[Federal Register: December 21, 2009 (Volume 74, Number 243)]
[Notices]
[Page 67949-67950]
[DOCID:fr21de09-108]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Notice of Passenger Facility Charge (PFC) Approvals and
Disapprovals

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Monthly Notice of PFC Approvals and Disapprovals. In November
2009, there were two applications approved. This notice also includes
information on one application, approved in October 2009, inadvertently
left off the October 2009 notice. Additionally, five approved
amendments to previously approved applications are listed.

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SUMMARY: The FAA publishes a monthly notice, as appropriate, of PFC
approvals and disapprovals under the provisions of the Aviation Safety
and Capacity Expansion Act of 1990 (Title IX of the Omnibus Budget
Reconciliation Act of 1990) (Pub. L. 101-508) and Part 158 of the
Federal Aviation Regulations (14 CFR part 158). This notice is
published pursuant to paragraph d of Sec.  158.29.

PFC Applications Approved

    Public Agency: Port of Oakland, Oakland, California.
    Application Number: 09-14-C-00-OAK.
    Application Type: Impose and use a PFC.
    PFC Level: $4.50.
    Total PFC Revenue Approved in this Decision: $293,219,000.
    Earliest Charge Effective Date: March 1, 2011.
    Estimated Charge Expiration Date: April 1, 2021.
    Class of Air Carriers Not Required To Collect PFC's: Nonscheduled/
on-demand air carriers filing FAA Form 1800-31.
    Determination: Approved. Based on information contained in the
public agency's application, the FAA has determined that the approved
class accounts for less than 1 percent of the total annual enplanements
at Metropolitan Oakland International Airport.
    Brief Description of Projects Approved for Collection and Use at a
$4.50 PFC Level:

Terminal 1 rehabilitation and retrofit program.
Passenger boarding bridges.
Runway 11/29 light collar replacement.
East apron improvements, phases I and II.
East apron improvements, phase III.
Runway safety area improvements, phases I and II.
Rehabilitate taxiway B.
Rehabilitate taxiway W.
Security enhancements at terminal 2.
Security enhancements for taxiway B overpass.
Lighting control to a new air traffic control tower.
Aircraft rescue and firefighting vehicles.
Closed circuit television program expansion--phases II and Ill.

    Brief Description of Projects Approved for Collection and Use at a
$3.00 PFC Level:

Americans with Disabilities Act access improvements.
Terminal 2 roof replacement.
Perimeter airfield dike seismic enhancement study.
Airport security enhancements--security assessment study.
Noise monitoring system upgrade.
PFC administrative costs.
Owner-controlled insurance for terminal 2 improvements.

    Decision Date: October 23, 2009.

FOR FURTHER INFORMATION CONTACT: Gretchen Kelly, San Francisco Airports
District Office,<PHONE_NUMBER>, extension 623.
    Public Agency: Rhode Island Airport Corporation, Warwick, Rhode
Island.
    Application Number: 09-06-C-00-PVD.
    Application Type: Impose and use a PFC. PFC Level: $4.50.
    Total PFC Revenue Approved in this Decision: $15,832,980.
    Earliest Charge Effective Date: May 1, 2015.
    Estimated Charge Expiration Date: November 1, 2016.
    Class of Air Carriers Not Required To Collect PFC's:
    Air taxi/commercial operators.
    Determination: Approved. Based on information contained in the
public agency's application, the FAA has determined that the approved
class accounts for less than I percent of the total annual enplanements
at T. F. Green Airport.
    Brief Description of Projects Approved for Collection and Use at a
$4.50 PFC Level:

Acquire land for noise mitigation.
Extend, mark and light taxiway M.

    Brief Description of Projects Approved for Collection and Use at a
$3.00 PFC Level:

Final environmental impact statement.
Taxiway N rehabilitation.
PFC implementation and administration assistance.

    Decision Date: November 13, 2009.
    For Further Information Contact: Priscilla Scoff, New England
Region Airports Division,<PHONE_NUMBER>.
    Public Agency: Grand Forks Regional Airport Authority, Grand Forks,
North Dakota.
    Application Number: 10-08-C-00-GFK.
    Application Type: Impose and use a PFC.
    PFC Level: $4.50.
    Total PFC Revenue Approved in this Decision: $2,700,456.
    Earliest Charge Effective Date: February 1, 2010.
    Estimated Charge Expiration Date: August 1, 2017.
    Class of Air Carriers Not Required To Collect PFC's: Air taxi/
commercial operators filing FAA Form 1800-31.
    Determination: Approved. Based on information contained in the
public agency's application, the FAA has determined that the approved
class accounts for less than 1 percent of the total annual enplanements
at Grand Forks International Airport.
    Brief Description of Project Partially Approved for Collection and
Use: Construction of new passenger terminal building and air carrier
apron.
    Determination: Partially approved for collection and use. The FAA
determination that portions of the project were not PFC-eligible.
    Decision Date: November 19, 2009.
    For Further Information Contact: Thomas Schauer, Bismarck Airports
District Office,<PHONE_NUMBER>.

                                           Amendment to PFC Approvals
----------------------------------------------------------------------------------------------------------------
                                                                                Original         Amended
                                     Amendment       Original         Amended        estimated       estimated
   Amendment No., city, state      approved date   approved net    approved net     charge exp.     charge exp.
                                                    PFC revenue     PFC revenue        date            date
----------------------------------------------------------------------------------------------------------------
98-05-C-04-MEI, Meridian, MS....        10/30/09        $234,082        $231,037        09/01/02        09/01/02
99-06-C-03-MEI, Meridian, MS....        10/30/09         148,000         105,760        05/01/04        05/01/04
06-11-C-01-EYW, Key West, FL....        11/05/09      48,440,445      11,882,511        12/01/37        08/01/15
06-11-C-02-EYW, Key West, FL....        11/10/09       11,882,51      11,929,058        11/01/16        09/01/15
06-03-C-01-ABQ, Albuquerque, NM.        11/10/09      66,066,726      68,885,899        07/01/15        07/01/16
----------------------------------------------------------------------------------------------------------------

    Issued in Washington, DC, on December 11, 2009.
Joe Hebert,
Manager, Financial Analysis and Passenger Facility Charge Branch.
[FR Doc. E9-30206 Filed 12-18-09; 8:45 am]

BILLING CODE 4910-13-M


[Federal Register: January 12, 2009 (Volume 74, Number 7)]
[Notices]
[Page 1264-1266]
[DOCID:fr12ja09-120]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59200; File No. SR-CBOE-2008-125]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Related to Affiliations With Broker-Dealers

January 6, 2009.
    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 15, 2008, the Chicago Board Options Exchange, Incorporated
(``CBOE'' or ``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 prepared by the CBOE.
The Exchange has designated this proposal as one constituting a stated
policy, practice, or interpretation with respect to the meaning,
administration, or enforcement of an existing rule under Section
19(b)(3)(A)(i) of the Act,\3\ and Rule 19b-4(f)(1) \4\ thereunder,
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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(i).
    \4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange is seeking effectiveness of an interpretation of a
CBOE Constitution provision related to affiliations with broker-
dealers. The proposed rule change is available on CBOE's Web site
(http://www.cboe.org/legal), at the CBOE's Office of the Secretary, and
at the Commission's Public Reference Room.

