Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services To Establish a Gross FOCUS Revenue Fee, 33795-33797 [2011-14232]

Download as PDF Federal Register / Vol. 76, No. 111 / Thursday, June 9, 2011 / Notices the ability to address these noncompatibility issues without having to formally remove an order type from its rules. And as previously noted, the proposed process of determining order eligibility for purposes of the CHX Matching System is consistent with CBOE’s rules that address order eligibility on its systems. Lastly, the Exchange will also provide sufficient notice of any change in order eligibility through the issuance of a regulatory circular and such notification will be done in a manner which will provide reasonable advance notice to its market participants. 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 Regarding the Proposed Rule Change Received From Members, Participants or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and, by its terms, does not 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) of the Act 12 and Rule 19b– 4(f)(6) thereunder.13 The Exchange has requested that the Commission waive the 30-day operative delay. The Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest because the proposal is similar to the rules of another exchange that have been approved by the Commission,14 and will allow the Exchange to address order compatibility before it implements changes to its routing system. Therefore, mstockstill on DSK4VPTVN1PROD with NOTICES 12 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange’s intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied the five-day prefiling requirement. 14 See supra note 6. 13 17 VerDate Mar<15>2010 17:56 Jun 08, 2011 Jkt 223001 33795 the Commission designates the proposal operative upon filing.15 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend 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. 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–CHX– 2011–10 and should be submitted on or before June 30, 2011. IV. Solicitation of Comments For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Cathy H. Ahn, Deputy Secretary. 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–CHX–2011–10 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–CHX–2011–10. 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 Web site viewing and printing 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 15 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 [FR Doc. 2011–14228 Filed 6–8–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64595; File No. SR– NYSEArca–2011–32] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services To Establish a Gross FOCUS Revenue Fee June 3, 2011. 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, 2011, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange through its whollyowned subsidiary NYSE Arca Equities, Inc. (‘‘NYSE Arca Equities’’) proposes to amend the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services (the ‘‘Schedule’’) to establish a new regulatory fee. While changes to the Schedule pursuant to this proposal will be effective on filing, the changes will become operative on June 1, 2011. The text of the proposed rule change is available at the Exchange, at the Commission’s Public Reference 16 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\09JNN1.SGM 09JNN1 33796 Federal Register / Vol. 76, No. 111 / Thursday, June 9, 2011 / Notices Room, on the Commission’s Web site at http://www.sec.gov, 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, the self-regulatory organization 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 those 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 parts of such statements. mstockstill on DSK4VPTVN1PROD with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Effective June 1, 2011, the Exchange proposes to amend the Schedule to establish a regulatory fee (‘‘Gross FOCUS Revenue Fee’’) to be charged to ETP Holders, the purpose of which is to recover the regulatory expenses of the Exchange with respect to ETP Holders, including expenses associated with the regulatory functions performed both by NYSE Regulation, Inc. (‘‘NYSE Regulation’’) and by the Financial Industry Regulatory Authority (‘‘FINRA’’) pursuant to a regulatory services agreement, for which FINRA is paid by NYSE Regulation. The Exchange is proposing to set this regulatory fee at a rate of $0.07 per $1,000 of gross revenues as reported by each ETP Holder in its FOCUS report.3 The fee would be similar to the gross revenue FOCUS Report fee that the New York Stock Exchange (‘‘NYSE’’) charges its member organizations to partially recover its expenses for performance of regulatory functions.4 However, the rate will be lower than the $0.105 per $1,000 of FOCUS gross revenues charged by the NYSE, reflecting the fact that the costs of regulating the electronic NYSE Arca market are less than the costs of regulating the NYSE with its trading floor. Moving to a regulatory fee based on FOCUS gross revenues would align the Exchange’s equity regulatory fee structure more closely with that of the NYSE. The Exchange believes that the 3 FOCUS (Securities Exchange Act Form X–17A– 5) is an acronym for Financial and Operational Combined Uniform Single Report. The report is filed periodically with the Commission pursuant to Securities Exchange Act Rule 17a–5. 