Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Schedule of Fees and Charges for Exchange Services To Add a Credit That Applies to Indications of Interest That Result in Routed and Executed Orders, 50389-50390 [E8-19743]

Download as PDF Federal Register / Vol. 73, No. 166 / Tuesday, August 26, 2008 / Notices SECURITIES AND EXCHANGE COMMISSION Release No. 34–58397; File No. SR– NYSEArca–2008–83] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the Schedule of Fees and Charges for Exchange Services To Add a Credit That Applies to Indications of Interest That Result in Routed and Executed Orders August 20, 2008. 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 August 4, 2008, NYSE Arca, Inc. (the ‘‘Exchange’’), through its wholly-owned subsidiary NYSE Arca Equities, Inc. (‘‘NYSE Arca Equities’’), 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 Exchange has designated this proposal as one establishing or changing a due, fee, credit, 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 proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. sroberts on PROD1PC76 with NOTICES 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 add a new credit to the Schedule of Fees and Charges for Exchange Services (the ‘‘Schedule’’) that applies to indications of interest (‘‘IOIs’’) submitted by ETP Holders 5 that result in routed and executed orders. While changes to the Schedule pursuant to this proposal will be effective upon filing, the credit will be applied retroactively to August 1, 2008. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the Exchange’s Office of the Corporate Secretary, and at the Commission. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 5 See NYSE Arca Equities Rule 1.1(n). 2 17 VerDate Aug<31>2005 00:53 Aug 26, 2008 Jkt 214001 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 self-regulatory organization 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 In an effort to enhance participation on the Exchange and to offer increased liquidity to its Users,6 the Exchange proposes to add a new credit to the Schedule concerning orders routed and executed based on the Exchange’s receipt of IOIs. The proposal establishes two volume-based tiers. Tier 1 offers ETP Holders a credit of $0.10 per 100 shares where: (1) The ETP Holder submits an IOI to the Exchange; (2) the Exchange routes an order to access the ETP Holder’s un-displayed liquidity in response to the IOI; and (3) those routed orders are executed by the ETP Holder with an average daily IOI-related share volume per month greater than 5 million shares. Tier 2 offers ETP Holders a credit of $0.05 per 100 shares where: (1) The ETP Holder submits an IOI to the Exchange; (2) the Exchange routes an order to access the ETP Holder’s un-displayed liquidity in response to the IOI; and (3) those routed orders are executed by the ETP Holder with an average daily IOI-related share volume per month between 2.5 million and 5 million shares. The proposed IOI tiers and credits apply to volume aggregated across Tape A, Tape B, and Tape C securities.7 IOIs are non-displayed indications of symbol, size and side, which do not interact with the NYSE Arca Book.8 At 6 See NYSE Arca Equities Rule 1.1(yy). activity on days when the market closes early does not count toward volume tiers. 8 Regarding IOIs, the Commission notes its previous statement that, ‘‘the term ‘order’ is defined as ‘any firm indication of a willingness to buy or sell a security. * * *’ Whether or not an indication of interest is ‘firm’ will depend on what actually takes place between the buyer and seller. The label put on an order—‘firm’ or ‘not firm’—is not dispositive. For example, a system claiming it displays only ‘indications of interest’ that are not orders, may be [displaying orders] if these 7 Trade PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 50389 their discretion, participating ETP Holders may send an IOI to the Exchange, which in turn will consider the IOI when determining potential destinations for outbound routes. IOIs offer Exchange customers access to pools of liquidity that were previously inaccessible, thereby reducing market fragmentation. By introducing this tiered credit, the Exchange is enhancing the incentive to participate in the Exchange’s IOI program and provide additional liquidity to the marketplace. While changes to the Schedule pursuant to this proposal will be effective upon filing, the credit will be applied retroactively to August 1, 2008. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with Section 6(b) of Act,9 in general, and furthers the objectives of Section 6(b)(4),10 in particular, in that it is intended 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 the proposed credit is reasonable. The proposed rates are part of the Exchange’s effort to attract and enhance participation on the Exchange, by offering volume-based incentives. The Exchange also believes that the proposed changes to the Schedule are equitable in that they apply uniformly to our Users. 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 on the proposed rule change were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective upon filing pursuant to Section 19(b)(3)(A) of the Act 11 and Rule 19b–4(f)(2) 12 thereunder indications are, in fact, firm in practice. Securities Exchange Act Release No. 40780 (December 8, 1998), 63 FR 70844, 70850 (December 22, 1998) (quoting 17 CFR 240.3b–16(c)). 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(4). 11 15 U.S.C. 78s(b)(3)(A). 12 17 CFR 19b–4(f)(2). C:\FR\FM\26AUN1.SGM 26AUN1 50390 Federal Register / Vol. 73, No. 166 / Tuesday, August 26, 2008 / Notices because it establishes or changes a due, fee, or other charge imposed by the Exchange. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: sroberts on PROD1PC76 with NOTICES Electronic Comments • 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 No. SR–NYSEArca–2008–83 on the subject line. should refer to File No. SR–NYSEArca– 2008–83 and should be submitted on or before September 16, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Acting Secretary. [FR Doc. E8–19743 Filed 8–25–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58399; File No. SR– NYSEArca–2008–88] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Rule Change by NYSE Arca, Inc. To Eliminate the Requirement That Orders Sent Via the InterMarket Linkage System and Broker Dealer Orders Receive the Same Billing Treatment August 20, 2008. Pursuant to section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 Paper Comments notice is hereby given that, on August • Send paper comments in triplicate 13, 2008, NYSE Arca, Inc. (‘‘NYSE to Secretary, Securities and Exchange Arca’’ or the ‘‘Exchange’’) filed with the Commission, 100 F Street, NE., Securities and Exchange Commission Washington, DC 20549–1090. (the ‘‘Commission’’) the proposed rule All submissions should refer to File No. change as described in Items I, II, and SR–NYSEArca–2008–83. This file III below, which Items have been number should be included on the prepared by the self-regulatory subject line if e-mail is used. To help the organization. The Commission is Commission process and review your publishing this notice to solicit comments more efficiently, please use comments on the proposed rule change only one method. The Commission will from interested persons. post all comments on the Commission’s I. Self-Regulatory Organization’s Internet Web site (https://www.sec.gov/ Statement of the Terms of Substance of rules/sro.shtml). Copies of the the Proposed Rule Change submission, all subsequent amendments, all written statements The Exchange proposes to revise with respect to the proposed rule certain requirements pertaining to change that are filed with the Broker Dealer Transaction Fees. Commission, and all written II. Self-Regulatory Organization’s communications relating to the Statement of the Purpose of, and proposed rule change between the Commission and any person, other than Statutory Basis for, the Proposed Rule Change those that may be withheld from the public in accordance with the In its filing with the Commission, the provisions of 5 U.S.C. 552, will be self-regulatory organization included available for inspection and copying in statements concerning the purpose of, the Commission’s Public Reference and basis for, the proposed rule change Room, on official business days between and discussed any comments it received the hours of 10 a.m. and 3 p.m. Copies on the proposed rule change. The text of such filing also will be available for of those statements may be examined at inspection and copying at the principal the places specified in Item IV below. offices of the Exchange. All comments The Exchange has prepared summaries, received will be posted without change; set forth in sections A, B, and C below, the Commission does not edit personal identifying information from 13 17 CFR 200.30–3(a)(12). submissions. You should submit only 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. information that you wish to make 3 17 CFR 240.19b-4. available publicly. All submissions VerDate Aug<31>2005 00:53 Aug 26, 2008 Jkt 214001 PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose Presently, executions on NYSE Arca resulting from Linkage Orders are subject to the same billing treatment as other Broker Dealer orders. Assessing the same fees for both Broker Dealer orders sent directly to the Exchange and Linkage Orders stems from prior approval orders that established the pilot program for Linkage Fees.4 The Exchange proposes to eliminate this requirement that Linkage Orders and Broker Dealer orders receive the same billing treatment. In doing so, the Exchange will have greater flexibility in designing and implementing fees within its Post/Take pricing model. By this filing, the Exchange is not otherwise amending or revising its schedule of fees. Any future amendment to the Exchange’s schedule of fees will be, of course, subject to a filing with the Commission.5 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,6 in general, and Section 6(b)(4) of the Act,7 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. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose 4 See Securities Exchange Act Release No. 47560 (March 21, 2003), 68 FR 15257 (March 28, 2003) (notice of filing of SR–PCX–2003–08). As approved by the Commission, the Exchange’s proposal to establish a pilot program for Linkage Fees noted that executions resulting from linkage orders will be subject to the same billing treatment as other broker-dealer executions. See Securities Exchange Act Release Nos. 47786 (May 2, 2003), 68 FR 24779 (May 8, 2003) (order approving proposal in SR– PCX–2003–08 to establish pilot program for Linkage Fees); 56133 (July 25, 2008 [sic]), 72 FR 42210 (August 1, 2007) (SR–NYSEArca–2007–66) (order approving extension of Linkage Fee pilot program through July 31, 2008); 58056 (June 30, 2008), 73 FR 38482 (July 7, 2008) (SR–NYSEArca–2008–67) (order approving extension of Linkage Fee pilot program through July 31, 2009). 5 While changes to the Exchange’s schedule of fees that apply to Exchange members may be submitted pursuant to section 19(b)(3)(A) of the Act and subparagraph (f)(2) of Rule 19b–4 thereunder, proposed changes that involve the pilot program for Linkage Fees must be submitted pursuant to section 19(b)(2) of the Act. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(4). C:\FR\FM\26AUN1.SGM 26AUN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 73, Number 166 (Tuesday, August 26, 2008)]
[Notices]
[Pages 50389-50390]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-19743]