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 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
    The Exchange is in the process of forming a wholly owned broker-
dealer subsidiary. With respect to the contemplated establishment of
the broker-dealer, the Exchange is seeking effectiveness of an
interpretation of a CBOE Constitution provision related to affiliations
with broker-dealers.
    In particular, the Exchange notes that Article VIII, Section 8.1(b)
of the CBOE Constitution provides in part that ``[n]o officer, other
than the Vice Chairman of the Board, shall be a member or affiliated
with a member or a broker or dealer in securities or commodities.'' \5\

The term ``affiliated with'' is not explicitly defined in the
Constitution, but that term, and the related definition of control, has
been defined in the Exchange Rules since 1973, the year the Exchange
was founded.\6\ The term ``affiliate'' or a person ``affiliated with''
another person is defined in the Exchange Rule 1.1(j) as, ``a person
who, directly or indirectly, controls, is controlled by, or is under
common control with, such other person.'' The term ``control'' is
defined in Exchange Rule 1.1(k) as ``the power to exercise a
controlling influence over the management or policies of a person,
unless such power is solely the result of an official position with
such person. Any person who owns beneficially, directly or indirectly,
more than 20% of the voting power in the election of directors of a
corporation, or more than 25% of the voting power in the election of
directors of any other corporation which directly or through one or
more affiliates owns beneficially more than 25% of the voting power in
the election of directors of such corporation, shall be presumed to
control such corporation.''
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    \5\ The Exchange notes that this provision of the Constitution
is proposed to be deleted as part of the Exchange's contemplated
demutualization and, upon its deletion, there would no longer be
such a restriction. See SR-CBOE-2008-88. The Exchange also notes
that other self-regulatory organizations do not have restrictions in
their rules preventing their respective officers from acting in an
official capacity with a broker-dealer affiliate. For example,
certain officers of the National Stock Exchange, Inc. (``NSX'') are
also officers and principals of NSX's subsidiary broker-dealer, NSX
Securities LLC.
    \6\ E-mail from Jennifer M. Lamie, Assistant General Counsel,
CBOE, to Richard Holley III, Senior Special Counsel, Division of
Trading and Markets, Commission, dated January 5, 2009 (adding the
preceding sentence to clarify the nature of the proposed
interpretation).
---------------------------------------------------------------------------

    The purpose of this rule filing is to seek effectiveness of an
Exchange interpretation that Section 8.1(b), by its terms, does not
apply to instances in which an Exchange officer acts solely in an
official position for a broker-dealer, consistent with the longstanding
definition and application of the term ``affiliated with'' in the
Exchange Rules.\7\ The essence of this interpretation is that if an
Exchange officer is not in a control relationship with a broker-dealer
subsidiary of the Exchange, the officer is not an ``affiliate'' of the
subsidiary even if the officer serves in an official position with the
subsidiary, and thus the Exchange officer's serving in an official
position of the subsidiary is not prohibited by Section 8.1(b) of the
Constitution. For example, the Exchange believes it would be
permissible and consistent with Section 8.1(b) for an Exchange officer
to be a director, officer, principal, or an employee of a broker-dealer
that is a wholly-owned subsidiary of the Exchange.
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    \7\ Id.
---------------------------------------------------------------------------

    The Exchange notes that until it demutualizes it only intends to
utilize the interpretation to permit Exchange officers to act in an
official position with the wholly-owned broker-dealer subsidiary in
accordance with Section 8.1(b) and to form the broker-dealer. The
Exchange represents that the broker-dealer will not perform any
operations without first discussing with the Commission staff whether
any of the broker-dealer's operations should be subject to an Exchange
rule filing required under the Act.\8\ These Exchange also notes that
there are other protections in place that limit the potential conflicts
between the Exchange as a self-regulator and broker-dealers, including,
among other things, the existence of a Regulatory Oversight Committee
as a committee of the CBOE Board of Directors that consists solely of
public directors.
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    \8\ 15 U.S.C. 78s(b)(1). In particular, the Exchange represents
that it will not commence operations for such broker-dealer prior to
an effective rule filing with the Commission setting forth the
manner in which the broker-dealer would operate. E-mail from
Jennifer M. Lamie, Assistant General Counsel, CBOE, to Richard
Holley III, Senior Special Counsel, Division of Trading and Markets,
Commission, dated January 5, 2009 (adding the preceding clarifying
text).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Act \9\ in general and furthers the objectives of
Section 6(b)(5) of the Act \10\ in particular in that it is designed to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
The proposed rule change is also consistent with the requirements of
Section 6(b)(1) of the Act,\11\ which requires that an exchange be so
organized so as to have the capacity to be able to carry out the
purposes of the Act and to comply, and (subject to any rule or order of
the Commission pursuant to Section 17(d) \12\ or 19(g)(2) \13\ of the
Act) to enforce compliance by its members and persons associated with
its members, with the provisions of the Act, the rules and regulations
thereunder and the rules of the Exchange. This rule change is designed
to clarify the meaning and scope of CBOE's Constitution and Rules
related to affiliations with broker-dealers.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ 15 U.S.C. 78f(b)(1).
    \12\ 15 U.S.C. 78q(d).
    \13\ 15 U.S.C. 78s(g)(2).
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B. Self-Regulatory Organization's Statement on Burden on Competition

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

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

    The Exchange neither received nor solicited written comments on the
proposal.

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

    The foregoing proposed rule change will take effect upon filing
with the Commission pursuant to Section 19(b)(3)(A)(i) of the Act \14\
and Rule 19b-4(f)(1) thereunder,\15\ because it constitutes a stated
policy, practice, or interpretation with respect to the meaning,
administration, or enforcement of an existing rule.
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    \14\ 15 U.S.C. 78s(b)(3)(A)(i).
    \15\ 17 CFR 240.19b-4(f)(1).
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    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<EMAIL_ADDRESS>Please include
File Number SR-CBOE-2008-125 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-CBOE-2008-125. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the CBOE. 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-CBOE-2008-125 and should be
submitted on or before February 2, 2009.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-350 Filed 1-9-09; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register: July 12, 2007 (Volume 72, Number 133)]
[Notices]
[Page 38110-38115]
[DOCID:fr12jy07-93]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56017; File No. SR-NYSE-2007-21]

Self-Regulatory Organizations; New York Stock Exchange LLC; Order
Granting Approval of Proposed Rule Change as Modified by Amendment No.
1 Thereto and Notice of Filing and Order Granting Accelerated Approval
to Amendment No. 3 Thereto Relating to Rule 92 (Limitations on Members'
Trading Because of Customers' Orders)

July 5, 2007.

