Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to the Exchange's NYSE BondsSM, 70362-70363 [E7-23921]

Download as PDF 70362 Federal Register / Vol. 72, No. 237 / Tuesday, December 11, 2007 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56894; File No. SR–NYSE– 2007–107] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to the Exchange’s NYSE BondsSM System and Trade Execution Fees December 4, 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 November 27, 2007, the New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘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 NYSE. 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 implement a four-month pilot program, effective December 1, 2007, that will issue liquidity providers a $20 credit for certain bond trades executed on the NYSE BondsSM system (‘‘NYSE Bonds’’) with an execution size of less than 20 bonds. This pilot program will terminate on the close of business March 31, 2008, and will apply to all orders. The text of the proposed rule change is available at the Exchange’s principal office, in the Commission’s Public Reference Room, and at http:// www.nyse.com. pwalker on PROD1PC71 with 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. NYSE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Aug<31>2005 19:12 Dec 10, 2007 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to implement a four-month pilot program pursuant to which it will issue liquidity providers a $20 credit for every execution on NYSE Bonds that is less than 20 bonds. This pilot program will commence on December 1, 2007 and will terminate at the close of business March 31, 2008. A liquidity provider is one who posts liquidity to the system. During the course of clearing their bond trades, liquidity providers absorb clearing costs. To offset these clearing costs, liquidity providers may increase the offer price or decrease the bid price of the bond. In doing so, the best execution of a bond order may be compromised as clearing costs increase with smaller orders. Accordingly, the Exchange proposes that liquidity providers be issued a $20 credit for executions of bond orders with an execution size of less than 20 bonds. For a liquidity provider to be eligible to receive this $20 credit, the original order posted by the liquidity provider must be for 20 bonds or more. For example, if a liquidity provider posts an order for 100 bonds and a contra side order comes in for 50 bonds, the liquidity provider will not receive a $20 credit. However, if a contra side order comes in for 10 bonds against the liquidity provider’s original posted order of 100 bonds, the liquidity provider will receive a credit of $20 for that execution from the Exchange. NYSE Bonds, which was implemented in March 2007, will continue to update its functionality to provide competitive bond trading for customers. The Exchange believes that this $20 credit will incentivize the liquidity provider to display the best price available on NYSE Bonds. 2. Statutory Basis NYSE believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,3 in general, and furthers the objectives of Section 6(b)(4) of the Act 4 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. 3 15 4 15 Jkt 214001 PO 00000 U.S.C. 78f. U.S.C. 78f(b)(4). Frm 00074 Fmt 4703 B. Self-Regulatory Organization’s Statement on Burden on Competition NYSE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of 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 Because the foregoing rule change establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the Act 5 and subparagraph (f)(2) of Rule 19b–4 thereunder.6 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–NYSE–2007–107 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–2007–107. 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 5 15 6 17 Sfmt 4703 E:\FR\FM\11DEN1.SGM U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 11DEN1 Federal Register / Vol. 72, No. 237 / Tuesday, December 11, 2007 / Notices 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. 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–2007–107 and should be submitted on or before January 2, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–23921 Filed 12–10–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56895; File No. SR–NYSE– 2007–109] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the NYSE Rule 98 Guidelines for Approved Persons Associated With a Specialist’s Member Organization pwalker on PROD1PC71 with NOTICES December 4, 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 November 28, 2007, the New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared substantially by the 7 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Aug<31>2005 19:12 Dec 10, 2007 Jkt 214001 70363 registered broker-dealer organizations. Pursuant to the proposed rule change, while NYSE Regulation would be permitted to grant a temporary exemption from section (b)(i), specialist firms and their approved persons would still be required to comply with sections (b)(ii) through (b)(x) of the Rule 98 Guidelines and thus maintain the functional separation contemplated by I. Self-Regulatory Organization’s the rule. Statement of the Terms of Substance of Recent changes among the specialist the Proposed Rule Change firms, including the recent decisions by The Exchange is proposing to amend Van der Moolen Specialists USA, LLC the NYSE Rule 98 Guidelines for and SIG Specialists, Inc. to close their Approved Persons Associated with a respective specialist businesses at the Specialist’s Member Organization Exchange,6 have warranted the need for (‘‘Rule 98 Guidelines’’) to provide NYSE greater flexibility to permit new firms to Regulation, Inc. (‘‘NYSE Regulation’’) qualify as specialist member with the authority to grant a prospective organizations. NYSE Rule 98, which specialist member organization a requires certain barriers between a temporary exemption from section (b)(i) specialist member organization and an of the NYSE Rule 98 Guidelines. The approved person, has the potential to text of the proposed rule change is impede the approval process for a available at http://www/nyse.com, NYSE prospective specialist firm. In and the Commission’s Public Reference particular, because of the time delay Room. necessary for an NYSE member organization to form a separate NYSE II. Self-Regulatory Organization’s member organization from which to run Statement of the Purpose of, and a specialist business, the requirement to Statutory Basis for, the Proposed Rule maintain a separate and distinct Change organization could impact the ability of In its filing with the Commission, the a current member organization to Exchange included statements expeditiously begin operating as a concerning the purpose of and basis for specialist organization. the proposed rule change. The text of The NYSE is in the process of these statements may be examined at reviewing Rule 98 and, in particular, the places specified in Item IV below. whether revising the Rule 98 Guidelines The Exchange has prepared summaries, would provide sufficient protection to set forth in sections A, B, and C below, meet the stated goals of Rule 98. of the most significant aspects of such Nevertheless, the NYSE is not seeking to statements. amend Rule 98 comprehensively at this time. Rather, pending further review by A. Self-Regulatory Organization’s Statement of the Purpose of, and the NYSE of the continued applicability Statutory Basis for, the Proposed Rule of Rule 98 in its current form, the NYSE Change proposes to grant NYSE Regulation exemptive authority to allow 1. Purpose prospective specialist firms and their For purposes of seeking NYSE Rule 98 approved persons to temporarily operate exemptive relief, the NYSE is proposing without having to be separate and to amend the Rule 98 Guidelines to distinct organizations. The NYSE allow NYSE Regulation 5 to grant proposes granting this exemptive prospective specialist firms with a authority to expedite the process for temporary exemption from section (b)(i) new entrants to apply for and be of such guidelines, which currently approved as specialist organizations at require a specialist member organization the NYSE. and its approved person be separate and The NYSE notes that prospective distinct organizations. The Exchange specialist organizations and their has consistently interpreted this approved persons would continue to be provision to require that the specialist subject to sections (b)(ii) through (b)(x) and the approved person be in separate, of the Rule 98 Guidelines, which set Exchange. The Exchange has filed the proposal pursuant to section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) 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. 3 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 5 Rule 98(b) requires an approved person seeking a Rule 98 exemption to obtain the prior written agreement of the Exchange. Pursuant to a Delegation Agreement, the Exchange has delegated to NYSE Regulation the authority to review and approve such Rule 98 exemption requests. 4 17 PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 6 See Press Release, NYSE, NYSE to Reallocate Certain Specialist Rights to Kellogg Specialist Group (Nov. 14, 2007), available at http:// www.nyse.com/press/1195039877990.html; Press Release, Van der Moolen, Van der Moolen to terminate U.S. specialist activities (Nov. 15, 2007), available at http://www.vandermoolen.com/ ?sid=17&press=151. E:\FR\FM\11DEN1.SGM 11DEN1