4 See NYSE Rule 129 (Oversight Services). VerDate Mar<15>2010 17:56 Jun 08, 2011 Jkt 223001 revenue generated from this new regulatory fee, when combined with the Exchange’s other regulatory fees with respect to ETP Holders, will be less than or equal to the Exchange’s related regulatory costs. Prior to the initiation of the new Gross FOCUS Revenue Fee on June 1, the Exchange has eliminated, by means of a separate rule filing,5 the fees assessed on ETP Holders, OTP Holders and OTP Firms 6 that conduct equities and/or options business on the Exchange and that register financial advisors (or registered representatives) (‘‘RR Fees’’). Each RR Fee was a fixed amount of money that an ETP Holder, OTP Holder or OTP Firm paid to the Exchange for each registered representative that it registered, and it was based on the action associated with the registration. The Exchange has eliminated the RR Fees because it believes that such fees are no longer the most equitable manner in which to assess regulatory fees. Among other things, sales practice regulation has been allocated to FINRA pursuant to a 17d–2 plan, so tying the Exchange’s regulatory fees to the number of registered representatives does not match regulatory revenues to regulatory expenses. The Exchange’s regulatory costs are primarily driven by market regulation. Consequently, a fee based on trading activity, such as the proposed Gross FOCUS Revenue Fee, will better match such revenues and 5 See Securities Exchange Act Release No. 64399 (May 4, 2011), 76 FR 27114 (May 10, 2011) (File No. SR–NYSEArca–2011–20) (the ‘‘Options Regulatory Fee Filing’’). 6 The term ‘‘ETP Holder’’ refers to a sole proprietorship, partnership, corporation, limited liability company or other organization in good standing that has been issued an Equity Trading Permit (‘‘ETP’’) by NYSE Arca Equities for effecting approved securities transactions on the trading facilities of NYSE Arca Equities. See NYSE Arca Equities Rule 1.1(n). The term ‘‘OTP Holder’’ refers to a natural person, in good standing, who has been issued an Options Trading Permit (‘‘OTP’’) by the Exchange for effecting approved securities transactions on the trading facilities of the Exchange, or has been named as a nominee. See Exchange Rule 1.1(q). The term ‘‘OTP Firm’’ refers to a sole proprietorship, partnership, corporation, limited liability company or other organization in good standing that holds an OTP or upon whom an individual OTP Holder has conferred trading privileges on the Exchange’s trading facilities pursuant to and in compliance with the rules of the Exchange. See Exchange Rule 1.1(r). Each ETP Holder, OTP Holder and OTP Firm has status as a ‘‘member’’ of the Exchange as that term is defined in Section 3 of the Act. An ETP Holder or an OTP Firm must be a registered broker or dealer pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the ‘‘Act’’). An OTP Holder must be a registered broker or dealer pursuant to Section 15 of the Act, or a nominee or an associated person of a registered broker or dealer that has been approved by the Exchange to conduct business on the trading facilities of the Exchange. PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 expenses.7 The Exchange believes that the proposed Gross FOCUS Revenue Fee represents the best alternative for replacing the revenue dedicated to covering the costs of the Exchange’s regulatory programs with respect to ETP Holders and the equities business of the Exchange that was lost with the elimination of the RR Fees. The Exchange believes that the realigned regulatory fee structure as proposed herein will allow the Exchange to continue to adequately fund the expenses associated with the performance of its regulatory functions with respect to ETP Holders and the equities business of the Exchange. The Exchange will monitor the amount of revenue collected from the Gross FOCUS Revenue Fee to ensure that it, in combination with its other regulatory fees and fines, does not exceed regulatory costs. The Exchange expects to monitor regulatory costs and revenues on an annual basis, at a minimum. If the Exchange determines that regulatory revenues exceed regulatory costs, the Exchange would adjust the Gross FOCUS Revenue Fee downward by submitting a fee change filing to the Commission. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,8 in general, and Section 6(b)(4) of the Act,9 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. The Exchange believes that the proposal does not constitute an inequitable allocation of fees, as all similarly situated member organizations will be subject to the same fee structure, and access to the Exchange’s market is offered on fair and non-discriminatory terms. More specifically, the Exchange believes that the proposed Gross FOCUS Revenue Fee represents a fairer and more equitable allocation of fees than the current fee structure because it would be charged to all members on revenues generated by their equity business instead of how many registered persons a particular ETP Holder employs. The latter standard has become increasingly irrelevant as a measure of regulatory services required