I. Introduction

    On February 23, 2007, the New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend NYSE Rule 92, Limitations on Members'
Trading Because of Customers' Orders, in order to harmonize it with
similar rules of NASD and to address changes to the marketplace because
of the implementation of NYSE's Hybrid Market and Regulation NMS
(``Reg. NMS''). On May 22, 2007, NYSE filed Amendment No. 1 to the
proposed rule change. The proposed rule change was published for
comment in the Federal Register on May 31, 2007.\3\ The Commission
received two comment letters on the proposal.\4\ On July 3, 2007, NYSE
responded to the comments \5\ and, on July 5, 2007, filed Amendment No.

3 to the proposed rule change.\6\ This order approves the proposed rule
change, grants accelerated approval to Amendment No. 3, and solicits
comments from interested persons on Amendment No. 3.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 55804 (May 23,
2007), 72 FR 30410.
    \4\ See letters to Nancy M. Morris, Secretary, Commission, from
Ann Vlcek, Managing Director and Associate General Counsel,
Securities Industry and Financial Markets Association (``SIFMA''),
dated June 22, 2007 (``SIFMA Letter'') and from Bret Engelkemier,
Managing Director, Head of Equity Trading, Citigroup Global Markets
Inc., dated June 21, 2007 (``CGMI Letter'').
    \5\ See letter to Nancy M. Morris, Secretary, Commission, from
Mary Yeager, Assistant Secretary, NYSE, dated July 3, 2007 (``NYSE
Response'').
    \6\ The Exchange filed Amendment No. 2 on July 3, 2007 and
subsequently withdrew it on July 5, 2007.
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II. Description of the Proposal

Riskless Principal Transactions

    NYSE Rule 92 generally prohibits members or member organizations
from trading on a proprietary basis ahead of, or along with, customer
orders that are executable at the same price as the proprietary order.
Currently, the rule contains several exceptions that make it
permissible for a member or member organization to enter a proprietary
order while representing a customer order that could be executed at the
same price, so long as it is not for an account of an individual
investor and the customer has provided express permission (``Rule 92(b)
proprietary order'').\7\
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    \7\ In general, these are transactions in which the member or
member organization is: (1) Liquidating a position held in a
proprietary facilitation account and the customer's order is for
10,000 shares or more; (2) creating a bona fide hedge; (3) modifying
an existing hedge; or (4) engaging in a bona fide arbitrage or risk
arbitrage transaction.
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    The Exchange proposes to add a new subsection to Rule 92 that would
permit riskless transactions for the purpose of facilitating the
execution, on a riskless principal basis, of one or more customer
orders. The proposed rule defines a riskless principal transaction as
one in which a member or member organization, after having received one
or more orders to buy (sell) a security, purchases (sells) the security
as principal at the same price to satisfy the order(s) to buy (sell).
Under the proposed rule, the member would be required to give the
customer the same price it received, exclusive of any markup or
markdown, commission or commission equivalent, or other fee.
    The Exchange proposes adopting the underlying order requirements of
the NASD's Manning Rule \8\ for riskless principal transactions at the
Exchange. Accordingly, the Exchange proposes that a riskless principal
transaction can be effected on behalf of any customer order, regardless
of whether from an institutional account or an individual investor.
Further requirements for proposed riskless principal transactions
include that the receipt time reference for the underlying order would
have to be before the execution report time reference of the riskless
principal transaction. Within 60 seconds of receiving an execution
report from NYSE on the riskless principal transaction, members or
member organizations would be required to allocate to the accounts
represented in the riskless principal transaction the same price at
which the order was executed on NYSE, exclusive of any markup or
markdown, commission equivalent, or other fee. In addition, under the
proposed amendment, firms would be permitted to aggregate only orders
whose order types and instructions (including tick restrictions) permit
such aggregation.
---------------------------------------------------------------------------

    \8\ See NASD IM 2110-2 and Rule 2111.
---------------------------------------------------------------------------

    Firms would need to disclose to customers the method by which the
firm would allocate the shares bought or sold in the riskless principal
transaction (e.g., strict time priority, precedence based on size,
etc.), and would be required to allocate shares in accordance with that
method. Such method must be fair and reasonable, be consistently
applied, and not unfairly discriminate against any particular class of
accounts or types of orders. The Exchange would not require a specific
allocation methodology, but would require that the chosen method be
adequately disclosed to customers and be consistent with rules
governing parity of orders.
    The Exchange would require member organizations to keep certain
books and records in connection with riskless principal transactions.
In particular, when executing riskless principal transactions, firms
would be required to submit order execution reports to the Exchange's
Front End Systemic Capture (``FESC'') database linking the execution of
the riskless principal order on the Exchange to the specific underlying
orders. The information that would be provided must be sufficient for
both member firms and the Exchange to reconstruct in a time-sequenced
manner all orders, including allocations to the underlying orders, with
respect to which a member organization is claiming the riskless
principal exception.
    Similar to the Manning Rule, in allocating riskless principal
transactions, if the riskless principal transaction includes Rule 92(b)
proprietary orders, such proprietary orders must yield to orders from
customers that either have not or cannot consent (for example, an
individual investor with an order of less than 10,000 shares) (``non-
consenting customer'') and to orders from customers that have consented
to trade along with Rule 92(b) proprietary orders until the non-
consenting customers are filled. At that point, the Rule 92(b)
proprietary order can receive an allocation along side any remaining
customer orders that have consented to trade along with the Rule 92(b)
proprietary order. In allocating such orders, member organizations must
follow allocation methodologies that have been disclosed pursuant to
proposed Rules 92(b) and 92(c)(5).\9\
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    \9\ See Amendment No. 3.
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Customer Consent Under Rule 92(b)

    The Exchange proposes to modify the consent requirement of NYSE
Rule 92(b) to eliminate the current order-by-order consent requirement
and instead provide that customers may give ``blanket'' affirmative
written consent for a member firm to trade along provided that: (i) The
customer has received adequate prior affirmative notice of the fact
that the member or member organization may trade along with its orders,
including a disclosure of the method by which the member organization
will allocate shares to the customer's order and a disclosure relating
to the allocation methodology for riskless principal transactions that
include both a Rule 92(b) proprietary order and an order from a
customer that has not consented to trade along with a Rule 92(b)
proprietary order; (ii) the customer affirmatively consents prior to
such trading by the member or member organization; and (iii) the member
or member organization's trading along is permitted under one of the
exceptions contained in Rule 92.
    The Exchange proposes that member organizations can document such
affirmative consent either by: (i) A signed writing from the customer
that acknowledges the disclosures, including that a customer can opt-
out on an order-by-order basis, and provides consent; or (ii)
documenting consent that was provided orally, provided that written
disclosures were provided to the customer before obtaining the oral
consent and the member organization provides written notice to the
customer documenting that oral consent. Once a customer has provided
affirmative written consent and so long as firms continue to provide
written disclosures on a periodic basis, member organizations will not
need to renew such affirmative consent.
    The Exchange further proposes expanding the class of investors that
may consent to a Rule 92(b) proprietary order. In order to harmonize
Rule 92 with the Manning Rule, the Exchange proposes amending the class
of investors that can consent to a member or member organization
trading along with a customer order to include all institutional
investors, regardless of the

size of the order, and individual investors with orders of 10,000
shares or more, unless such orders are less than $100,000 in value. To
ensure consistency, the Exchange proposes to incorporate, for purposes
of Rule 92 only, NASD's definition of an ``institutional account,''
\10\ and therefore proposes adding that definition to the supplementary
material to Rule 92.
---------------------------------------------------------------------------