[[Page 50389]]

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SECURITIES AND EXCHANGE COMMISSION

Release No. 34-58397; File No. SR-NYSEArca-2008-83]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the 
Schedule of Fees and Charges for Exchange Services To Add a Credit That 
Applies to Indications of Interest That Result in Routed and Executed 
Orders

August 20, 2008.
    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 August 4, 2008, NYSE Arca, Inc. (the ``Exchange''), through 
its wholly-owned subsidiary NYSE Arca Equities, Inc. (``NYSE Arca 
Equities''), 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 
Exchange has designated this proposal as one establishing or changing a 
due, fee, credit, 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 proposed rule change 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

    The Exchange, through its wholly-owned subsidiary NYSE Arca 
Equities, proposes to add a new credit to the Schedule of Fees and 
Charges for Exchange Services (the ``Schedule'') that applies to 
indications of interest (``IOIs'') submitted by ETP Holders \5\ that 
result in routed and executed orders. While changes to the Schedule 
pursuant to this proposal will be effective upon filing, the credit 
will be applied retroactively to August 1, 2008. The text of the 
proposed rule change is available on the Exchange's Web site at 
www.nyse.com, at the Exchange's Office of the Corporate Secretary, and 
at the Commission.
---------------------------------------------------------------------------

    \5\ See NYSE Arca Equities Rule 1.1(n).
---------------------------------------------------------------------------

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 self-regulatory organization 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
    In an effort to enhance participation on the Exchange and to offer 
increased liquidity to its Users,\6\ the Exchange proposes to add a new 
credit to the Schedule concerning orders routed and executed based on 
the Exchange's receipt of IOIs. The proposal establishes two volume-
based tiers. Tier 1 offers ETP Holders a credit of $0.10 per 100 shares 
where: (1) The ETP Holder submits an IOI to the Exchange; (2) the 
Exchange routes an order to access the ETP Holder's un-displayed 
liquidity in response to the IOI; and (3) those routed orders are 
executed by the ETP Holder with an average daily IOI-related share 
volume per month greater than 5 million shares. Tier 2 offers ETP 
Holders a credit of $0.05 per 100 shares where: (1) The ETP Holder 
submits an IOI to the Exchange; (2) the Exchange routes an order to 
access the ETP Holder's un-displayed liquidity in response to the IOI; 
and (3) those routed orders are executed by the ETP Holder with an 
average daily IOI-related share volume per month between 2.5 million 
and 5 million shares. The proposed IOI tiers and credits apply to 
volume aggregated across Tape A, Tape B, and Tape C securities.\7\
---------------------------------------------------------------------------

    \6\ See NYSE Arca Equities Rule 1.1(yy).
    \7\ Trade activity on days when the market closes early does not 
count toward volume tiers.
---------------------------------------------------------------------------

    IOIs are non-displayed indications of symbol, size and side, which 
do not interact with the NYSE Arca Book.\8\ At their discretion, 
participating ETP Holders may send an IOI to the Exchange, which in 
turn will consider the IOI when determining potential destinations for 
outbound routes. IOIs offer Exchange customers access to pools of 
liquidity that were previously inaccessible, thereby reducing market 
fragmentation. By introducing this tiered credit, the Exchange is 
enhancing the incentive to participate in the Exchange's IOI program 
and provide additional liquidity to the marketplace.
---------------------------------------------------------------------------

    \8\ Regarding IOIs, the Commission notes its previous statement 
that, ``the term `order' is defined as `any firm indication of a 
willingness to buy or sell a security. * * *' Whether or not an 
indication of interest is `firm' will depend on what actually takes 
place between the buyer and seller. The label put on an order--
`firm' or `not firm'--is not dispositive. For example, a system 
claiming it displays only `indications of interest' that are not 
orders, may be [displaying orders] if these indications are, in 
fact, firm in practice. Securities Exchange Act Release No. 40780 
(December 8, 1998), 63 FR 70844, 70850 (December 22, 1998) (quoting 
17 CFR 240.3b-16(c)).
---------------------------------------------------------------------------

    While changes to the Schedule pursuant to this proposal will be 
effective upon filing, the credit will be applied retroactively to 
August 1, 2008.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of Act,\9\ in general, and furthers the objectives of 
Section 6(b)(4),\10\ in particular, in that it is intended 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 the proposed credit is reasonable. The proposed 
rates are part of the Exchange's effort to attract and enhance 
participation on the Exchange, by offering volume-based incentives. The 
Exchange also believes that the proposed changes to the Schedule are 
equitable in that they apply uniformly to our Users.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 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.

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

    Written comments on the proposed rule change were neither solicited 
nor received.

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

    The foregoing proposed rule change has become effective upon filing 
pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(2) 
\12\ thereunder

[[Page 50390]]

because it establishes or changes a due, fee, or other charge imposed 
by the Exchange. At any time within 60 days of the filing of the 
proposed rule change, the Commission may summarily abrogate such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 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 (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-NYSEArca-2008-83 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File No. SR-NYSEArca-2008-83. 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, 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 offices 
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 No. SR-
NYSEArca-2008-83 and should be submitted on or before September 16, 
2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Florence E. Harmon,
Acting Secretary.
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    \13\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E8-19743 Filed 8-25-08; 8:45 am]
BILLING CODE 8010-01-P

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