39867-39869 [E7-14036]

Download as PDF Federal Register / Vol. 72, No. 139 / Friday, July 20, 2007 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Nasdaq proposes to modify the manner in which a member’s average daily volume is determined by excluding from the calculation days when the market is not open for the entire trading day. An example of such a partial trading day is Tuesday, July 3, 2007. On that day Nasdaq will cease trading at 1 p.m. Eastern Time (‘‘ET’’) 5 and, thus, trading for that day will be excluded from the calculation of a member’s average daily volume. The change will ensure that members close to achieving the average daily volume required for a particular pricing level will not find it more difficult to achieve that level simply because a month contains a partial trading day. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of section 6 of the Act,6 in general, and with sections 6(b)(4) of the Act,7 in particular, in that the proposal provides for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using any facility or system which Nasdaq operates or controls. Nasdaq believes that the change is reasonable because it will facilitate members achieving volume levels required for particular pricing levels in months with partial trading days. B. Self-Regulatory Organization’s Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in 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 mstockstill on PROD1PC66 with NOTICES Written comments were neither solicited nor received. 5 Although Nasdaq will officially ‘‘close’’ at 1 p.m. ET, Nasdaq will continue trading in an after hours session until 5 p.m. ET; compared to ‘‘full trading days’’ times of 4 p.m. ET and 8 p.m. ET, respectively. 6 15 U.S.C. 78f. 7 15 U.S.C. 78f(b)(4). VerDate Aug<31>2005 16:19 Jul 19, 2007 Jkt 211001 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to section 19(b)(3)(A)(ii) of the Act 8 and subparagraph (f)(2) of Rule 19b–4 thereunder 9 because it establishes or changes a due, fee, or other charge applicable only to a member imposed by the self-regulatory organization. Accordingly, the proposal is effective upon Commission receipt of the filing. 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. 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 rulecomments@sec.gov. Please include File Number SR–NASDAQ–2007–062 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–NASDAQ–2007–062. 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 PO 00000 8 15 9 17 U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). Frm 00084 Fmt 4703 Sfmt 4703 39867 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, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the 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–2007–062 and should be submitted on or August 10, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–14055 Filed 7–19–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56072; File No. SR– NYSEArca–2007–61] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Adding a New Order Type Known As the Mid-Point Passive Liquidity Order July 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 June 29, 2007, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’), through its wholly-owned subsidiary, NYSE Arca Equities, Inc. (‘‘NYSE Arca Equities’’ or ‘‘Corporation’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Exchange filed the proposed rule change pursuant to section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder, which renders it effective upon filing with the Commission.4 The Commission is publishing this notice to 10 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). 4 17 CFR 240.19b–4(f)(6). 1 15 E:\FR\FM\20JYN1.SGM 20JYN1 39868 Federal Register / Vol. 72, No. 139 / Friday, July 20, 2007 / Notices 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, through its whollyowned subsidiary, NYSE Arca Equities proposes to amend its rules in order to add a new order type known as the MidPoint Passive Liquidity Order (‘‘MPL Order’’). The changes described in this rule proposal would add new NYSE Arca Equities Rule 7.31(h)(5) and would amend existing Rule 7.37(d)(2). The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and http:// www.nyse.com. 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 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 As part of its continuing efforts to provide additional flexibility and increased functionality to its system and its Users,5 the Exchange proposes to add a new order type known as the MPL Order. The MPL Order is a version of the NYSE Arca Passive Liquidity Order,6 except that it will be executable only at the midpoint of the Protected Best Bid and Offer (‘‘PBBO’’).7 mstockstill on PROD1PC66 with NOTICES MPL Order Execution in NYSE Arca The MPL Order will follow the same execution priority rules as the Passive Liquidity Order.8 MPL Orders always execute at the midpoint of the PBBO and do not receive price improvement. MPL Orders will be ranked in time priority for the purposes of execution as long as the midpoint is within the limit range of the order. The Exchange may set a minimum entry size for MPL Orders from time to time, with the 5 See NYSE Arca Equities Rule 1.1(yy) for the definition of ‘‘User.’’ 6 See NYSE Arca Equities Rule 7.31(h)(4). 