    \10\ See NASD Rule 3110(c)(4).
---------------------------------------------------------------------------

    Customers would retain the ability to ``opt-out'' on a trade-by-
trade basis or to modify the instructions obtained under blanket
consent, since the customer always has the option to submit an order
with an instruction that the member or member organization not trade
along or alter the terms for trading along with the order. The Exchange
would require members and member organizations to periodically disclose
this to customers as well.
    Once a customer provides such ``blanket'' consent, a member or
member organization may trade on a proprietary basis along with a
customer order that is executable at the same price as a proprietary
order that meets the exceptions set forth in Rule 92(b). A member or
member organization may seek to include a Rule 92(b) proprietary order
with a proposed Rule 92(c) riskless principal order. In such case, even
though a single order is transmitted to the Exchange, the order would
include both riskless and risk elements, and therefore would no longer
be a pure riskless principal transaction. For purposes of parity,
Exchange systems will recognize the riskless principal order as an
agency order, regardless of whether the order includes any Rule 92(b)
proprietary orders.

Exemption for Reg. NMS-Compliant Intermarket Sweep Orders

    The Exchange proposes amending Rule 92 to add an exemption so that,
when facilitating a customer order that would otherwise require the
firm to either violate Rule 92 or trade through protected quotations,
member organizations can comply with their Reg. NMS obligation without
also violating Rule 92. Under the current rule, if a member
organization is required to route intermarket sweep orders as principal
to execute against the full displayed size of any protected quotation
in a security (``ISO''), for example, when facilitating a customer
order at a price inferior to the national best bid or offer or other
protected quotations and in compliance with Rules 600(b)(30)(ii) and
611(b)(6) of Reg. NMS,\11\ the ISO could violate Rule 92 by trading
ahead of or along with open customer orders.
---------------------------------------------------------------------------

    \11\ 17 CFR 242.600(b)(30)(ii) and 17 CFR 242.611(b)(6).
---------------------------------------------------------------------------

    The proposed exemption provides that, when routing ISOs, the member
organization must yield its principal executions to any open customer
orders that are required to be protected by Rule 92 and capable of
accepting the fill. As defined in Rule 92(a), customer orders that are
required to be protected are those open customer orders that are known
to the member organization before entry of the ISO. The proposed
exemption would require that if a firm executes an ISO to facilitate a
customer order at a price inferior to one or more protected quotations,
that customer must consent to not receiving the better price obtained
by the ISO(s) or the firm must yield its principal execution to that
customer. In addition, the Exchange further proposes adopting the
definitions of Reg. NMS in connection with the terms ``protected
quotation'' and ``intermarket sweep order.'' \12\
---------------------------------------------------------------------------

    \12\ See 17 CFR 242.600(b)(7) and (30).
---------------------------------------------------------------------------

Amendment No. 3

    On July 5, 2007, the Exchange filed Amendment No. 3 to the proposed
rule change. In Amendment No. 3, the Exchange amended proposed Rule
92(c)(4) to clarify that the inclusion of a Rule 92(b) proprietary
order in the riskless principal transaction does not alter the
allocation rights of customers that consented to trade along with a
Rule 92(b) proprietary order. Therefore, when allocating a riskless
principal transaction, the member firm would have to yield to all
customers until any non-consenting customer orders have been filled,
and only then could the member firm trade along with any remaining
customer orders that have provided consent pursuant to Rule 92(b). The
Exchange also amended proposed Rule 92(d)(5) to clarify that a member
firm must yield the executions of Reg. NMS-compliant ISOs to open
customer orders except the customer order that the ISO was sent to
facilitate, if that customer has consented to not receiving the better
prices obtained by the ISO.
    In addition, because it recognized that the proposed rule might
require member organizations to make certain changes to their trading
and order management systems, in Amendment No. 3, the Exchange proposed
to delay the operative date of proposed NYSE Rule 92(c)(3), which
requires member firms to provide batched end-of-day allocation
reporting for riskless principal transactions, and the requirement that
member firms use the riskless principal account type indicator, until
January 16, 2008. Before that date, the Exchange stated that it would
work with the member organizations to develop and implement the
necessary changes to firms' systems and FESC to accommodate the
enhanced reporting requirements contained in the proposed rule.
However, the Exchange would require, as of the date that each firm
implements riskless principal routing, that the member firm have in
place systems and controls that allow them to easily match and tie
riskless principal execution on the Exchange to the underlying orders.
Finally, the Exchange recognized that the process of obtaining and
documenting affirmative customer consent under the proposed amendments
to Rule 92(b) will not be instantaneous, and therefore proposed that
the member firms would have until September 30, 2007 to obtain
documentation of affirmative consent.

III. Summary of Comments and NYSE Response

    The Commission received two comments on the proposal. The
commenters generally supported the proposal but expressed concern over
several requirements it would impose on members and member
organizations. Instead of requiring member firms to obtain affirmative
blanket consent to trade along with a customer's orders, the commenters
believed that negative consent with affirmative disclosure for both
institutional and individual customers would better align the
Exchange's regulatory requirements with today's market conditions while
also more effectively mitigating the administrative and recordkeeping
burdens associated with providing customers with adequate
disclosures.\13\ One commenter noted that the cost to firms to gather
affirmative blanket consent likely would negate the benefit of not
having to obtain order-by-order consent, as the rule requires
today.\14\
---------------------------------------------------------------------------

    \13\ SIFMA Letter, supra note 4, at 2; see also CGMI Letter,
supra note 4, at 3.
    \14\ SIFMA Letter at 3.
---------------------------------------------------------------------------

    The Exchange did not agree with the commenters that negative
consent is appropriate for trading along with customer orders.\15\ The
Exchange noted that it must strike a balance between investor
protection and the imposition of unnecessary burdens on member
organizations by its rules. The Exchange believed that the proposal
strikes the correct balance by requiring member firms to affirmatively
consent to being

traded along with by member firms and relieving member firms of the
administrative burdens of order-by-order consent.\16\ In addition, the
Exchange recognized that obtaining affirmative consent is not an
instantaneous process, and therefore proposed to give member firms
until September 30, 2007 to obtain documentation of affirmative
consent.\17\
---------------------------------------------------------------------------

    \15\ NYSE Response, supra note 5, at 3.
    \16\ Id.
    \17\ Id.; see also Amendment No. 3.
---------------------------------------------------------------------------