due, among other reasons, to the rise of Internet and discount brokerage firms in comparison 7 See the Options Regulatory Fee Filing for a more complete analysis of the rationale for eliminating RR Fees. 8 15 U.S.C. 78f. 9 15 U.S.C. 78f(b)(4). E:\FR\FM\09JNN1.SGM 09JNN1 Federal Register / Vol. 76, No. 111 / Thursday, June 9, 2011 / Notices to traditional brokerage firms. The Exchange believes the proposed Gross FOCUS Revenue Fee is reasonable because it will raise revenue related to the amount of equity business conducted, which correlates more closely with the amount of Exchange regulatory services required. The Exchange further believes that the initial level of the Gross FOCUS Revenue Fee is reasonable because it is expected to generate revenues that, when combined with the Exchange’s other regulatory fees with respect to ETP Holders, will be less than or equal to the Exchange’s costs related to the regulation of its equities business. This is consistent with the Commission’s previously stated view that regulatory fees be used for regulatory purposes and not to support the Exchange’s business side. 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 No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) 10 of the Act and subparagraph (f)(2) of Rule 19b–4 11 thereunder, because it establishes a due, fee, or other charge imposed by NYSE Arca. At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend 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. mstockstill on DSK4VPTVN1PROD with NOTICES 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: SECURITIES AND EXCHANGE COMMISSION 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–2011–32 on the subject line. [Release No. 34–64596; File No. SR– NYSEArca–2011–36] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Fee Schedule To Adopt a Fee for Qualified Contingent Cross Trades June 3, 2011. Paper Comments 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 1, 2011, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the All submissions should refer to File ‘‘Commission’’) the proposed rule Number SR–NYSEArca–2011–32. This change as described in Items I, II, and file number should be included on the III below, which Items have been subject line if e-mail is used. To help the prepared by the self-regulatory Commission process and review your organization. The Commission is comments more efficiently, please use publishing this notice to solicit only one method. The Commission will comments on the proposed rule change post all comments on the Commission’s from interested persons. Internet Web site (http://www.sec.gov/ I. Self-Regulatory Organization’s rules/sro.shtml). Copies of the Statement of the Terms of Substance of submission, all subsequent the Proposed Rule Change amendments, all written statements with respect to the proposed rule The Exchange proposes to amend its change that are filed with the Fee Schedule (‘‘Schedule’’) to adopt a fee Commission, and all written for Qualified Contingent Cross (‘‘QCC’’) trades. The proposed change will be communications relating to the effective on June 1, 2011. The text of the proposed rule change between the Commission and any person, other than proposed rule change is available at the Exchange, the Commission’s Public those that may be withheld from the Reference Room, and http:// public in accordance with the www.nyse.com. provisions of 5 U.S.C. 552, will be available for Web site viewing and II. Self-Regulatory Organization’s printing in the Commission’s Public Statement of the Purpose of, and Reference Room, 100 F Street, NE., Statutory Basis for, the Proposed Rule Washington, DC 20549, on official Change business days between the hours of 10 In its filing with the Commission, the a.m. and 3 p.m. Copies of the filing also self-regulatory organization included will be available for inspection and statements concerning the purpose of, copying at the principal office of the and basis for, the proposed rule change Exchange. All comments received will and discussed any comments it received be posted without change; the on the proposed rule change. The text Commission does not edit personal of those statements may be examined at identifying information from the places specified in Item IV below. submissions. You should submit only The Exchange has prepared summaries, information that you wish to make set forth in sections A, B, and C below, available publicly. All submissions of the most significant parts of such should refer to File Number SR– statements. NYSEArca–2011–32 and should be submitted on or before June 30, 2011. A. Self-Regulatory Organization’s Statement of the Purpose of, and For the Commission, by the Division of Statutory Basis for, the Proposed Rule Trading and Markets, pursuant to delegated Change authority.12 • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–14232 Filed 6–8–11; 8:45 am] 1. Purpose NYSE Arca proposes to amend the Schedule to adopt a fee for QCC trades. BILLING CODE 8011–01–P U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b–4(f)(2). 10 15 VerDate Mar<15>2010 17:56 Jun 08, 2011 1 15 12 17 Jkt 223001 33797 PO 00000 CFR 200.30–3(a)(12). Frm 00098 Fmt 4703 Sfmt 4703 2 17 E:\FR\FM\09JNN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 09JNN1