Agencies

[Federal Register Volume 72, Number 237 (Tuesday, December 11, 2007)]
[Notices]
[Pages 70362-70363]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-23921]



[[Page 70362]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56894; File No. SR-NYSE-2007-107]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to 
the Exchange's NYSE BondsSM System and Trade Execution Fees

December 4, 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 November 27, 2007, the New York Stock Exchange LLC (``NYSE'' or the 
``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 
NYSE. 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.
---------------------------------------------------------------------------

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

    The Exchange proposes to implement a four-month pilot program, 
effective December 1, 2007, that will issue liquidity providers a $20 
credit for certain bond trades executed on the NYSE BondsSM 
system (``NYSE Bonds'') with an execution size of less than 20 bonds. 
This pilot program will terminate on the close of business March 31, 
2008, and will apply to all orders. The text of the proposed rule 
change is available at the Exchange's principal office, in the 
Commission's Public Reference Room, and at 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, 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. NYSE 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 implement a four-month pilot program 
pursuant to which it will issue liquidity providers a $20 credit for 
every execution on NYSE Bonds that is less than 20 bonds. This pilot 
program will commence on December 1, 2007 and will terminate at the 
close of business March 31, 2008.
    A liquidity provider is one who posts liquidity to the system. 
During the course of clearing their bond trades, liquidity providers 
absorb clearing costs. To offset these clearing costs, liquidity 
providers may increase the offer price or decrease the bid price of the 
bond. In doing so, the best execution of a bond order may be 
compromised as clearing costs increase with smaller orders.
    Accordingly, the Exchange proposes that liquidity providers be 
issued a $20 credit for executions of bond orders with an execution 
size of less than 20 bonds. For a liquidity provider to be eligible to 
receive this $20 credit, the original order posted by the liquidity 
provider must be for 20 bonds or more. For example, if a liquidity 
provider posts an order for 100 bonds and a contra side order comes in 
for 50 bonds, the liquidity provider will not receive a $20 credit. 
However, if a contra side order comes in for 10 bonds against the 
liquidity provider's original posted order of 100 bonds, the liquidity 
provider will receive a credit of $20 for that execution from the 
Exchange.
    NYSE Bonds, which was implemented in March 2007, will continue to 
update its functionality to provide competitive bond trading for 
customers. The Exchange believes that this $20 credit will incentivize 
the liquidity provider to display the best price available on NYSE 
Bonds.
2. Statutory Basis
    NYSE believes that the proposed rule change is consistent with the 
provisions of Section 6 of the Act,\3\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act \4\ 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.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f.
    \4\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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

    NYSE does not believe that the proposed rule change will impose any 
burden on competition that is not necessary or appropriate in 
furtherance of 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

    Because the foregoing rule change establishes or changes a due, 
fee, or other charge imposed by the Exchange, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act \5\ and subparagraph (f)(2) 
of Rule 19b-4 thereunder.\6\ 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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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 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-NYSE-2007-107 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-2007-107. 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

[[Page 70363]]

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. 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-2007-107 and should be submitted on or before January 2, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.7
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    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-23921 Filed 12-10-07; 8:45 am]
BILLING CODE 8011-01-P