    The commenters expressed concern that the reporting requirements
applicable to a riskless principal transaction under Rule 92 are
inconsistent with NASD's riskless principal transaction reporting
requirements.\18\ Specifically, NYSE's rules require that a member firm
mark the initial leg of a riskless principal transaction as
``riskless'' when the order is sent to the Exchange (``traditional
approach'') as opposed to submitting an order to the Exchange marked as
``principal'' and a separate non-tape, non-clearing report on the
second leg(s) of the facilitation transaction to the customer
(``alternative approach''). The commenters noted that NASD rules
provide member firms the option of taking the traditional approach or
the alternative approach. The commenters believed that a large number
of member firms have programmed their systems to report transactions
under the alternative approach and requiring a member firm to report
transactions under the traditional approach would result in significant
costs to such member firms. The commenters believed that NYSE should
make its rules consistent with NASD's rules and allow member firms to
use either the traditional approach or the alternative approach when
reporting riskless principal transactions.\19\
---------------------------------------------------------------------------

    \18\ SIFMA Letter at 3 and CGMI Letter at 2.
    \19\ Id.
---------------------------------------------------------------------------

    The Exchange noted that, while the NASD has the ability to allow
firms to report riskless principal transactions using the traditional
approach or the alternative approach, its regulatory reporting systems
are designed to use the traditional approach.\20\ The Exchange noted
that it would continue to review its trade reporting requirements for
riskless principal transactions, but that, in the interim, if firms
want to trade as riskless principal on the Exchange, they would be
required to follow the traditional approach.\21\
---------------------------------------------------------------------------

    \20\ The Exchange stated that it did not believe there to be any
feasible alternative because it does not have a trade reporting
facility capable of receiving riskless principal orders and because
its surveillance system does not have access to NASD Order Audit
Trail (``OATS'') data. NYSE Response at 4.
    \21\ Id.
---------------------------------------------------------------------------

    The commenters also expressed concern that member firms would now
be required to submit order execution reports to FESC linking the
execution of the riskless principal order on the Exchange to the
specific underlying orders.\22\ The commenters requested clarification
on when such reports must be submitted to FESC, suggesting that it
should be end-of-day drop copy reporting, and requested that the
Exchange consider possible alternatives to reporting to FESC.\23\ In
addition, one commenter noted its belief that the information submitted
to FESC could be available to the Exchange through alternative
means.\24\
---------------------------------------------------------------------------

    \22\ SIFMA Letter at 3-4 and CGMI Letter at 2-3.
    \23\ Id.
    \24\ The commenter suggested that the Exchange could obtain such
information by making a request to NASD for OTS and OATS reporting.
CGMI Letter at 3.
---------------------------------------------------------------------------

    The Exchange clarified that reporting to FESC would be by end-of-
day.\25\ In addition, the Exchange proposed to delay the implementation
of FESC reporting requirements for riskless principal transactions and
the use of the riskless principal account type indicator until January
16, 2008 so that member organizations would have time to develop and
implement the necessary systems changes to comply with such
requirement.\26\ However, the Exchange stated that if a member
organization intended to execute riskless principal transactions on the
Exchange before January 16, 2008, the member organization would be
required to have in place systems and controls that would allow it to
easily match and tie riskless principal executions on the Exchange to
the underlying orders.\27\
---------------------------------------------------------------------------

    \25\ NYSE Response at 4.
    \26\ Id.
    \27\ Id. at 5.
---------------------------------------------------------------------------

    The commenters also noted that the proposal suggests that when
allocating riskless principal transactions that include Rule 92(b)
proprietary orders, orders from customers that have consented to trade
along with Rule 92(b) proprietary orders must yield to the non-
consenting customer orders.\28\ The commenters believed that the
inclusion of a Rule 92(b) proprietary order in the riskless principal
transaction should not alter the allocation rights of customers that
consented to trade along with a Rule 92(b) proprietary order.\29\ The
commenters believed that the orders of customers who have consented to
trading along should not be required to yield to the non-consenting
customer orders.\30\
---------------------------------------------------------------------------

    \28\ CGMI Letter at 4 and CGMI Letter at 4.
    \29\ Id.
    \30\ Id.
---------------------------------------------------------------------------

    The Exchange agreed with the commenters that the inclusion of a
Rule 92(b) proprietary order in the riskless principal transaction
should not alter the allocation rights of customers that consented to
trade along with a Rule 92(b) proprietary order.\31\ The Exchange
amended the proposal to ensure that no customer would be required to
yield to another customer, subject to regular parity of order
requirements.\32\
---------------------------------------------------------------------------

    \31\ NYSE Response at 5.
    \32\ See Amendment No. 3.
---------------------------------------------------------------------------

    In addition, the commenters requested that the Exchange clarify how
firms should allocate fills in accordance with the proposed exemption
from Rule 92 for certain Reg. NMS-compliant ISOs.\33\ The Exchange
clarified that a member firm must yield the executions of Reg. NMS-
compliant ISOs to open customer orders except the customer order that
the ISO was sent to facilitate, if that customer has consented to not
receiving the better prices obtained by the ISO.\34\
---------------------------------------------------------------------------

    \33\ SIFMA Letter at 4 and CGMI Letter at 4.
    \34\ NYSE Response at 5-6.
---------------------------------------------------------------------------

    Finally, one commenter believed that the Exchange should amend Rule
92 so that member organizations would be permitted to trade alongside
of a customer order regardless of whether the specific purpose of the
proprietary order is the direct liquidation or hedge of a customer
facilitation position.\35\ In its response letter, the Exchange stated
that it does not believe that the instant filing is the proper vehicle
for addressing the issue of expanding Rule 92(b) trading limitations,
but noted that it would continue to review Rule 92 to determine whether
further amendments are warranted.\36\
---------------------------------------------------------------------------

    \35\ CGMI Letter at 2.
    \36\ NYSE Response at 6.
---------------------------------------------------------------------------

IV. Discussion

    The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\37\ In
particular, the Commission believes that it is consistent with Section
6(b)(5) of the Act,\38\ which requires, among other things, that the
rules of a national securities exchange be designed to promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and

open market and a national market system and, in general, to protect
investors and the public interest.
---------------------------------------------------------------------------

    \37\ The Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
    \38\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange proposes to add a new subsection to Rule 92 that would
permit riskless transactions for the purpose of facilitating the
execution, on a riskless principal basis, of one or more customer
orders and proposes to adopt the underlying order requirements of the
NASD's Manning Rule \39\ for riskless principal transactions at the
Exchange. Under the proposal, member firms would need to disclose to
customers the method by which the firm would allocate the shares bought
or sold in the riskless principal transaction, and would be required to
allocate shares in accordance with that method. In addition, when
executing riskless principal transactions, firms would be required to
submit order execution reports to FESC linking the execution of the
riskless principal order on the Exchange to the specific underlying
orders, beginning January 16, 2008. The Commission believes this aspect
of the proposed rule change is reasonable because it moves the NYSE's
rules towards harmonization with the Manning Rule, which should
eliminate duplicative and potentially conflicting regulatory
obligations on member firms, while at the same time assuring that the
important investor protection provisions embodied in the Manning Rule
apply to Exchange transactions. The Commission believes that the
Exchange's proposed January 16, 2008 implementation date for FESC
reporting requirements for riskless principal transactions and the use
of the riskless principal account type indicator is reasonable and
should provide member organizations the necessary time to revise their
systems as necessary.
---------------------------------------------------------------------------