Agencies

[Federal Register Volume 76, Number 111 (Thursday, June 9, 2011)]
[Notices]
[Pages 33795-33797]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-14232]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64595; File No. SR-NYSEArca-2011-32]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE 
Arca Equities Schedule of Fees and Charges for Exchange Services To 
Establish a Gross FOCUS Revenue Fee

June 3, 2011.
    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, 2011, NYSE Arca, Inc. (``NYSE Arca'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \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 through its wholly-owned subsidiary NYSE Arca 
Equities, Inc. (``NYSE Arca Equities'') proposes to amend the NYSE Arca 
Equities Schedule of Fees and Charges for Exchange Services (the 
``Schedule'') to establish a new regulatory fee. While changes to the 
Schedule pursuant to this proposal will be effective on filing, the 
changes will become operative on June 1, 2011. The text of the proposed 
rule change is available at the Exchange, at the Commission's Public 
Reference

[[Page 33796]]

Room, on the Commission's Web site at http://www.sec.gov, 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, the self-regulatory organization 
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 those 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 parts of such statements.

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

1. Purpose
    Effective June 1, 2011, the Exchange proposes to amend the Schedule 
to establish a regulatory fee (``Gross FOCUS Revenue Fee'') to be 
charged to ETP Holders, the purpose of which is to recover the 
regulatory expenses of the Exchange with respect to ETP Holders, 
including expenses associated with the regulatory functions performed 
both by NYSE Regulation, Inc. (``NYSE Regulation'') and by the 
Financial Industry Regulatory Authority (``FINRA'') pursuant to a 
regulatory services agreement, for which FINRA is paid by NYSE 
Regulation. The Exchange is proposing to set this regulatory fee at a 
rate of $0.07 per $1,000 of gross revenues as reported by each ETP 
Holder in its FOCUS report.\3\ The fee would be similar to the gross 
revenue FOCUS Report fee that the New York Stock Exchange (``NYSE'') 
charges its member organizations to partially recover its expenses for 
performance of regulatory functions.\4\ However, the rate will be lower 
than the $0.105 per $1,000 of FOCUS gross revenues charged by the NYSE, 
reflecting the fact that the costs of regulating the electronic NYSE 
Arca market are less than the costs of regulating the NYSE with its 
trading floor. Moving to a regulatory fee based on FOCUS gross revenues 
would align the Exchange's equity regulatory fee structure more closely 
with that of the NYSE. The Exchange believes that the revenue generated 
from this new regulatory fee, when combined with the Exchange's other 
regulatory fees with respect to ETP Holders, will be less than or equal 
to the Exchange's related regulatory costs.
---------------------------------------------------------------------------

    \3\ FOCUS (Securities Exchange Act Form X-17A-5) is an acronym 
for Financial and Operational Combined Uniform Single Report. The 
report is filed periodically with the Commission pursuant to 
Securities Exchange Act Rule 17a-5.
    \4\ See NYSE Rule 129 (Oversight Services).
---------------------------------------------------------------------------