7 See NYSE Arca Equities Rule 1.1(eee) for the definitions of ‘‘Protected Bid’’ and Protected Offer.’’ 8 See NYSE Arca Equities Rule 7.31(h)(4) and 7.37(b)(2)(A)(iv). VerDate Aug<31>2005 16:19 Jul 19, 2007 Jkt 211001 initial minimum entry size set at 1,000 shares. Users may specify a minimum executable size for an MPL Order, but no less than 1,000 shares. An MPL Order with a specified minimum executable size will execute against an incoming order that meets the minimum executable size and is priced at or better than the midpoint of the PBBO.9 An MPL Order may be executed in subpennies if necessary to attain a midpoint price. Users may mark incoming limit orders with a ‘‘No Midpoint Execution’’ designator; so marked, those limit orders will ignore MPL Orders and trade against the rest of the book in the ordinary course. MPL Orders will not be exclusive to Lead Market Makers 10 (‘‘LMMs’’) where NYSE Arca is the primary listings market. MPL Orders will be valid for any session but will not participate in any auctions. If the market is locked, the eligible MPL Order will trade at the locked price. If the market is crossed, the MPL Order will wait for the market to uncross before becoming eligible to trade again. MPL Orders will interact with all order types including contra MPL Orders, with the exception of cross orders. MPL Orders will not route out of NYSE Arca to other market centers. For purposes of the NYSE Arca rules related to Regulation NMS, MPL Orders will never be routed to Protected or Manual Quotations. An MPL Order will not trade-through a Protected Quotation. The Exchange believes that the implementation of the aforementioned rule changes adding a new order type and the related NYSE Arca order processing modifications will enhance order execution opportunities on NYSE Arca.11 The Exchange believes that the proposed order type will allow for additional opportunities for liquidity providers, especially institutions, to passively interact with interest in the NYSE Arca book. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with 9 For example, an order may be entered to buy 10,000 MPL with a minimum size of 2,000. This would allow for execution of the MPL order only if the contra size order were at least 2,000 shares. If the leaves quantity becomes less than the minimum size, the minimum size restriction will no longer be enforced on executions. 10 See NYSE Arca Equities Rule 1.1(ccc) for definition of ‘‘Lead Market Makers.’’ 11 This proposed order type is similar to the MidPoint Match mechanism of the International Securities Exchange, Inc. (‘‘ISE’’), previously approved by the Commission. See Securities Exchange Act Release No. 54528 (September 28, 2006), 71 FR 58650 (October 4, 2006) (SR–ISE– 2006–48). PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 section 6(b) of the Act 12 in general, and furthers the objectives of section 6(b)(5) of the Act 13 in particular, because it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. 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) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A) 14 of the Act and Rule 19b– 4(f)(6) thereunder.15 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. NYSE Arca has asked the Commission to waive the 30-day operative delay. The Commission believes such a waiver is consistent with the protection of investors and the public interest because it would permit the Exchange to codify the proposed order type, the MPL without delay.16 For this reason, the Commission designates the proposal to 12 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 14 15 U.S.C. 78s(b)(3)(A). 15 17 CFR 240.19b–4(f)(6). 16 For purposes only of waiving the 30-day preoperative period, the Commission has considered the proposed rule’s impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 13 15 E:\FR\FM\20JYN1.SGM 20JYN1 Federal Register / Vol. 72, No. 139 / Friday, July 20, 2007 / Notices be operative upon filing with the Commission. 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: For the Commission, by the Division of Market Regulation, pursuant to delegated authority.17 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–14036 Filed 7–19–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56069; File No. SR–OCC– 2006–19] 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–2007–61 on the subject line. Self-Regulatory Organizations; The Options Clearing Corporation; Order Granting Approval of a Proposed Rule Change Relating to Close-Out Netting Procedures July 13, 2007. I. Introduction On October 10, 2006, The Options Clearing Corporation (‘‘OCC’’) filed with • Send paper comments in triplicate the Securities and Exchange to Nancy M. Morris, Secretary, Commission (‘‘Commission’’) proposed Securities and Exchange Commission, rule change SR–OCC–2006–19 pursuant 100 F Street, NE., Washington, DC to section 19(b)(1) of the Securities 20549–1090. Exchange Act of 1934 (‘‘Act’’).1 On May All submissions should refer to File 15, 2007, OCC amended the proposed Number SR–NYSEArca–2007–61. This rule change. Notice of the proposal was file number should be included on the published in the Federal Register on subject line if e-mail is used. To help the May 29, 2007.2 On June 21, 2007, OCC Commission process and review