    \39\ See NASD Rule 2111 and IM-2110-2.
---------------------------------------------------------------------------

    The Exchange also proposes to modify the consent requirement of
NYSE Rule 92(b) to eliminate the requirement that members obtain order-
by-order consent from customers to permit the member to trade along
with such customer, and instead provide that customers may give
``blanket'' affirmative written consent for a member firm to trade
along, provided that certain conditions are met. In Amendment No. 3,
the Exchange stated that member firms would have until September 30,
2007 to obtain documentation of affirmative consent. The Commission
believes this portion of the proposal is also reasonable because it
should relieve member organizations of unnecessary administrative
burdens while at the same time still ensuring that Exchange members
obtain meaningful customer consent to members' trading along with their
customers. The Commission also believes that the proposal to provide
firms until September 30, 2007 to obtain documentation of affirmative
consent is reasonable in that it should give firms flexibility to
immediately make use of the new consent requirement while providing
them time for implementation of the revised requirement.
    The Exchange further proposes expanding the class of investors that
may consent to a Rule 92(b) proprietary order to include all
institutional investors, regardless of the size of the order, and
individual investors with orders of 10,000 shares or more, unless such
orders are less than $100,000 in value. The Commission also believes
this aspect of the proposal is reasonable because it will conform the
Exchange's rule to the NASD's Manning Rule,\40\ thereby eliminating
potentially duplicative and conflicting obligations on member firms
while assuring that such members are held to a high level of customer
protection.
---------------------------------------------------------------------------

    \40\ See NASD Rule 2111 and IM-2110-2.
---------------------------------------------------------------------------

    Finally, the Exchange proposes adding an additional exemption to
Rule 92. The proposed exemption provides that when routing ISOs, the
member must yield its principal executions to any open customer orders
that are required to be protected by Rule 92 and capable of accepting
the fill except the customer order that the ISO was sent to facilitate,
if that customer has consented to not receiving the better prices
obtained by the ISO. The Commission believes this change is reasonable
because it will facilitate member compliance with their respective
intermarket sweep order routing obligations under Rule 611 of
Regulation.\41\
---------------------------------------------------------------------------

    \41\ 17 CFR 242.611(b)(6).
---------------------------------------------------------------------------

    The Commission finds good cause to approve Amendment No. 3 to the
proposed rule change prior to the thirtieth day after such Amendment is
published for comment in the Federal Register pursuant to Section
19(b)(2) of the Act.\42\ The Commission believes that Amendment No. 3
serves to clarify the proposal, raises no new issues of regulatory
concern, and that publication of its provisions would needlessly delay
the implementation of the proposal.
---------------------------------------------------------------------------

    \42\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

V. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether Amendment No. 3
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_ADDRESS>Please include

File Number SR-NYSE-2007-21 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-2007-21. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, all

written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of NYSE. 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-2007-21 and should be
submitted on or before August 2, 2007.

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\43\ that the proposed rule change (SR-NYSE-2007-21), as modified
by Amendment No. 1, be, and hereby is, approved, and that Amendment No.
3 to the proposed rule

change be, and hereby is, approved on an accelerated basis.
---------------------------------------------------------------------------

    \43\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\44\
---------------------------------------------------------------------------

    \44\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-13497 Filed 7-11-07; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 76, Number 60 (Tuesday, March 29, 2011)]
[Notices]
[Pages 17422-17423]
[FR Doc No: 2011-7259]

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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2011-N-0002]

Orthopaedic and Rehabilitation Devices Panel of the Medical
Devices Advisory Committee; Notice of Meeting

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

    This notice announces a forthcoming meeting of a public advisory
committee of the Food and Drug Administration (FDA). The meeting will
be open to the public.
    Name of Committee: Orthopaedic and Rehabilitation Devices Panel of
the Medical Devices Advisory Committee.
    General Function of the Committee: To provide advice and
recommendations to the Agency on FDA's regulatory issues.
    Date and Time: The meeting will be held on May 12, 2011, from 8
a.m. to 6 p.m.
    Location: Hilton, Washington DC North/Gaithersburg, Salons A, B, C,
and D, 620 Perry Pkwy., Gaithersburg, MD 20877.
    Contact Person: Margaret McCabe-Janicki, Food and Drug
Administration, Center for Devices and Radiological Health, 10903 New
Hampshire Ave., Bldg. 66, rm. 1535, Silver Spring, MD 20993-0002, 301-
796-7029, or FDA Advisory Committee Information Line, 1-800-741-8138
(301-443-0572 in the Washington, DC area), and follow the prompts to
the desired center or product area. Please call the Information Line
for up-to-date information on this meeting. A notice in the Federal
Register about last minute modifications that impact a previously
announced advisory committee meeting cannot always be published quickly
enough to provide timely notice. Therefore, you should always check the
Agency's Web site and call the appropriate advisory committee hot line/
phone line to learn about possible modifications before coming to the
meeting.
    Agenda: On May 12, 2011, the committee will discuss, make
recommendations, and vote on information related to the premarket
approval application (PMA) for the Augment Bone Graft, sponsored by
Biomimetic Therapeutics, Inc. The intended use of the device is as an
alternative bone grafting substitute to autologous bone graft in
applications to facilitate fusion in the ankle and foot without
necessitating an additional invasive procedure to harvest the graft.
    FDA intends to make background material available to the public no
later than 2 business days before the meeting. If FDA is unable to post
the background material on its Web site prior to the meeting, the
background material will be made publicly available at the location of
the advisory committee meeting, and the background material will be
posted on FDA's Web site after the meeting. Background material is
available at http://www.fda.gov/AdvisoryCommittees/Calendar/default.htm. Scroll down to the appropriate advisory committee link.
    Procedure: Interested persons may present data, information, or
views, orally or in writing, on issues pending before the committee.
Written submissions may be made to the contact person on or before May
5, 2011. Oral presentations from the public will be scheduled between
approximately 1 p.m. and 2 p.m. Those individuals interested in making
formal oral presentations should notify the contact person and submit a
brief statement of the general nature of the evidence or arguments they
wish to present, the names and addresses of proposed participants, and
an indication of the approximate time requested to make their
presentation on or before April 25, 2011. Time allotted for each
presentation may be limited. If the number of registrants requesting to
speak is greater than can be reasonably accommodated during the
scheduled open public hearing session, FDA may conduct a lottery to
determine the speakers for the scheduled open public hearing session.
The contact person will notify interested persons regarding their
request to speak by April 28, 2011.
    Persons attending FDA's advisory committee meetings are advised
that the

Agency is not responsible for providing access to electrical outlets.
    FDA welcomes the attendance of the public at its advisory committee
meetings and will make every effort to accommodate persons with
physical disabilities or special needs. If you require special
accommodations due to a disability, please contact Ms. AnnMarie
Williams, Conference Management Staff,<PHONE_NUMBER>, at least 7 days in
advance of the meeting.
    FDA is committed to the orderly conduct of its advisory committee
meetings. Please visit our Web site at http://www.fda.gov/AdvisoryCommittees/AboutAdvisoryCommittees/ucm111462.htm for procedures
on public conduct during advisory committee meetings.
    Notice of this meeting is given under the Federal Advisory
Committee Act (5 U.S.C. app. 2).

