[Federal Register Volume 75, Number 239 (Tuesday, December 14, 2010)]
[Notices]
[Pages 77928-77930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-31289]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63471; File No. SR-NYSEArca-2010-108]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NYSE Arca, Inc. Amending Its
Fee Schedule
December 8, 2010.
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 December 1, 2010, 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 and II
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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its Fee Schedule (the ``Schedule'').
While changes to the Schedule pursuant to this proposal will be
effective on filing, the changes will become operative on December 1,
2010. The text of the proposed rule change is available at the
Exchange's principal office, on the Commission's Web site at http://www.sec.gov, at the Commission's Public Reference Room, and the
Exchange's Web site 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,
[[Page 77929]]
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
The purpose of this filing is to amend the Schedule to cap
transaction fees for Firm Proprietary trades executed in open outcry
(manual trades) at $75,000 per month. The proposed cap will become
operative on December 1, 2010.
The proposed fees will only apply to OTP Holder transactions marked
with account origin code ``F'', and will not include Royalty Fees,
which are pass-through fees whose purpose is to cover payments that
must be made by the Exchange without respect to any cap, and Strategy
Executions, which are subject to a separate daily cap. Execution of
orders on behalf of Joint Back Office (``JBO'') participants will not
be included in the monthly cap on fees because the Exchange is unable
to differentiate orders of a JBO participant from orders of its
clearing broker-dealer, and is therefore unable to aggregate the JBO
participant's orders.\3\
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\3\ The proposed exclusion of JBO volumes from the $75,000 cap
is similar to the provision in footnote 11 of the Chicago Board
Options Exchange's rate schedule that excludes JBO participants from
participating in the benefits associated with certain sliding scale
rates.
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The proposed fee cap is similar to a monthly cap previously adopted
by NASDAQ OMX PHLX, Inc. (``PHLX'') that is currently applicable to all
firm proprietary orders on that exchange, and which also excludes
orders of JBO participants. In a rule filing last year, PHLX increased
that cap to $75,000 per month per firm, which is the same level as the
Exchange's proposed cap.\4\
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\4\ See Securities Exchange Act Release No. 59393 (February 11,
2009), 74 FR 7721 (February 19, 2009) (File No. SR-PHLX-2009-12).
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The Exchange believes the proposed cap on Firm transaction fees
will help attract participants to direct proprietary orders for
execution on the Trading Floor of the Exchange.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Securities Exchange Act of 1934
(the ``Act''),\5\ in general, and Section 6(b)(4) of the Act,\6\ 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 proposed change to
the Schedule is part of the Exchange's continued effort to attract and
enhance participation on the Exchange by offering competitive rates for
certain transactions on the Exchange. The proposed changes to the
Schedule are equitable in that they apply uniformly to all similarly
situated OTP Holders. The Exchange also believes that the proposed
monthly fee cap is equitable, even though it is not available to JBO
participants, because the Exchange intends to compete for non-JBO firm
business with the CBOE, which excludes JBO participants from its
sliding scale for the same reason as the Exchange, which is that each
is unable to identify these orders from a billing standpoint to bill
them correctly.\7\
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4).
\7\ See supra note 4 [sic].
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In addition, the Exchange believes that the proposed monthly fee
cap, which applies only to manual Firm Proprietary trades, is not
unfairly discriminatory to other market participants because its
purpose is to attract large block order flow to the floor of the
Exchange where such orders can be better handled in comparison with
electronic orders that are not negotiable. To the extent that this
purpose is achieved, all of the Exchange's market participants should
benefit from the improved market liquidity.
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) \8\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \9\ thereunder, because it establishes a due, fee, or other charge
imposed by NYSE Arca on its members.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(2).
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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.
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 [email protected]. Please include
File Number SR-NYSEArca-2010-108 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-2010-108. 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-
[[Page 77930]]
NYSEArca-2010-108 and should be submitted on or before January 4, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31289 Filed 12-13-10; 8:45 am]
BILLING CODE 8011-01-P