your again amended the proposed rule comments more efficiently, please use change.3 Three comment letters were only one method. The Commission will received.4 For the reasons discussed post all comments on the Commission’s below, the Commission is granting Internet Web site (http://www.sec.gov/ approval of the proposed rule change. rules/sro.shtml). Copies of the II. Description submission, all subsequent amendments, all written statements Background with respect to the proposed rule OCC was asked by several of its change that are filed with the Clearing Members to consider adopting Commission, and all written a rule that would allow for close-out communications relating to the netting of obligations running between proposed rule change between the OCC and Clearing Members in the event Commission and any person, other than of an OCC default or insolvency. The those that may be withheld from the reason was that such a rule could public in accordance with the reduce applicable capital requirements provisions of 5 U.S.C. 552, will be for a Clearing Member’s parent company available for inspection and copying in where the parent is a U.S. or non-U.S. the Commission’s Public Reference bank or part of a Consolidated Room, 100 F Street, NE., Washington, DC 20549, on official business days 17 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). between the hours of 10 a.m. and 3 p.m. 2 Securities Exchange Act Release No. 55788 (May Copies of such filing also will be 21, 2007), 72 FR 29569. available for inspection and copying at 3 Although the proposed rule change was the principal office of NYSE Arca. All amended after it was noticed for comment in the comments received will be posted Federal Register, republication of the notice was without change; the Commission does not necessary because the June 21, 2007, amendment made only a technical change regarding not edit personal identifying the application of a financial accounting information from submissions. You interpretation. should submit only information that 4 Edward S. Grieb, Managing Director and you wish to make available publicly. All Financial Controller, Lehman Brothers Holdings Inc. (June 19, 2007); Matthew Schroeder, Chairman, submissions should refer to File Dealer Accounting Committee, Securities Industry Number SR–NYSEArca–2007–61 and and Financial Markets Association (June 19, 2007); should be submitted on or before Gregory A. Sigrist, Managing Director, Morgan August 10, 2007. Stanley, New York, New York (June 19, 2007). mstockstill on PROD1PC66 with NOTICES Paper Comments VerDate Aug<31>2005 16:19 Jul 19, 2007 Jkt 211001 PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 39869 Supervised Entity (‘‘CSE’’). The absence of a netting agreement that would apply in a default or insolvency of OCC could cause the minimum capital requirement applicable to such a parent company and its subsidiaries to be substantially larger on a consolidated basis than it would be otherwise. In the absence of a netting agreement, applicable banking regulations generally prohibit offsetting the Clearing Member’s liabilities to OCC on short positions in options and on other obligations against the Clearing Member’s credits from OCC with respect to long options positions and from other obligations of OCC. In addition, OCC believes that a close-out netting rule would clarify the accounting treatment of obligations between OCC and its Clearing Members. The proposed rule change is designed to allow Clearing Members to comply with international standards under the Basel Capital Accord adopted by the Basel Committee on Banking Supervision relating to bilateral netting (‘‘Basel Netting Standards’’).5 It is OCC’s understanding that the capital rules applicable to most banks following the Basel Netting Standards require that an enforceable netting agreement be in place in order for mutual obligations between a Clearing Member that is a bank affiliate and a counterparty such as OCC to be treated on a net basis. The policy behind this requirement is to ensure that obligations that are treated on a net basis for capital purposes can actually be offset against one another in the event of the failure of the counterparty. In the absence of an enforceable netting agreement, there is concern that the representative of the failed counterparty (i.e., OCC in this scenario) under applicable insolvency law might be able to ‘‘cherry pick’’ by assuming the benefit of contracts representing an asset to the bankruptcy estate while rejecting contracts representing a liability. This would force the non-defaulting counterparty (i.e., the Clearing Member in this scenario) to perform in full on its liabilities while sharing with other unsecured creditors in any amounts available for distribution from the bankruptcy estate to satisfy its claims. An enforceable netting agreement providing for ‘‘close-out netting’’ in the event of a default or insolvency of OCC would avoid this potential result. Chapter XI of OCC’s Rules, Suspension of a Clearing Member, provides in considerable detail for 5 For more information on the Basel Committee on Banking Supervision and the Basel Netting Standards, see the Bank for International Settlement’s Web site at: http://www.bis.org. E:\FR\FM\20JYN1.SGM 20JYN1