    Dated: March 23, 2011.
Leslie Kux,
Acting Assistant Commissioner for Policy.
[FR Doc. 2011-7259 Filed 3-28-11; 8:45 am]
BILLING CODE 4160-01-P


[Federal Register: July 23, 2007 (Volume 72, Number 140)]
[Notices]
[Page 40184-40187]
[DOCID:fr23jy07-84]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56071; File No. SR-NYSEArca-2007-59]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change and Amendment No. 1 Thereto Relating to
Amendments to Rule 12 To Provide Guidance Regarding New and Pending
Arbitration Claims in Light of the Consolidation of NYSE Regulation
Into NASD DR

July 13, 2007.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on June 26, 2007, NYSE Arca, Inc. (``NYSE Arca'' or
``Exchange'') filed with the Securities and Exchange Commission the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by NYSE Arca. On July 13, 2007, the NYSEArca
filed Amendment No. 1 to the proposed rule change.\4\ The Commission is
publishing this notice to solicit comments on the proposed rule change,
as amended, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ 4 In Amendment No. 1, which supplemented the original
filing, the Exchange clarified the applicability of Rule 12 as it
was in effect on or prior to January 31, 2007.
---------------------------------------------------------------------------

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

    NYSE Arca proposes to amend NYSE Arca Rule 12.
    NYSE Regulation, Inc. (``NYSE Regulation'') administers an
arbitration program for NYSE Arca. As part of the consolidation of the
member firm regulation function of NYSE Regulation with the National
Association of Securities Dealers, Inc. (``NASD''), NYSE Regulation
will cease to provide an arbitration program, and its existing
arbitration department (``NYSE Arbitration'') will be consolidated with
that of NASD Dispute Resolution, Inc. (``NASD DR'').
    The proposed amendments provide that: (i) All arbitrations filed
with NYSE Arca after January 31, 2007 and prior to the later of the
effective date of the consolidation or approval of this proposed rule
change (the ``Effective Date''), shall continue to be governed by the
Code of Arbitration contained in the 600 series of the New York Stock
Exchange LLC Rules (``NYSE Arbitration Rules''); (ii) arbitrations
filed on or prior to January 31, 2007 shall continue to be governed by
NYSE Arca Rule 12 as it was in effect on or prior to January 31, 2007;
and (iii) from and after the Effective Date, disputes between NYSE Arca
Option Trading Permit (``OTP'') holders and NYSE Arca OTP firms,
associated persons, and/or their customers will be arbitrated under the
NASD DR Codes of Arbitration Procedure. The text of the proposed rule
change is set forth below. Proposed new language is in italics;
proposed deletions are in brackets.
* * * * *

Rule 12 Arbitration

    (a) General. All arbitrations filed with NYSE Arca after January
31, 2007 and

prior to [insert later of effective date of the consolidation or
approval of this proposed rule change] shall be governed by the Code of
Arbitration contained in the 600 series of the New York Stock Exchange,
L.L.C. Rules (``NYSE Arbitration Rules''), as the same may be in effect
from time to time, except that arbitrations filed on or prior to
January 31, 2007 shall be governed by NYSE Arca Rule 12 as it was in
effect on or prior to January 31, 2007 [as may be specified in this
Rule 12]. The term ``member'' as used in this Rule 12 and in the NYSE
Arbitration Rules shall mean and refer to OTP Holders and OTP Firms.
From and after [insert later of effective date of the consolidation or
approval of this proposed rule change] (i) any dispute, claim or
controversy between or among OTP Holders and/or OTP Firms and/or
associated persons shall be arbitrated pursuant to the NASD Dispute
Resolution, Inc. (``NASD DR'') Codes of Arbitration Procedure; and,
(ii) any dispute, claim or controversy between a customer or non-member
and an OTP Holder and/or OTP Firm and/or associated person arising in
connection with the business of such OTP Holder and/or OTP Firm and/or
in connection with the activities of an associated person, shall be
arbitrated pursuant to NASD DR Codes of Arbitration Procedure as
provided by any duly executed and enforceable written agreement, or
upon demand of the customer or non-member. Such obligation to arbitrate
shall extend only to those matters that are permitted to be arbitrated
under NASD DR Codes of Arbitration Procedure.
    (b) Referrals. NYSE Arca may receive, investigate and take
disciplinary action with respect to any referral it receives from a
NASD DR arbitrator of any matter which comes to the attention of such
arbitrator during and in connection with the arbitrator's participation
in a proceeding, either from the record of the proceeding or from
material or communications related to the proceeding, that the
arbitrator has reason to believe may constitute a violation of NYSE
Arca's Rules or the federal securities laws.
    (c) Failure to Arbitrate or to Pay an Arbitration Award. Any OTP
Holder and/or OTP Firm and/or associated person who fails to submit to
arbitration a matter required to be arbitrated pursuant to this Rule,
or that fails to honor an arbitration award made pursuant to the NASD
DR Codes of Arbitration Procedure, or made under the auspices of any
other self-regulatory organization, shall be subject to disciplinary
proceedings in accordance with NYSE Arca Rule 10.
    (d) Other Actions. The submission of any matter to arbitration as
provided for under this Rule shall in no way limit or preclude any
right, action or determination by NYSE Arca that it would otherwise be
authorized to adopt, administer or enforce. [(b) Jurisdiction. Any
dispute, claim or controversy arising out of or in connection with the
business of any member of NYSE Arca, or arising out of the employment
or termination of employment of associated person(s) with any member
may be arbitrated under this Rule 12 except that: (1) A dispute, claim,
or controversy alleging employment discrimination (including a sexual
harassment claim) in violation of a statute may only be arbitrated if
the parties have agreed to arbitrate it after the dispute arose; and
(2) any type of dispute, claim, or controversy that is not permitted to
be arbitrated under the NYSE Arbitration Rules, such as class action
claims, shall not be eligible for arbitration under this Rule 12.
    (c) Predispute Arbitration Agreements. The requirements of NYSE
Arbitration Rules shall apply to predispute arbitration agreements
between NYSE Arca members and/or associated persons and their
customers.
    (d) Referrals. If any matter comes to the attention of an
arbitrator during and in connection with the arbitrator's participation
in a proceeding, either from the record of the proceeding or from
material or communications related to the proceeding, that the
arbitrator has reason to believe may constitute a violation of NYSE
Arca's Rules or the federal securities laws, the arbitrator may refer
the matter to NYSE Regulation, Inc. for disciplinary investigation.
    (e) Payment of Awards. Any member or associated person who fails to
honor an award of arbitrators appointed in accordance with this Rule 12
shall be subject to disciplinary proceedings in accordance with Rule 10
(Disciplinary Proceedings, Other Hearings, and Appeals).
    (f) Other Actions. The submission of any matter to arbitration
under this Chapter shall in no way limit or preclude any right, action
or determination by NYSE Arca that it would otherwise be authorized to
adopt, administer or enforce.]
* * * * *