    Prior to the initiation of the new Gross FOCUS Revenue Fee on June 
1, the Exchange has eliminated, by means of a separate rule filing,\5\ 
the fees assessed on ETP Holders, OTP Holders and OTP Firms \6\ that 
conduct equities and/or options business on the Exchange and that 
register financial advisors (or registered representatives) (``RR 
Fees''). Each RR Fee was a fixed amount of money that an ETP Holder, 
OTP Holder or OTP Firm paid to the Exchange for each registered 
representative that it registered, and it was based on the action 
associated with the registration. The Exchange has eliminated the RR 
Fees because it believes that such fees are no longer the most 
equitable manner in which to assess regulatory fees. Among other 
things, sales practice regulation has been allocated to FINRA pursuant 
to a 17d-2 plan, so tying the Exchange's regulatory fees to the number 
of registered representatives does not match regulatory revenues to 
regulatory expenses. The Exchange's regulatory costs are primarily 
driven by market regulation. Consequently, a fee based on trading 
activity, such as the proposed Gross FOCUS Revenue Fee, will better 
match such revenues and expenses.\7\ The Exchange believes that the 
proposed Gross FOCUS Revenue Fee represents the best alternative for 
replacing the revenue dedicated to covering the costs of the Exchange's 
regulatory programs with respect to ETP Holders and the equities 
business of the Exchange that was lost with the elimination of the RR 
Fees.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 64399 (May 4, 2011), 
76 FR 27114 (May 10, 2011) (File No. SR-NYSEArca-2011-20) (the 
``Options Regulatory Fee Filing'').
    \6\ The term ``ETP Holder'' refers to a sole proprietorship, 
partnership, corporation, limited liability company or other 
organization in good standing that has been issued an Equity Trading 
Permit (``ETP'') by NYSE Arca Equities for effecting approved 
securities transactions on the trading facilities of NYSE Arca 
Equities. See NYSE Arca Equities Rule 1.1(n).
    The term ``OTP Holder'' refers to a natural person, in good 
standing, who has been issued an Options Trading Permit (``OTP'') by 
the Exchange for effecting approved securities transactions on the 
trading facilities of the Exchange, or has been named as a nominee. 
See Exchange Rule 1.1(q).
    The term ``OTP Firm'' refers to a sole proprietorship, 
partnership, corporation, limited liability company or other 
organization in good standing that holds an OTP or upon whom an 
individual OTP Holder has conferred trading privileges on the 
Exchange's trading facilities pursuant to and in compliance with the 
rules of the Exchange. See Exchange Rule 1.1(r).
    Each ETP Holder, OTP Holder and OTP Firm has status as a 
``member'' of the Exchange as that term is defined in Section 3 of 
the Act. An ETP Holder or an OTP Firm must be a registered broker or 
dealer pursuant to Section 15 of the Securities Exchange Act of 
1934, as amended (the ``Act''). An OTP Holder must be a registered 
broker or dealer pursuant to Section 15 of the Act, or a nominee or 
an associated person of a registered broker or dealer that has been 
approved by the Exchange to conduct business on the trading 
facilities of the Exchange.
    \7\ See the Options Regulatory Fee Filing for a more complete 
analysis of the rationale for eliminating RR Fees.
---------------------------------------------------------------------------

    The Exchange believes that the realigned regulatory fee structure 
as proposed herein will allow the Exchange to continue to adequately 
fund the expenses associated with the performance of its regulatory 
functions with respect to ETP Holders and the equities business of the 
Exchange. The Exchange will monitor the amount of revenue collected 
from the Gross FOCUS Revenue Fee to ensure that it, in combination with 
its other regulatory fees and fines, does not exceed regulatory costs. 
The Exchange expects to monitor regulatory costs and revenues on an 
annual basis, at a minimum. If the Exchange determines that regulatory 
revenues exceed regulatory costs, the Exchange would adjust the Gross 
FOCUS Revenue Fee downward by submitting a fee change filing to the 
Commission.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\8\ in general, and Section 
6(b)(4) of the Act,\9\ in particular, in that it is designed to provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and other persons using its facilities. The 
Exchange believes that the proposal does not constitute an inequitable 
allocation of fees, as all similarly situated member organizations will 
be subject to the same fee structure, and access to the Exchange's 
market is offered on fair and non-discriminatory terms. More 
specifically, the Exchange believes that the proposed Gross FOCUS 
Revenue Fee represents a fairer and more equitable allocation of fees 
than the current fee structure because it would be charged to all 
members on revenues generated by their equity business instead of how 
many registered persons a particular ETP Holder employs. The latter 
standard has become increasingly irrelevant as a measure of regulatory 
services required due, among other reasons, to the rise of Internet and 
discount brokerage firms in comparison

[[Page 33797]]

to traditional brokerage firms. The Exchange believes the proposed 
Gross FOCUS Revenue Fee is reasonable because it will raise revenue 
related to the amount of equity business conducted, which correlates 
more closely with the amount of Exchange regulatory services required.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange further believes that the initial level of the Gross 
FOCUS Revenue Fee is reasonable because it is expected to generate 
revenues that, when combined with the Exchange's other regulatory fees 
with respect to ETP Holders, will be less than or equal to the 
Exchange's costs related to the regulation of its equities business. 
This is consistent with the Commission's previously stated view that 
regulatory fees be used for regulatory purposes and not to support the 
Exchange's business side.

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

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \10\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \11\ thereunder, because it establishes a due, fee, or other 
charge imposed by NYSE Arca.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend 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 rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2011-32 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2011-32. 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 Web site 
viewing and printing 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 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-2011-32 and should be submitted on or before June 30, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-14232 Filed 6-8-11; 8:45 am]
BILLING CODE 8011-01-P