Agencies

[Federal Register Volume 72, Number 139 (Friday, July 20, 2007)]
[Notices]
[Pages 39867-39869]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-14036]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56072; File No. SR-NYSEArca-2007-61]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Adding a New Order 
Type Known As the Mid-Point Passive Liquidity Order

July 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 June 29, 2007, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange''), 
through its wholly-owned subsidiary, NYSE Arca Equities, Inc. (``NYSE 
Arca Equities'' or ``Corporation'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change as 
described in Items I and II below, which Items have been substantially 
prepared by the Exchange. The Exchange filed the proposed rule change 
pursuant to section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) 
thereunder, which renders it effective upon filing with the 
Commission.\4\ The Commission is publishing this notice to

[[Page 39868]]

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

    The Exchange, through its wholly-owned subsidiary, NYSE Arca 
Equities proposes to amend its rules in order to add a new order type 
known as the Mid-Point Passive Liquidity Order (``MPL Order''). The 
changes described in this rule proposal would add new NYSE Arca 
Equities Rule 7.31(h)(5) and would amend existing Rule 7.37(d)(2). The 
text of the proposed rule change is available at the Exchange, the 
Commission's Public Reference Room, and http://www.nyse.com.

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 
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
    As part of its continuing efforts to provide additional flexibility 
and increased functionality to its system and its Users,\5\ the 
Exchange proposes to add a new order type known as the MPL Order. The 
MPL Order is a version of the NYSE Arca Passive Liquidity Order,\6\ 
except that it will be executable only at the midpoint of the Protected 
Best Bid and Offer (``PBBO'').\7\
---------------------------------------------------------------------------

    \5\ See NYSE Arca Equities Rule 1.1(yy) for the definition of 
``User.''
    \6\ See NYSE Arca Equities Rule 7.31(h)(4).
    \7\ See NYSE Arca Equities Rule 1.1(eee) for the definitions of 
``Protected Bid'' and Protected Offer.''
---------------------------------------------------------------------------

MPL Order Execution in NYSE Arca
    The MPL Order will follow the same execution priority rules as the 
Passive Liquidity Order.\8\ MPL Orders always execute at the midpoint 
of the PBBO and do not receive price improvement.
---------------------------------------------------------------------------

    \8\ See NYSE Arca Equities Rule 7.31(h)(4) and 
7.37(b)(2)(A)(iv).
---------------------------------------------------------------------------

    MPL Orders will be ranked in time priority for the purposes of 
execution as long as the midpoint is within the limit range of the 
order. The Exchange may set a minimum entry size for MPL Orders from 
time to time, with the initial minimum entry size set at 1,000 shares. 
Users may specify a minimum executable size for an MPL Order, but no 
less than 1,000 shares. An MPL Order with a specified minimum 
executable size will execute against an incoming order that meets the 
minimum executable size and is priced at or better than the midpoint of 
the PBBO.\9\
---------------------------------------------------------------------------

    \9\ For example, an order may be entered to buy 10,000 MPL with 
a minimum size of 2,000. This would allow for execution of the MPL 
order only if the contra size order were at least 2,000 shares. If 
the leaves quantity becomes less than the minimum size, the minimum 
size restriction will no longer be enforced on executions.
---------------------------------------------------------------------------

    An MPL Order may be executed in subpennies if necessary to attain a 
midpoint price. Users may mark incoming limit orders with a ``No 
Midpoint Execution'' designator; so marked, those limit orders will 
ignore MPL Orders and trade against the rest of the book in the 
ordinary course.
    MPL Orders will not be exclusive to Lead Market Makers \10\ 
(``LMMs'') where NYSE Arca is the primary listings market. MPL Orders 
will be valid for any session but will not participate in any auctions. 
If the market is locked, the eligible MPL Order will trade at the 
locked price. If the market is crossed, the MPL Order will wait for the 
market to uncross before becoming eligible to trade again. MPL Orders 
will interact with all order types including contra MPL Orders, with 
the exception of cross orders.
---------------------------------------------------------------------------

    \10\ See NYSE Arca Equities Rule 1.1(ccc) for definition of 
``Lead Market Makers.''
---------------------------------------------------------------------------

    MPL Orders will not route out of NYSE Arca to other market centers. 
For purposes of the NYSE Arca rules related to Regulation NMS, MPL 
Orders will never be routed to Protected or Manual Quotations. An MPL 
Order will not trade-through a Protected Quotation.
    The Exchange believes that the implementation of the aforementioned 
rule changes adding a new order type and the related NYSE Arca order 
processing modifications will enhance order execution opportunities on 
NYSE Arca.\11\ The Exchange believes that the proposed order type will 
allow for additional opportunities for liquidity providers, especially 
institutions, to passively interact with interest in the NYSE Arca 
book.
---------------------------------------------------------------------------

    \11\ This proposed order type is similar to the MidPoint Match 
mechanism of the International Securities Exchange, Inc. (``ISE''), 
previously approved by the Commission. See Securities Exchange Act 
Release No. 54528 (September 28, 2006), 71 FR 58650 (October 4, 
2006) (SR-ISE-2006-48).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act \12\ in general, and furthers the 
objectives of section 6(b)(5) of the Act \13\ in particular, because it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, and to remove impediments to and perfect 
the mechanism of a free and open market and a national market system.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

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

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

    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) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to section 19(b)(3)(A) \14\ of the Act and Rule 19b-
4(f)(6) thereunder.\15\ 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.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    NYSE Arca has asked the Commission to waive the 30-day operative 
delay. The Commission believes such a waiver is consistent with the 
protection of investors and the public interest because it would permit 
the Exchange to codify the proposed order type, the MPL without 
delay.\16\ For this reason, the Commission designates the proposal to

[[Page 39869]]

be operative upon filing with the Commission.
---------------------------------------------------------------------------

    \16\ For purposes only of waiving the 30-day pre-operative 
period, the Commission has considered the proposed rule's impact on 
efficiency, competition and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

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-2007-61 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-2007-61. 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, 100 F Street, 
NE., Washington, 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-2007-61 and should 
be submitted on or before August 10, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-14036 Filed 7-19-07; 8:45 am]
BILLING CODE 8010-01-P