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 Arca 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 Arca 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 purpose of the proposed rule change is to provide guidance
regarding both new and pending arbitration claims in light of the
consolidation of the member firm regulation function of NYSE Regulation
into NASD DR.\5\ NYSE Arbitration currently administers an arbitration
program for NYSE Arca, governed by what is referred to as ``Rule 12.''
\6\
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    \5\ The NYSE has proposed a separate filing related to the
consolidation of NYSE Arbitration into NASD DR. See Securities
Exchange Act Release No. 55818 (May 25, 2007), 72 FR 30898 (June 4,
2007) (SR-NYSE 2007-48). On June 21, 2007, the NYSE filed Amendment
No. 1 to this proposed rule change. See Securities Exchange Act
Release No. 56015 (July 5, 2007), 72 FR 37811 (July 11, 2007).
    \6\ Although Rule 12 has subsequently been amended, for purposes
of administering NYSE Arca arbitrations filed on or prior to January
31, 2007, NYSE Arbitration follows Rule 12 as it was in effect on
that date.
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    As part of the consolidation of NYSE Regulation with NASD,\7\ NYSE
Regulation will cease to administer an arbitration program, and its
existing arbitration department will be consolidated with NASD DR. As a
result, on and after the date of the consolidation, all arbitration
claims filed prior to the Effective Date, and previously subject to
Rule 12 or NYSE Regulation rules, will be administered by NASD DR
pursuant to a Regulatory Services Agreement with the New York Stock
Exchange LLC (``NYSE'').
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    \7\ Additional information regarding the consolidation may be
found in: SR-NASD-2007-23 (March 19, 2007) concerning proposed
amendments to the By-Laws of NASD to implement governance and
related changes to accommodate the consolidation of the member firm
regulatory functions of NASD and NYSE Regulation, Inc.; and SR-NYSE-
2007-22 (February 27, 2007) concerning proposed amendments to
several NYSE rules which, among other matters, harmonize the rules
with corresponding NASD regulatory requirements.
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    The rules governing the administration of any particular
arbitration will depend on the date the case was filed. This will
ensure that any person that filed an arbitration under a particular set
of arbitration rules will continue to have the case administered
pursuant to those rules through to the case's conclusion. There are two

categories of cases. First, NYSE Arca cases filed on or prior to
January 31, 2007 are and would continue to be governed by Rule 12 as it
was in effect on that date. Second, NYSE Arca cases filed after January
31, 2007, but prior to the Effective Date will continue to be governed
by existing NYSE Regulation arbitration rules.\8\
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    \8\ See Securities Exchange Act Release No. 55142 (January 19,
2007), 72 FR 3898 (January 26, 2007) (SR-NYSEArca-2006-54) and
Securities Exchange Act No. 55141 (January 19, 2007), 72 FR 3897
(January 26, 2007)(SR-NYSEArca-2006-55).
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    Rule 12, as amended, would provide detailed guidance concerning
claims involving OTP Holders and/or OTP Firms and/or associated persons
that are asserted on and after the Effective Date.\9\ First, any
dispute, claim or controversy between or among OTP Holders and/or OTP
Firms and/or associated persons shall be arbitrated pursuant to the
NASD DR Codes of Arbitration Procedure. Second, any dispute, claim or
controversy between a customer or a non-member and an OTP Holder and/or
OTP Firm, and/or associated person arising in connection with the
business of such OTP Holder and/or OTP Firm and/or in connection with
the activities of an associated person, shall be arbitrated pursuant to
NASD DR Codes of Arbitration Procedure as provided by any duly executed
and enforceable written agreement, or upon the demand of the customer
or non-member. This obligation to arbitrate shall extend only to those
matters that are permitted to be arbitrated under NASD DR Codes of
Arbitration Procedure.
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    \9\ It is proposed that the provisions in the current Rule
12(b)-(f) be deleted because these sections would be replaced by the
proposed Rule 12 provisions described herein.
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    In almost all cases the change from NYSE rules or NYSE Arca rules
to NASD DR arbitration rules should not result in material, substantive
differences to persons participating in the arbitration process.
However, one difference is the treatment of employment discrimination
claims. NASD DR rules provide that any claim alleging employment
discrimination, including any sexual harassment claims, in violation of
a statute, will be eligible for arbitration pursuant to either a pre-
dispute or a post-dispute agreement to arbitrate. In contrast, NYSE
Rule 600(f), NYSE Rule 347(b) and current NYSE Arca Rule 12(b) permit
claims to be arbitrated only when the parties have agreed to arbitrate
the claim after it has arisen.
    Proposed Rule 12(b) would explicitly retain NYSE Arca's enforcement
authority related to arbitration. In appropriate cases, arbitrators
would refer to NYSE Arca potential violations of NYSE Arca's rules or
the federal securities laws that come to their attention during and in
connection with a proceeding. Rule 12(b) would specify that NYSE Arca
would retain the ability to take action based on such referrals that
may come from arbitrators in cases being arbitrated at NASD DR.
    Proposed Rule 12(c) also would provide that any OTP Holder and/or
OTP Firm, and/or associated person of any OTP Holder and/or OTP Firm,
that fails to honor an award of arbitrators rendered under the NASD DR
Codes of Arbitration Procedure, or under the auspices of any other
self-regulatory organization, shall be subject to disciplinary
proceedings in accordance with NYSE Arca Rule 10. Proposed Rule 12(c)
also would specify that failure to submit a matter to arbitration as
required by Rule 12 also would subject the OTP Holder and/or OTP Firm
and/or associated person to Exchange disciplinary action.
    Proposed Rule 12(d) would also specify that the submission of any
matter to arbitration as provided for under the Rule shall in no way
limit or preclude any right, action or determination by NYSE Arca that
it would otherwise be authorized to adopt, administer or enforce.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the requirements of Section 6(b)(5) \10\ of the Act, which
requires, among other things, that the rules of an Exchange be designed
to promote just and equitable principles of trade and to protect
investors and the public interest. The proposed rule change will
streamline the arbitration process and, after a transitional period,
provide for a unified and more efficient arbitration forum with one set
of arbitration rules and administrative procedures. This will allow
resources to be devoted to maintaining and improving the NASD DR
program, rather than splitting resources among duplicative programs. As
a result of these improvements, the proposed rule change will better
protect investors and the public interest.
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    \10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

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

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

    The Exchange has neither solicited nor received written comments on
the proposed rule change.

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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) As the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, is consistent with the Exchange 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 e-mail to<EMAIL_ADDRESS>Please include File

Number SR-NYSEArca-2007-59 on the subject line.

Paper Comments

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

    All submissions should refer to File Number SR-NYSEArca-2007-59.
This file number should be included on the subject line if e-mail is
used. To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments,

all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the

proposed rule change between the Commission and any person, other than
those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of NYSE Arca. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2007-59 and should
be submitted on or before August 13, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-14165 Filed 7-20-07; 8:45 am]

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