[Federal Register: July 18, 2007 (Volume 72, Number 137)]
[Notices]
[Page 39477-39479]
[DOCID:fr18jy07-124]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56057; File No. SR-NYSEArca-2006-82]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change Relating to Amendments to NYSE Arca Equities
Rules 2.16 and 4.5 Relating to Certain ETP Holder Administrative
Procedures

July 12, 2007.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby
given that on November 7, 2006, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange''), through its wholly owned subsidiary NYSE Arca Equities,
Inc. (``NYSE Arca Equities'' or the ``Corporation''), filed with the
Securities and Exchange Commission (``Commission'' or ``SEC'') the
proposed rule change as described in Items I, II and III below, which
Items have been substantially prepared by the Exchange. The Commission
is publishing this notice to solicit comment 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, through its wholly owned subsidiary NYSE Arca
Equities, proposes to amend NYSE Arca Equities Rules 2.16 and 4.5(b)
and (c). The text of the proposed rule change is set forth below.
Italicized text indicate additions; brackets indicate deletions.

Rule 2.16 Amendments to ETP Holder Documents

    (a) All formation documents for ETP Holders for which NYSE Arca,
Inc. is the Designated Examining Authority, such as articles of
incorporation, by-laws, partnership agreements, limited liability
company agreements, and all amendments thereto, now in effect or
adopted in the future, shall be filed with the Corporation and shall be
subject to approval by the Corporation.

Rule 4.5(b) Part II Quarterly Reports

    [Two manually signed copies of] Part II of SEC Form X-17A-5 shall
be filed electronically with, and in a manner prescribed by, the
Corporation for each calendar quarter by any ETP Holder which carries
or clears accounts for customers. Such report shall be due by the
seventeenth business day following the end of the calendar quarter
being reported upon. Original copies of such reports with manual
signatures shall be maintained by the ETP Holder in accordance with
NYSE Arca Equities Rule 2.24.

Rule 4.5(c) Part IIA Quarterly Reports

    [Two manually signed copies of] Part IIA of SEC Form X-17A-5 shall
be filed electronically with, and in a manner prescribed by, the
Corporation for each calendar quarter by any ETP Holder which does not
carry or clear accounts for customers. Such report shall be due by the
seventeenth business day following the end of the calendar quarter
being reported upon. Original copies of such reports with manual
signatures shall be maintained by the

ETP Holder in accordance with NYSE Arca Equities Rule 2.24.

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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in sections (A), (B) and (C) below,
of the most significant aspects of such statements.

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

(1) Purpose
    The Exchange proposes to amend NYSE Arca Equities Rules 2.16 and
4.5(b) and (c) in order to simplify the administrative procedures that
Equity Trading Permit (``ETP'') Holders \3\ must follow. The Exchange
believes that such amendments will not compromise the Exchange's
ability to regulate its ETP Holders.
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    \3\ See NYSE Arca Equities Rule 1.1(n).
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    NYSE Arca Equities Rule 2.16 currently provides that all ETP
Holders must file their formation documents with the Corporation. The
Exchange proposes to amend NYSE Arca Equities Rule 2.16 in order to
provide that only those ETP Holders for which the Exchange is the
Designated Examining Authority must submit such formation documents to
the Corporation. The Exchange believes that it is duplicative and
unnecessary for an ETP Holder to submit documentation relating to its
organizational structure to more than one SRO for review. Further, to
the extent an ETP Holder is required to send organizational documents
only to one SRO for review, NYSE Arca believes that the most
appropriate SRO to perform that review is the ETP Holder's Designated
Examining Authority.
    NYSE Arca Equities Rule 4.5(b) currently requires ETP Holders that
carry or clear accounts for customers to file two manually signed
copies of Part II of SEC Form X-17A-5 with the Corporation on a
quarterly basis. The Exchange proposes to amend NYSE Arca Equities Rule
4.5(b) to provide that such reports shall be filed electronically with
the Corporation, rather than manually, and that the ETP Holder shall
maintain original copies of such reports with manual signatures in
accordance with NYSE Arca Equities Rule 2.24.\4\
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    \4\ NYSE Arca Equities Rule 2.24 provides that each ETP Holder
must make, keep current and preserve such books and records as the
Exchange may prescribe and as may be prescribed by the Securities
Exchange Act of 1934 (the ``Exchange Act'') and the rules and
regulations thereunder (including any interpretation relating
thereto) as though such ETP Holders were brokers or dealers
registered with the SEC pursuant to Section 15 of the Exchange Act.
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    NYSE Arca Equities Rule 4.5(c) currently requires ETP Holders that
do not carry or clear accounts for customers to file two manually
signed copies of Part IIA of SEC Form X-17A-5 with the Corporation on a
quarterly basis. The Exchange proposes to amend NYSE Arca Equities Rule
4.5(c) to provide that such reports shall be filed electronically with
the Corporation, rather than manually, and that the ETP Holder shall
maintain original copies of such reports with manual signatures in
accordance with NYSE Arca Equities Rule 2.24.\5\
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    \5\ Id.
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    The Exchange proposes amending NYSE Arca Equities Rule 4.5(b) and
(c) to codify procedural changes that have been implemented by the
Exchange and to be consistent with guidance that has been provided
previously to ETP Holders.
(2) Statutory Basis
    The Exchange believes the proposed rule change is consistent with
section 6(b) of the Exchange Act,\6\ in general, and furthers the
objectives of section 6(b)(5) \7\ in particular in that it is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, and to remove impediments to and perfect the mechanism of a
free and open market and a national market system.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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 Exchange Act.

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

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

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

    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 modifications, 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 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-NYSEArca-2006-82 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-2006-82. 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-2006-82 and should be submitted on or before
August 8, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E7-13882 Filed 7-17-07; 8:45 am]

BILLING CODE 8010-01-P